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As amended effective January 30, 2013
The Audit Committee ("Committee") will assist the Ashland Inc. ("Company") Board of Directors ("Board") in fulfilling its oversight responsibilities relating primarily to (a) the integrity of the Company's financial statements and financial reporting process; (b) the integrity of the Company's systems of internal accounting and financial controls; (c) the performance of the Company's internal audit function and independent auditors; (d) the independent auditors' qualifications and independence, and the audit of the Company's financial statements; (e) the Company's risk management policies and processes; (f) the Company's financial affairs; and (g) legal and regulatory compliance requirements.
The Committee shall review and approve the report required by the rules of the Securities and Exchange Commission ("SEC") to be included in the Company's annual proxy statement. The Committee will maintain effective working relationships with and open communication between the Board, management and internal and independent auditors.
The Audit Committee will be composed of three or more directors, as determined by the Board. The Board elects the members of the Committee upon the recommendation of the Governance and Nominating Committee at the annual organization meeting of the Board for terms of one year, or until their successors are duly elected and qualified. Members shall serve at the pleasure of the Board. Unless a Chairman is elected by the full Board, the members may designate a Chairman by majority vote of the full membership of the Committee.
The Committee's composition shall meet the independence and expertise requirements for audit committees imposed by the New York Stock Exchange ("NYSE"), Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended, and any applicable rules or regulations of the SEC, in each case as in effect from time to time. At least one member of the Committee shall be an "audit committee financial expert," as defined by the SEC.
A director may not serve as a member of the Committee if he or she serves on the audit committees of more than two other public companies unless the Board determines that such simultaneous service and time commitment would not impair the director’s ability to serve effectively on the Committee.
The Committee will have a minimum of four scheduled meetings each year coincident with regularly scheduled Board of Directors' meetings, plus additional meetings as circumstances require. A majority of the members of the Committee will constitute a quorum for the transaction of business. The Committee will keep minutes of its meetings, and will regularly report to the Board on its activities, making recommendations as appropriate.
The Committee will carry out its oversight responsibilities through a variety of processes. It is management's responsibility to prepare the Company's financial statements and to develop and maintain adequate systems of internal accounting and financial controls, and it is the internal and independent auditors' responsibility to review, and, when appropriate, audit those financial statements and internal control systems. In carrying out its oversight responsibilities, the Committee shall rely on the Company's management and the internal and independent auditors. The Committee cannot provide any expert or special assurances as to the Company's financial statements or internal controls or any professional certification as to the independent auditors' work.
In undertaking its oversight responsibilities, the Committee will take appropriate actions to set the overall corporate tone for quality financial reporting, sound internal accounting and financial controls and compliance with laws and regulations. In discharging its oversight role, the Committee may, as appropriate and necessary, institute special investigations, including hiring experts to assist as needed. The following are the primary recurring processes that will be utilized by the Committee in carrying out its oversight responsibilities. The Committee will supplement these recurring processes as appropriate for changing circumstances.
The Committee may form and delegate authority to subcommittees. In particular, the Committee may delegate to one or more of its members the authority to pre-approve audit and/or non-audit services, provided that the decisions of any member(s) to whom pre-approval authority is delegated shall be presented to the Committee at the next Committee meeting.
The Committee shall have the authority to retain such outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion. The Committee shall have sole authority to approve related fees and retention terms.
The Committee shall report to the Board after each Committee meeting and shall conduct and present to the Board an annual assessment of its performance under its charter. The Committee shall review at least annually the adequacy of this charter and present any recommended additions, changes or deletions to the Board through the Governance and Nominating Committee.