Audit Committee Charter
(as amended October 31, 2013)
The Committee is appointed by the Board of Directors to (a) assist the
Board in its oversight of (i) the integrity of the Company's consolidated
financial statements, (ii) the Company's compliance with legal and
regulatory requirements, (iii) the Company's system of internal controls,
(iv) certain aspects of the Company's risk management as described
herein, (v) the qualifications and independence of the Company's independent
registered public accounting firm ("independent auditor") and
(vi) the performance of the Company's internal and independent auditors,
and (b) prepare a report to be included in the Company's annual proxy
It is the responsibility of the Company's management to prepare consolidated
financial statements that are complete and accurate and in accordance with
generally accepted accounting principles in the United States ("GAAP")
and to establish satisfactory internal control over financial reporting. It
is the responsibility of the Company's independent auditor to audit
the Company's financial statements and the effectiveness of the Company's
internal control over financial reporting. The Committee's responsibility
in this regard is one of oversight and review. The Committee does not provide
any expert or other special assurance as to such financial statements concerning
compliance with laws, regulations or GAAP.
- The Committee shall be comprised of at least three
(3) Board members appointed by the Board after considering the recommendation
of the Nominating and Governance Committee. No Board member shall serve
simultaneously on the Committee and the audit committee of more than
two (2) other public companies, unless the Board shall determine that such
simultaneous service would not impair the Board member's ability to serve effectively
on the Committee and such determination is disclosed in the proxy statement.
Committee members shall serve at the pleasure of the Board and for such
term as the Board determines. The Board shall designate one Committee member
as the Committee's chair (the "Chairman").
- Each Committee
member shall have no material relationship with the Company and shall
satisfy the independence requirements of the Company, the New York Stock
Exchange ("NYSE"), the Securities Exchange Act of 1934 (the "Exchange
Act"), and the rules and regulations of the Securities and Exchange
- Each Committee member shall be financially
literate in accordance with NYSE requirements or must become financially
literate in accordance with such requirements within a reasonable period
of time after his or her appointment to the Committee.
- At least one
Committee member shall have accounting or related financial management
expertise in accordance with NYSE requirements, and at least one Committee
member shall, in the judgment of the Board, be an "audit committee financial expert" as
defined by the SEC.
- The Committee shall hold regular meetings at least four times per
year and report to the Board on a regular basis. Meetings shall include
any participants the Committee deems appropriate and shall be of sufficient
duration and scheduled at such times as the Committee deems appropriate
to discharge properly its responsibilities.
- The Committee shall meet
periodically with management, the independent auditor and the head of
the internal audit department in separate executive sessions.
Committee shall evaluate the independent auditor's qualifications,
performance and independence and present its conclusions to the Board
of Directors. The Committee shall review with the full Board any issues
arising 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 auditor, or the performance of the internal audit department.
- The Committee may form and delegate to one or more subcommittees all
or any portion of the Committee's authority, duties and responsibilities,
and may establish such rules as it determines necessary or appropriate
to conduct the Committee's business.
- The Committee shall have
direct access to, and complete and open communication with, the Company's
management and internal and independent auditors and may obtain advice
and assistance from internal legal, accounting or other advisors. The
Committee may retain independent legal, accounting or other advisors.
The Committee shall have authority to perform or supervise investigations,
and the Company shall provide for appropriate funding, as determined
by the Committee, for the payment of expenses related to any such investigation.
- The Company shall provide for appropriate funding, as determined by
the Committee, for the payment of: (i) compensation to the independent
auditor engaged for the purpose of preparing or issuing an audit report
or performing other audit, review or attest services or other permitted
services for the Company; (ii) ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties
and responsibilities; and (iii) compensation to independent legal, accounting
or other advisors retained by the Committee.
- The Committee shall review
and assess annually its performance and report the results to the Board.
The Committee shall review and assess annually the adequacy of this charter
and, if appropriate, recommend changes to the charter to the Board.
Authority, Duties and Responsibilities
The Committee shall:
Oversight of the Company's Relationship with the Independent Auditor
- Have the sole authority and responsibility to appoint (which appointment
may be presented to shareholders for ratification), compensate, retain,
oversee, evaluate and, when appropriate, replace the independent auditor
engaged for the purpose of preparing or issuing an audit report or performing
other audit, review and attest services. The independent auditor shall
report directly to the Committee.
- Preapprove all audit, review and attest services
and permitted non-audit services to be performed for the Company by its
independent auditor, subject to the de minimis exception for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act that are
approved by the Committee prior to the completion of the audit. The Committee
may form and delegate authority to subcommittees consisting of one or
more members the authority to grant preapprovals of audit and permitted
non-audit services, provided that decisions of such subcommittee to grant
preapprovals shall be presented to the full Committee at its next quarterly
- Review and evaluate annually the qualifications, performance and independence
of the lead partner of the independent auditor and assure regular rotation
of the lead audit partner, reviewing partner and other audit engagement
team partners of the independent auditor as required by law. Consider,
as appropriate, the rotation of the independent auditor. Review and assess
annually the qualifications and performance of the independent auditor.
- Evaluate the independence of the independent auditor by, among other
things, ensuring that the independent auditor periodically, and at least
annually, submits to the Committee a formal written report delineating
all relationships between the independent auditor and the Company, including
any non-audit service permitted under the Exchange Act provided to the
Company and the matters set forth in Public Company Accounting Oversight
rules or other applicable laws, regulations or standards. Review and evaluate
such report and engage in a dialogue with the independent auditor with respect
to any disclosed relationships or services that may impact their objectivity
- Obtain, review and evaluate, at least annually, a report
by the independent auditor describing the independent auditor's internal
quality-control procedures, any material issues raised by the most recent
internal quality-control review, peer review, or PCAOB review, of the independent
auditor, 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 independent auditor, and any steps taken in response
to any such issues.
- Set policies for the Company with respect to hiring
current and former employees of the independent auditor.
Oversight of the Company's Internal Audit Department and Internal
- Approve the appointment and, when and if appropriate, replacement
of the head of the internal audit department, who shall functionally
report directly to the Committee. Review the qualifications, performance
and compensation of the head of the internal audit department. Review,
at least annually, the administrative reporting line of the head of internal
audit, including the impartiality of the head of internal audit and that
the administrative reporting line does not unduly influence the head
of internal audit.
- Review the significant reports to management, or summaries thereof, prepared
by the internal audit department and management's responses.
as appropriate, the adequacy of the Company's internal controls with
the internal and independent auditors and management including, without
limitation, reports from the Chief Executive Officer and the Chief Financial
Officer regarding significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting or any
fraud, whether or not material, that involves management or other employees
who have a significant role in the Company's internal controls.
- Review and discuss, as appropriate, any major issues as to the adequacy
of the Company's internal controls and any special audit steps adopted
in light of material control deficiencies.
- Review the Chief Executive
Officer and Chief Financial Officer certification process and the role
of the Company's Disclosure Committee.
- Review and discuss with management
and the internal and independent auditors management's annual report
on, and the independent auditor's evaluation of the effectiveness
of, the Company's internal control over financial reporting. Receive
reports from management regarding management's quarterly evaluations
of changes in internal control over financial reporting and discuss with
management and the internal and independent auditors as appropriate.
- Review the annual plan and scope of work of the internal audit department,
including responsibilities, budget and staffing. Review and approve the
internal audit department charter, as appropriate.
Oversight of the Financial Statements, Audit and Disclosure
- Review (i) the results of internal and independent audits
and reviews of, and meet to review and discuss with management and the
independent auditor, the Company's Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q (including the Company's annual audited consolidated
financial statements and condensed consolidated quarterly and year-to-date
financial statements) and (ii) the Company's specific disclosures
under "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and other matters required by applicable
PCAOB standards or under applicable legal, regulatory or NYSE requirements.
- Regularly review with the independent auditor significant issues regarding
accounting principles and financial statement presentations, including
(i) any significant changes in the Company's selection or application
of accounting principles; (ii) analyses prepared by management and/or the
independent auditor 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; and (iii) any significant communications between the independent
audit team and the independent auditor's national office respecting
auditing or accounting issues presented by the engagement.
- Review and
discuss with the independent auditor and, to the extent appropriate,
management, in connection with the Company's Annual Report on Form
10-K, and otherwise, as appropriate, any reports of the independent auditor
required by law or professional auditing standards, including reports
on: (i) critical accounting policies and practices used in preparing
the financial statements; (ii) alternative treatments under GAAP for policies
and procedures related to material items discussed with management, ramifications
of the use of such alternative disclosures and treatments, and the treatment
preferred by the independent auditor; and (iii) other material written
communications between the independent auditor and management of the Company,
such as any "management" or "internal
control" letter issued, or proposed to be issued, by the independent
auditor to the Company, and a schedule of unadjusted differences, if
- Discuss with the independent auditor the matters required to be discussed
relating to the audit, in accordance with applicable audit standards,
including the quality and appropriateness of the Company's accounting principles,
difficulties encountered in the course of the audit work, restrictions on
the scope of activities or access to requested information, significant
disagreements with management, and management's response.
the annual plan and scope of work of the independent auditor.
a statement from the independent auditor that the audit was conducted
in a manner consistent with PCAOB standards and applicable portions of
Section 10A of the Exchange Act.
- After review, recommend to the Board the
acceptance and inclusion of the annual audited consolidated financial
statements in the Company's Annual Report on Form 10-K.
- Review or discuss, as
and when appropriate: (i) the information to be disclosed and the type
of presentation to be made in earnings press releases, including the
use of "pro
forma" or "adjusted" non-GAAP information and any reconciliation
to GAAP information, that have been, or will be, issued by the Company,
as well as the financial information and earnings guidance that have been,
or will be, provided to analysts and rating agencies; and (ii) the effect
of regulatory and accounting initiatives and off-balance sheet structures
on the Company's consolidated financial statements.
- Be responsible
for resolution of disagreements between management and the independent
auditor regarding financial reporting.
Oversight of Compliance with Legal and Regulatory Requirements
- When deemed appropriate, review with the Company's
Chief Legal Officer, Chief Compliance Officer, or appropriate delegates,
legal, disclosure or other matters that may have a material impact on
the Company's consolidated financial statements or on the Company's
- Obtain, review and evaluate reports from the Company's
Chief Compliance Officer or management with respect to the Company's
policies and procedures regarding compliance with applicable legal and regulatory
requirements, and the Company's Code of Ethics and Business Conduct.
The Company's Chief Compliance Officer shall have the authority to
communicate personally to the Committee promptly on any matter involving
criminal conduct or potential criminal conduct and, at least annually, shall
report to the Committee on the implementation and effectiveness of the Company's
compliance and ethics program.
- Establish 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.
- Discuss with
management, the head of the internal audit department and the independent
auditor any significant correspondence with regulators or governmental
agencies and any external or employee complaints or published reports
that raise material issues regarding the Company's financial statements or accounting
- Review and discuss, as and when appropriate, the internal
audit department's review of perquisites, expenses and conflicts of
interest, if any, of members of senior management.
- Provide the report
of the Committee as required by the SEC for inclusion in the Company's
annual proxy statement.
Oversight of the Company's Risk Management
- Review or discuss, as and when appropriate, with the Chief Risk Officer,
the head of the internal audit department and other members of management,
the Company's guidelines and policies that govern the process for
risk assessment and risk management.
- Review the major franchise, legal
and compliance risk exposures of the Company and the steps management
has taken to monitor and control such exposures.
Coordination with Management and Other Board Committees
- Coordinate with management, including the Chief Risk Officer, and
with the Operations and Technology Committee and the Risk Committee to
help ensure that the committees have received the information necessary
to permit them to fulfill their duties and responsibilities with respect
to oversight of risk management and risk assessment guidelines and policies.
- Make such recommendations with respect to any of the above and other matters
as the Committee deems necessary or appropriate.
- Have such other authority,
duties and responsibilities as may be delegated to the Committee by the
The Committee's authority, duties and responsibilities are discharged
through evaluating reports given to the Committee, presentations made to
the Committee and other significant financial reporting decisions reported
to the Committee by management, the internal and independent auditors and
by other persons or organizations the Committee deems appropriate.