The Audit Committee monitors the company’s financial reporting processes and systems of internal control over financial reporting, the independence and the performance of the independent auditors and the performance of the internal auditors.

The Audit Committee consists entirely of independent directors. The board has determined that all Audit Committee members are independent under the listing standards of the New York Stock Exchange and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. Its responsibilities are set forth in the Audit Committee Charter (PDF). The Audit Committee met 12 times in 2008.

All members of the Audit Committee are financially literate and John C. Pope, the Committee Chair, and Fredric G. Reynolds are “audit committee financial experts” within the meaning of the regulations of the Securities and Exchange Commission. Because Mr. Pope serves on the audit committees of more than three public companies, pursuant to the listing standards of the New York Stock Exchange, and after reviewing meeting attendance records and other matters it deemed relevant, the board determined that such simultaneous services on such audit committees does not impair Mr. Pope’s ability to serve effectively on the company’s Audit Committee. No member of the Audit Committee received any payments in 2008 from the company or its subsidiaries other than compensation received as a director of the company.