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Audit Committee Charter

Charter of the Audit Committee of the Board of Directors

 

I. Organization and Functioning

There shall be a committee of the Board of Directors to be known as the Audit Committee (the “Committee”).  The Committee shall be comprised of at least three Directors who shall be appointed by the Board of Directors after considering the recommendation of the Governance & Nominating Committee.  The Committee shall only include directors who satisfy the independence standards of The NASDAQ Global Select Market (“NASDAQ”) and are free of any relationship that, in the opinion of the Board, would interfere with their exercise of independent judgment as a Committee member. 

Committee members must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement.  The Audit Committee will have at least one member who meets the definition of "audit committee financial expert" as promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The role of the audit committee financial expert will be that of assisting the Audit Committee in overseeing the audit process, not auditing the Company. 

The Board of Directors shall designate one member of the Committee as its Chairperson.  The Committee shall meet at least four times each year and hold such other meetings from time to time as may be called by its Chairperson or any two members of the Committee.  A majority of the members of the Committee shall constitute a quorum of the Committee.  A majority of the members in attendance shall decide any question brought before any meeting of the Committee.  At least once during the course of the year, the Committee will meet with Company management and the independent auditors in separate executive sessions to discuss the results of the independent auditors’ annual examination of the Company’s financial statements.

No member of the Committee may receive directly or indirectly any consulting, advisory, or other compensatory fee from the Company other than dividends and payment for services as a Director or member of a Committee of the Board of Directors as provided for in Section 15, Director Compensation, of the Governance Guidelines of the Company, or be an affiliated person of the Company or any of its subsidiaries.  

The Committee shall keep minutes of its proceedings that shall be signed by the person whom the Chairperson designates to act as secretary of the meeting.  The minutes of a meeting shall be approved by the Committee at its next meeting, shall be available for review by the entire Board of Directors, and shall be filed as permanent records with the Secretary of the Company.  

The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain special legal, compensation or other consultants to advise the Committee.  The Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Committee or to meet with any member of, or consultants to, the Committee.  

The Chairperson shall at each meeting of the Board of Directors following a meeting of the Committee report to the full Board of Directors on the matters considered at the last meeting of the Committee.

II. Statement of Purposes

Recognizing that the Company’s outside auditors have ultimate accountability to the Board of Directors of the Company, the Committee shall assist Board of Directors oversight of: (a) the integrity of the Company’s financial statements, (b) the Company’s compliance with legal and regulatory requirements, (c) the independent auditor’s qualifications and independence; (d) the performance of the Company’s internal audit function and independent auditors and (e) the adequacy of financial statements pertaining to the Company's benefit plans, including reserves, statement of funding obligations and underlying assumptions.

III. Specific Duties and Responsibilities

The Committee shall have the following duties and responsibilities:

(a)    Retain and, where warranted in the Committee’s judgment, terminate independent auditors selected to audit the financial statements of the Company.

(b)   Approve of all permissible non-audit services to be performed by the independent auditors.

(c)    At least annually, obtain and review a report by the independent auditor describing:  

        1.  the audit firm’s internal quality-control procedures; 

        2. any material issues raised by the most recent internal quality-control review, or 
            peer review, of the audit 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 audit firm, and any steps taken to deal with 
            any such issues; and

        3. all relationships between the independent auditor and the Company (for the 
            purpose of assessing the auditor’s independence).

(d)   Meet with the independent auditors and financial management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof review such audit, including any comments or recommendations of the independent auditors.

(e)    Review with the Company’s management, the Company’s internal auditors and the Company’s independent auditors the adequacy and effectiveness of the accounting and financial controls, including the Company’s Business Ethics Questionnaire.

(f)     Review the annual internal audit plan of the Company.

(g)    On an ongoing basis, review a summary of findings from completed internal audits and a progress report on the internal audit plan, with a summary report of any deviations from the plan.

(h)    The Committee Chairperson shall discuss the annual audited financial statements and quarterly financial statements with management and the independent auditor.  Based on the issues identified, the Chairperson may elect to ask the Committee for its review. 

(i)      Review with the independent auditor any significant accounting alternatives and any audit problems or difficulties and management’s response thereto.

(j)     Drafts of earnings press releases, as well as financial information and earnings guidance provided to analysts, shall be distributed to members of the Committee in a timely fashion; the Chairperson will discuss the draft with management including any observations made by other Committee members. 

(k)   Submit the minutes of all meetings of the Committee to, or discuss the matters considered at each Committee meeting with, the Board of Directors.

(l)      Investigate any matter brought to the Committee’s attention within the scope of its duties, with the power to retain outside counsel for this purpose if, in its judgment, that is appropriate.

(m)    Establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters.

(n)     Approve of all related-party transactions.

(o)     Review and approve the report that SEC rules require be included in the Company’s annual proxy statement.

(p)     Pursuant to Section 10 of the Company’s Governance Guidelines, conduct an annual self-assessment of the Committee’s performance with respect to the requirements of this Charter and recommend any proposed changes to the Board of Directors.  In conjunction therewith, the Committee shall review and assess the adequacy of this Charter and recommend any proposed changes to the Board for approval.

(q)     Monitor and evaluate the effectiveness of the Company’s Code of Business and Ethical Conduct, adopt revisions to the Code where revisions are warranted based upon the annual evaluation and recommend any such revisions to the Board of Directors for approval. 

(r)     Review at least annually the actuarial assumptions adopted with respect to, and funding status of, the Company-sponsored Employee Retirement Income Security Act (“ERISA”) governed tax-qualified plans (the “Plans”) and their impact on the Company’s financial statements.

The Committee’s function is one of oversight and review.  While the Committee shall have the responsibilities and powers set forth in this Charter, it shall not be the duty of the Committee to assume the respective duties and responsibilities of the independent and internal auditors and management of the Company including but not limited to planning or conducting audits or determining that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles.  Further, it is not expected nor required that the Committee will conduct investigations or resolve disagreements, if any, between management of the Company and the independent auditor.

With respect to paragraph (r) above, the central responsibility of the Committee with respect to the Company’s Plans shall be an oversight responsibility.  The Committee shall not be deemed the fiduciary of any of the Plans for purposes of the ERISA nor shall it be responsible for managing the Plans or directing the investment of Plan assets.  These are the responsibilities of management and the named fiduciaries of the Plans.

Revised: 2-19-08