Charter of the Audit Committee of the Board of Directors

1. Audit Committee Purpose, General Responsibilities and Authority

The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The Audit Committee’s primary duties and responsibilities are to:

• Monitor the integrity of the Company’s financial reporting process and systems of internal controls regarding finance and accounting matters.
• Appoint the Company’s independent auditors engaged to prepare audit reports or to perform other audit, review or attest services related to the Company’s financial statements and reports, and monitor their independence and oversee their performance.
• Resolve any disagreements between management and the independent auditors regarding financial reporting, and otherwise provide an avenue of communication among the independent auditors, management, and the Board of Directors.

The Audit Committee has the authority to: conduct any investigation appropriate to fulfilling its responsibilities, and has direct access to the independent auditors as well as anyone in the organization; to employ legal counsel and other advisers, and to incur ordinary administrative expenses, as determined by the Committee to be necessary or appropriate to the discharge of its responsibilities, all without further approval of management or the Board and at the Company’s expense.

2. Audit Committee Composition and Meetings

Audit Committee members shall meet the independence and experience requirements of The NASDAQ Stock Market, Inc., as from time to time in effect and applicable to the Company. Subject to such requirements, the number and identity of Audit Committee members shall be determined by the Board. The Audit Committee Chair shall be designated by the Board or, if not so designated, by majority vote of the Committee membership.

The Committee shall meet with such frequency as the Chair or any two Committee members shall determine to be appropriate to meeting its responsibilities under this Charter. The Committee shall meet privately in executive session at least quarterly, and privately with the independent auditors at least annually to discuss any matters that the Committee or auditors believe should be discussed.

3. Specific Audit Committee Responsibilities and Duties



Review Procedures

The Committee shall:


1. Review Audit Committee Charter – Review and reassess the adequacy of this Charter at least annually and have the document published at least every three years in accordance with SEC regulations.
2. Review Audited Financial Statements – Review the Company’s annual audited financial statements prior to filing or distribution, to include discussion with management and independent auditors of significant issues regarding accounting principles, practices, and judgments; recommend whether such statements shall be released for filing with the SEC; and discuss any matters required to be communicated to audit committees in accordance with the AICPA's Statement of Auditing Standards (SAS) 61.
3. Consider Integrity of Financial Reporting Processes and Controls – In consultation with management and the independent auditors, consider the integrity of the Company’s financial reporting processes and controls, to include discussing significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures, and reviewing internal control reviews prepared by the independent auditors, together with management’s responses.
4. Assure That Quarterly Financial Results Are Reviewed – Assure that the Company’s quarterly financial results are reviewed by the independent auditors prior to their release; inquire of the independent auditors whether any matters arising in connection with such review are required to be communicated in accordance with the SAS 61, and review any such matters.
5. Review Proposed Releases Concerning Anticipated Future Financial Performance – Consider the nature and content of financial performance expectations proposed to be released by management, and discuss with management the basis for and reasonableness of such expectations.


Independent Auditors


6. Appoint the Independent Auditors – The Audit Committee shall be directly responsible for the selection and appointment of the independent auditors, who shall report directly to the Committee.
7. Review Independence and Performance – The Audit Committee shall review the independence, and oversee and evaluate the performance of, the independent auditors.
8. Approve Services and Fees – The Committee shall review and approve, in advance, all services to be provided to the Company by the independent auditors, and shall determine and approve the fees and other compensation to be paid by the Company for all such services.
9. Review Significant Relationships – On an annual basis, the Committee shall obtain from the independent auditors a written statement of all significant relationships they have with the Company that could impair their independence or objectivity, shall discuss such matters with the auditors, and shall take appropriate actions to assure auditor independence.
10. Review Audit Plan and Engagement Letter – The Committee shall review the independent auditors' annual audit plan and engagement letters. This review may include such issues as scope, staffing, locations, reliance upon management, and general audit approach.
11. Consider Auditors' Judgments About the Quality of the Company's Accounting Principles – The Committee shall consider the independent auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.


Other Audit Committee Responsibilities

The Audit Committee shall:


12. Annually prepare a report to shareholders to be included in the Company’s annual proxy statement, as required SEC by regulations.
13. Establish and maintain a system for confidential, anonymous reporting by employees of concerns regarding questionable accounting or auditing matters, and assure appropriate review, retention and disposition of any reports submitted through such system, and of any other complaints received concerning accounting, internal accounting controls or auditing matters.
14. Perform any other activities consistent with this Charter, the Company’s bylaws, and governing law, as the Committee or the Board deems necessary or appropriate.
15. Maintain minutes of meetings, and periodically report to the Board of Directors concerning its activities.

Revised: February 6, 2004