Audit Committee ("Audit Committee" or "Committee")

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  1. Purpose

    The Audit Committee's purpose is (a) to assist the Board of Directors with oversight of (i) the integrity of the Company's financial statements, (ii) the Company's system of internal control, (iii) the Company's compliance with legal and regulatory requirements, (iv) the independent auditor's qualifications and their independence, and (v) the performance of the Company's internal audit function and independent auditors, and (b) to prepare the Audit Committee report that is required by the rules of the SEC to be included in the Company's annual proxy statement, and (c) to discuss the guidelines and policies governing the process by which risk assessment and management is undertaken by the Company. In fulfilling its purpose, the Committee should foster free and open communications among the directors, the independent auditors, the internal auditors and the financial and senior management of the Company.

    The Company's independent auditors are ultimately accountable to the Board of Directors and the Audit Committee, and the Audit Committee has the ultimate authority and responsibility to select, retain, compensate and terminate the Company's independent auditors.

  2. Composition

    The Audit Committee shall consist of at least three directors, each of whom is independent, within the meaning of the independence requirements established by the New York Stock Exchange ("NYSE"), Section 10A(m)(3) of the Securities Exchange Act of 1934 and the applicable rules promulgated by the Securities and Exchange Commission ("SEC"). In addition, no member of the Committee may simultaneously serve on the audit committees of more than two other public companies unless the Board of Directors determines that such service would not impair the ability of such director to effectively serve on the Audit Committee and discloses such determination as required by the NYSE. All members of the Committee shall be financially literate as such qualification is interpreted by the Board of Directors in its business judgment, or must become financially literate within a reasonable time after their appointment to the Committee. Also, at least one member of the Committee shall have accounting or related financial management expertise as such qualification is interpreted by the Board of Directors in its business judgment. To the extent possible, at least one member of the Committee shall be an "audit committee financial expert" as such term is defined by the SEC and as determined in the business judgment of the Board of Directors.

    The Board of Directors shall appoint members of the Audit Committee and its Chairman annually, considering the recommendation of the Nominating and Corporate Governance Committee, and further considering the views of the Chairman of the Board and CEO, as appropriate. Each member of the Audit Committee shall serve until the earlier of such (i) director's resignation, (ii) director's removal from the Committee, or (iii) director no longer being a member of the Board of Directors of the Company. The Board of Directors shall have the power at any time to change the membership of the Audit Committee and to fill vacancies in the Committee with new member(s) that satisfy the requirements set forth in the preceding paragraph.

  3. Authority and Procedure

    The Audit Committee has the sole authority to (i) select, retain, replace and terminate special or independent counsel, accountants, consultants, or other outside experts and advisors to assist the Committee in performance of its duties and responsibilities, (ii) approve the fee and other retention terms of any such engagement, and (iii) incur ordinary administrative expenses necessary or appropriate to carry out its duties.

    The Company shall provide for appropriate funding, as determined by the Committee, for payment of any such engagement, fees, costs and expenses. The Committee shall have full access to any relevant records of the Company and may also request that any officer or employee of the Company and its employing affiliates assist the Committee in performing its duties.

    The provisions of the Company's Bylaws governing committees of the Board of Directors, their subcommittees and their operations are incorporated herein. Specific responsibilities of the Committee are set forth in the Responsibilities Checklist below.

  4. Compensation

    No member of the Audit Committee may receive any compensation from the Company other than (i) director's fees, including committee member and committee chair fees, if any (in the form of cash, Company stock, stock options or other in-kind consideration ordinarily available to directors of the Company), (ii) a pension or other form of deferred compensation from the Company for prior service that is not contingent in any way on future service, and (iii) any other regular benefits that other directors receive.

  5. Responsibilities

    The Committee will meet at least four times each year or more frequently as circumstances require. In connection with fostering open communication among groups providing accounting, auditing and financial reporting services for the Company, the Committee will meet periodically with the independent auditors, the internal auditor and financial and senior management in separate sessions to discuss any matter that the Committee or any of these groups believes should be discussed privately. The Committee will also be responsible for setting clear hiring policies for employees or former employees of the independent auditors and for establishing 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 employees of the Company of concerns regarding questionable accounting or auditing matters.

    Specific responsibilities of the Committee in performing its oversight role are set forth in the Responsibilities Checklist below. The checklist will be reviewed and updated as necessary to reflect changes in regulatory requirements, authoritative guidance and evolving practices. In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible in order to best react to a changing environment.

  6. Limitation of Role

    While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to prepare or determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. Management is responsible for the preparation, presentation and integrity of the Company's financial statements, the appropriateness of the accounting principles and reporting policies used by the Company, and implementing internal controls. The independent auditors are responsible for auditing the Company's financial statements, for reviewing the Company's unaudited interim financial statements, and for monitoring the effectiveness of the internal controls, subject, in each case, to the oversight of the Audit Committee as described in this Charter. The review of the financial statements by the Audit Committee is not the same character or quality as the audit performed by the independent auditors. The oversight exercised by the Audit Committee is not a guarantee that the financial statements will be free from mistake or fraud.

AUDIT COMMITTEE
RESPONSIBILITIES CHECKLIST

  WHEN TYPICALLY PERFORMED
Audit Committee Meetings
Annually Quarterly As Needed
1. Appoint, retain and oversee and, when appropriate terminate, the work of any independent registered public accounting firm engaged (including resolution of disagreements between management and the firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. Each firm will report directly to the Committee. X   X
2. Approve all engagement fees and terms, as well as all permitted non-audit engagements, with the independent registered public accounting firm (the "independent auditors") subject to item 1 above. X   X
3. Require the independent auditors (the "firm") to submit to the Committee at least annually a report describing (i) the firm's internal quality-control procedures; (ii) 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 (iii) all relationships between the independent auditors and the Company. X    
4. Review the independent auditors' "independence letter" and evaluate the qualifications, performance and independence of the independent auditors, including discussing with the independent auditors all of their relationships or services that may impact their objectivity and independence and determining whether the auditors' quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditors' independence, taking into consideration the opinions of management and the internal auditors; present the Committee's conclusions to the Board of Directors and recommend to the Board of Directors appropriate action to ensure the independence of the independent auditors. X    
5. Review and evaluate as needed the qualifications, performance and independence of the lead audit partner (or similar designation) of the independent auditor.     X
6. Delegate certain matters to a sub-committee of the Committee (which may consist of a single member of the Committee) to the extent such delegation does not conflict with applicable laws, rules or regulations affecting the Company.     X
7. Confer with the independent auditors and the internal auditor as to the scope of each of their proposed audits, including directing special attention to specific matters or areas deemed by the Committee or the independent auditors or internal auditors to be of special significance; and confirm both of the auditors' understanding that they have the authority and responsibility to inform the Committee of any unresolved issues they encounter.   X  
8. Review the appointment and replacement of the head of the internal audit; approve the internal audit department's independence, annual work plan, budget, staffing and charter; and review management's assessment of the performance, and concur with the annual compensation and salary adjustment, of the head of internal audit department, as recommended by the Company's executive management team. X    
9. Meet separately no less often than every quarter with management, the internal auditors and the independent auditors.   X X
10. Review the findings and recommendations of the independent auditors on completion of their annual audit. X    
11. Review with the independent auditors any difficulties the auditors encountered in the course of their audit work, including any restrictions on the scope of the independent auditors' activities or on access to requested information. X   X
12. Review with the independent auditors, outside the presence of management, the matters required to be discussed under generally accepted auditing standards relating to the conduct of the audit, any significant disagreements with management and unresolved issues, including, without limitation, any accounting adjustments that were noted or proposed by the independent auditors but were "passed" as immaterial or otherwise and any communications between the independent audit team and the audit firm's national office respecting auditing or accounting issues presented by the engagement. Resolution of any such matters is to be coordinated with management. X   X
13. Review any "management" or "internal control" letter issued, or proposed to be issued, by the audit firm to the Company. X    
14. A. Review with management and the independent auditors the Company's year-end audited financial statements to be included in the Company's annual report on Form 10-K and the independent auditors' report thereon, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," ("MD&A") and recommend to the Board of Directors whether the Company's yearend audited financial statements should be included in the Company's Form 10-K. X    
B. Review with management and the independent auditors the Company's quarterly financial statements, including the Company's disclosures under MD & A.   X  
15. Review with the independent auditors (i) 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 analyses of the effects of alternative GAAP methods on the financial statements, (ii) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company, (iii) critical accounting policies of the Company and (iv) any other major issues regarding accounting principles and financial statement presentations. X    
16. Review disclosures, if any, made to the Audit Committee by the Company's CEO and CFO during their certification process for the Form 10-K and Form 10-Q regarding 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 Company's internal controls.   X X
17. A. Prior to disclosure, review and discuss the quarterly and annual earnings releases; X X  
B. If practicable, prior to disclosure, at least one member of the Audit Committee review and discuss types of financial information presented to analysts and rating agencies (other than monthly sales press releases) and earnings guidance not previously made available to the public followed by a report to the Audit Committee at its next regular meeting of such review;

paying particular attention to any use of "proforma" or "adjusted" non-GAAP information.
    X
18. Discuss with the Company's General Counsel legal matters that may have a material impact on the financial statements or the Company's compliance polices.     X
19. Discuss with the independent auditors their judgments about the clarity of the Company's financial disclosure practices and the quality and appropriateness of the accounting principles and estimates and other judgments applied in the Company's financial reporting. X    
20. Consider and approve, if appropriate, changes to accounting principles applied in the Company's financial reporting.     X
21. Review, in consultation with the independent auditors, the internal auditors and the financial management of the Company, the adequacy and effectiveness of the Company's internal controls and procedures for financial reporting and the independent auditors' annual report on those controls. X    
22.

Review at least quarterly the findings and recommendations of the internal auditors and management's actions regarding internal audit recommendations.

  X  
23. Discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures. X    
24. Discuss the guidelines and policies governing the process by which risk assessment and management is undertaken by the Company. X   X
25. Assess 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 employees of the Company of concerns regarding questionable accounting or auditing matters. X   X
26. Review and approve the Audit Committee report that is required by the rules of the SEC to be included in the Company's annual proxy statement. X    
27. As necessary, recommend to the Board of Directors, changes to the Committee's Charter and to this checklist.     X
28. Annually review the Committee's own performance. X    
29. Consult with and retain such advisors and consultants as the Committee deems necessary, including legal counsel (who may be counsel to the Company), accounting and other advisors.     X
30. Report to and review with the Board of Directors any issues that arise with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's independent auditors or the Company's internal audit function.     X
31. Report all actions taken at its meetings to the Board of Directors at the next following meeting of the Board.   X X
32. Receive a report regarding compliance with the Company's Treasury Policy. X    
33. Review the results of the various audits (statutory, benefit plans, etc.) conducted by the Company's independent auditors. X   X

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