**Exhibit10.22**

 

**EARLE M. JORGENSEN COMPANY**

**AUDIT COMMITTEE CHARTER**

 

# **A.**                                    Purpose

 

The AuditCommittee (the “Committee”) shall provide assistance to the members ofthe Board of Directors (the “Board of Directors” or the “Board”)of Earle M. Jorgensen Company (the “Company”) in fulfilling theiroversight functions. In so doing, it shall be the goal of the Committee tomaintain free and open means of communication between the members of the Board,the Company’s internal auditors, the Company’s independent public accountantswho audit the Company’s financial statements (the “Auditors”), and theCompany’s financial management.

 

The functions of the Committee are enumerated insection C of this Charter.

 

While the Committee has the functions set forth inthis Charter, it is not the duty of the Committee to plan or conduct audits orto determine that the Company’s financial statements are complete and accurateor are in accordance with generally accepted accounting principles.  The responsibility to plan and conduct auditsis that of the Auditors.  The Company’smanagement has the responsibility to determine that the Company’s financialstatements are complete and accurate and in accordance with generally acceptedaccounting principles.  It is also notthe duty of the Committee to assure the Company’s compliance with laws andregulations.  The primary responsibilityfor these matters rests with the Company’s management.

 

In its oversight capacity, the Committee is neitherintended nor equipped to guarantee with certainty to the full Board andstockholders the accuracy and quality of the Company’s financial statements andaccounting practices.  The Committee cando no more than rely upon information it receives, questions and assesses infulfilling its functions.

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# **B.**                                    Composition

 

The Committee shall have at least three (3)members.  The Committee shall becomposed solely of directors who are independent of the management of theCompany and are free of any relationship that, in the opinion of the Board, mayinterfere with their exercise of independent judgment as a Committeemember.  Committee members and theCommittee Chairman shall be designated by the full Board of Directors upon therecommendation of the Chairman of the Board.

 

All members of the Committee must be financiallyliterate and at least one member must satisfy the requirements of a “financialexpert” under the Sarbanes-Oxley Act, in each case in the judgment of theBoard.

 

Other directors may attend and participate asnonvoting members at any meeting of the Committee, subject to exclusion at therequest of the Chairman if matters sensitive to conflicts of interest orindependence are to be discussed.

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# **C.**                                    Functions

 

The Committee’s oversight functions may be dividedinto the following general categories: (1) assessing internal controls system established by management, (2)overseeing financial reporting and (3) evaluating independent audit processes.The Committee shall:

 

## **1.**                                      Internal ControlsProcesses

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### a.                                       Assistthe Board of Directors of the Company in fulfilling its oversight functionswith respect to the quality, integrity and annual independent audit of theCompany’s annual financial statements.

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### b.                                      Reviewperiodically the Company’s procedures for assuring compliance with laws andregulations throughout the Company.

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### c.                                       Reviewthis Charter at least annually or as conditions dictate.

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### d.                                      Performsuch other functions as assigned by law, the Company’s certificate ofincorporation or bylaws, or the Board of Directors.

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### e.                                       Reviewperiodically with management the status of pending litigation, taxation mattersand other areas of oversight of compliance with applicable laws and regulationsas may be appropriate.

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### f.                                         Reviewperiodically policies and procedures covering officers’ expense accounts,perquisites and the use of corporate assets and discuss the results of suchreview with the Auditors.

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### g.                                      TheCommittee shall have the authority to investigate any matter brought to itsattention and to retain outside counsel for this purpose if it believes it tobe appropriate.

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### h.                                      Reviewwith the Auditors and the internal auditors the adequacy of the Company’ssystem of internal controls and disclosure controls and procedures, includingcomputerized information system controls and security, and any relatedsignificant findings and recommendations of the Auditors and the internalauditors, together with management’s responses thereto.

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### i.                                          Approveand periodically review the Company’s compliance with its Code of Ethics forSenior Financial Officers and Chief Executive Officer and monitor compliancewith the Code of Ethics.

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### j.                                          Establishprocedures for (a) the receipt, retention, and treatment of complaints receivedby the Company regarding accounting, internal accounting controls, or auditingmatters, and (b) the confidential, anonymous submission by employees of theCompany of concerns regarding questionable accounting or auditing matters.

 

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## **2.**                                      Reporting Process

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### a.                                       Reviewwith management and the Auditors the Company’s annual financial statements tobe included in the Company’s Annual Report on Form 10-K prior to filing withthe Securities and Exchange Commission (“SEC”).

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### b.                                      Reviewwith management and the Auditors the Company’s interim financial statements tobe included in the Company’s Quarterly Reports on Form 10-Q prior to filingwith the SEC. The Chairman of the Committee may represent the entire Committeefor the purposes of this review.

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### c.                                       Reviewthe earnings releases with management and the Auditors prior to release.  The Chairman of the Committee may representthe entire Committee for purposes of this review.

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### d.                                      Discusswith the Auditors their judgments about the quality, not just theacceptability, of the Company’s accounting principles and financial disclosurepractices used or proposed and the appropriateness of significant managementjudgments.

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### e.                                       Discusswith management and the Auditors the effect of regulatory and accountinginitiatives as well as off-balance sheet structures on the Company’s financialstatements.

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### f.                                         Reviewperiodically with management and approve transactions involving managementand/or members of the Board, which would require disclosure under SEC rules.

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### g.                                      Reportperiodically on Committee activities to the full Board and based upondiscussions with, and reliance upon, management and the Auditors, issue annualsummary report (including appropriate oversight conclusions) suitable forsubmission to the Company’s shareholders. In addition, the Committee will provide any other auditcommittee-related disclosure, in filings with the Securities and ExchangeCommission (“SEC”) or otherwise required by applicable securities laws, rulesand regulations or by the rules of any securities exchange or market on whichsecurities of the Company are listed or quoted.

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## **3.**                                      Relationship withIndependent Auditors and Internal and Independent Audit Process

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### a.                                       TheAuditors are ultimately accountable to the Board and the Committee, asrepresentatives of the Company’s stockholders, but shall report directly to theCommittee.  The Committee shall bedirectly responsible for the appointment, replacement or termination,compensation and oversight of the work of the Auditors (including resolution ofdisagreements between management of the Company and the Auditors regardingfinancial reporting) for the purpose of preparing or issuing an audit report orrelated

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### work. All auditingservices and non-audit services provided to the Company by the Auditors shallbe preapproved by the Committee in accordance with such rules or limitationsthe Committee adopts.  The Committee maydelegate, subject to any rules or limitations it may deem appropriate, to oneor more designated members of the Committee the authority to grant suchpreapprovals; provided, however, that the decisions of any member to whomauthority is so delegated to preapprove an activity shall be presented to thefull Committee at its next scheduled meeting. The Committee has delegated to the Committee Chairman the authority topreapprove accounting/auditing/tax services involving fees less than $50,000.

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### b.                                      TheCommittee shall review and discuss with the Auditors all significantrelationships the Auditors have with the company to determine the Auditors’independence and effectiveness, and obtain and review a report from theAuditors concerning the Auditors’ internal quality control procedures; anymaterial issues raised by the most recent internal quality-control review, or peerreview, of the firm, or by any inquiry or investigation by governmental orprofessional authorities, within the preceding five (5) years, respecting oneor more independent audits carried out by the firm, and any steps taken to dealwith any such issues.  The Committeeshall obtain a formal written statement from the Auditors not less thanannually delineating all relationships between the Company and the Auditors andconfirming their independence, and actively engage in dialogue regardingdisclosed relationships or services, which may impact the objectivity andindependence between the Auditors and the Company.  The Committee shall also take appropriate action to ensure theindependence of the Auditors.  Inconsidering the independence of the Auditors, the Committee will review thenature of the services provided by the Auditor’s firm and the fees charged, andsuch other matters as the Committee deems appropriate.

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### c.                                       Reviewwith the Auditors and management the audit plan of the Auditors for the currentyear and the following year.  Review theexperience and qualifications of the senior members of the Auditor’s team.

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### d.                                      Reviewwith the Auditors and financial and accounting personnel the adequacy andeffectiveness of the accounting, financial and computerized information systemscontrols of the Company.

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### e.                                       Reviewthe performance of the Auditors and discharge the Auditors when circumstanceswarrant.

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### f.                                         Discusswith the Auditors the matters required to be discussed by Statement on AuditingStandards No. 61 relating to the conduct of the audit.

 

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### g.                                      Reviewany significant disagreements between management and the Auditors in connectionwith the preparation of the Company’s financial statements.

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### h.                                      Reviewwith the Auditors and management the extent to which changes or improvements infinancial or accounting practices, as approved by the Committee, have beenimplemented.

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### i.                                          Arrangefor the Auditors to be available to the full Board of Directors at least annuallyto help provide a basis for the Board’s approval of the Auditor’s appointmentand provide an open avenue of communication among the Auditors, management andthe Board of Directors.

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### j.                                          Reviewand approve or reject the hiring of employees or former employees of theAuditors who participated in any capacity in audit engagement team for theCompany.

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### k.                                       Obtainand review a report from the Auditors at least annually as to (a) all criticalaccounting policies to be used, (b) all alternative treatments of financialinformation within generally accepted accounting principles that have beendiscussed with management of the Company, the ramifications of the use of suchalternative disclosures and treatments and the treatment preferred by theAuditors, and (c) other material written communications between the Auditorsand management of the Company, including management letters and schedules ofunadjusted differences.

 

# **D.**                                    Meetings

 

The Committee shall meet at least four (4) times peryear, once to review the audit plan of the internal auditors, once to reviewthe audit plan of the Auditors, once to review the Company’s annual auditedfinancial statements prior to their issuance, and once to review the post-auditfindings of the Auditors and the internal auditors.  The Committee shall meet more frequently as circumstances requireand shall hold special meetings as may be called by the Chairman of theCommittee or at the request of the Auditors, the internal auditors ormanagement. Members of senior management, the Auditors, the internal auditorsor others may attend meetings of the Committee at the invitation of theCommittee and shall provide pertinent information as necessary.  The Committee shall meet with the Auditors,the internal auditors and management in separate executive sessions as neededto discuss any matters that the Committee or these groups believe should bediscussed privately with the Committee. Meetings may be by telephone.

 

The Chairman of the Committee shall set the agenda ofeach meeting and arrange for the distribution of the agenda, together withsupporting material, to the Committee members prior to each meeting.  Matters to be covered at meetings will be asprovided in the Audit Committee Meeting Planner attached hereto as Schedule1.  The Chairman will also cause minutesof each meeting to be prepared and circulated to the Committee Members.

 

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# **E.**                                      Communicationwith the Board of Directors

 

The Committee shall, after each meeting, report itsactivities, findings and conclusions to the full Board of Directors.

 

March, 2003

 

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