Audit Committee Charter
A. PURPOSE AND SCOPE
The primary function of the Audit Committee (the "Committee") is
to assist the Board of Directors in fulfilling its responsibilities by
appointing, compensating and overseeing the services provided by the
Corporation's independent accounting firm. The Committee shall also be
responsible for reviewing: (i) the financial reports provided by the
Corporation to the Securities and Exchange Commission ("SEC"), the
Corporation's shareholders or to the general public, and (ii) the Corporation's
internal financial and accounting controls.
The Committee shall be comprised of a minimum of three directors as
appointed by the Board of Directors, who shall meet the independence and audit
committee composition requirements under any rules or regulations of The NASDAQ
National Market, as in effect from time to time, and shall be free from any
relationship that, in the opinion of the Board of Directors, would interfere
with the exercise of his or her independent judgment as a member of the
Committee. In addition, no member may, other than in his or her capacity as a
member of the Committee, the Board of Directors or any other Board committee,
(i) accept any consulting, advisory or other compensatory fee from the issuer;
or (ii) be an affiliated person of the Corporation or any of its subsidiaries.
All members of the Committee shall be able to read and understand
fundamental financial statements, including a balance sheet, cash flow
statement and income statement when appointed to the Committee. At least one
member of the Committee shall have employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background which results in the individual's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
If the Board determines that membership on the Committee by an individual
who does not meet the independence requirements is in the best interests of the
Corporation and its shareholders, it may apply to the Securities and Exchange
Commission and the Nasdaq for an exemption from these requirements. If such an
exemption is granted, the Board shall disclose in the next proxy statement
after such grant the nature of the relationship and the reasons for the
The members of the Committee shall be elected by the Board of Directors at
the meeting of the Board of Directors following each annual meeting of
stockholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation or removal. Unless a Chair is
elected by the full Board of Directors, the members of the Committee may
designate a Chair by majority vote of the full Committee membership.
C. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:
and assess the adequacy of this Charter periodically as conditions dictate,
but at least annually (and update this Charter if and when appropriate).
with representatives of management and representatives of the independent
accounting firm the Corporation's audited annual financial statements
prior to their filing as part of the Annual Report on Form 10-K. After
such review and discussion, the Committee shall recommend to the Board of
Directors whether such audited financial statements should be published in
the Corporation's annual report on Form 10-K. The Committee shall also
review the Corporation's quarterly financial statements prior to their
inclusion in the Corporation's quarterly SEC filings on Form 10-Q
steps designed to ensure that the independent accounting firm reviews the
Corporation's interim financial statements prior to their inclusion in the
Corporation's quarterly reports on Form 10-Q.
Independent Accounting Firm
and engage an independent accounting firm, and approve the fees and other
compensation to be paid to the independent accounting firm. The Committee
shall have the sole authority and responsibility to select, evaluate and,
when warranted, replace such independent accounting firm or to recommend
such replacement for shareholder approval in any proxy statement. The
Committee shall require the independent accounting firm to report directly
to the Committee.
an annual basis, receive from the independent accounting firm a formal
written statement identifying all relationships between the independent
accounting firm and the Corporation consistent with Independence Standards
Board ("ISB") Standard 1. The Committee shall actively engage in
a dialogue with the independent accounting firm as to any disclosed
relationships or services that may impact its independence. The Committee
shall take appropriate action to oversee the independence of the
independent accounting firm.
an annual basis, discuss with representatives of the independent
accounting firm the matters required to be discussed by Statement on
Auditing Standards ("SAS") 61, as it may be modified or
procedures to ensure pre-approval by the Committee of all audit services
as well as all permitted services to be provided by the independent
accounting firm that are not in connection with an audit or review of the
Corporation's financial statements. The Committee need not pre-approve the
non-audit services if the aggregate amount of the non-audit services
constitutes not more than 5% of the total revenues the Corporation paid to
the independent accounting firm during the fiscal year in which the
services were provided. The Committee may delegate to one member the
authority to pre-approve non-audit services. In that event, all
pre-approved non-audit services must be disclosed to the full Committee at
the next regularly scheduled meeting of the Committee.
with the independent accounting firm prior to the audit to review the
planning and staffing of the audit.
the performance of the independent accounting firm and arrange for the
replacement of the independent accounting firm when circumstances warrant.
Related Party Transactions
policies and procedures with respect to transactions between the
Corporation and its officers, directors, affiliates of officers and
directors or other related parties.
the extent deemed necessary by the Committee, engage outside counsel
and/or independent accounting consultants to review any matter under its
responsibility. The Committee shall have full authority and funding for
all employees of the procedures by which any employee may make
submissions, in a confidential and anonymous manner, regarding
questionable accounting, internal auditing controls or other auditing
matters. The Chair of the Committee shall be responsible for retaining and
reviewing all such complaints. Where appropriate, the Chair shall convene
a full meeting of the Committee to investigate and act on a complaint.
separately in executive session with the independent accounting firm or
representatives of management to discuss matters that the Committee
believes should be discussed privately with the independent accounting
firm or management, respectively.
Financial Reporting Processes
consultation with the independent accounting firm and management, review
annually the adequacy of the Corporation's internal financial and
accounting controls as well as the Corporation's critical accounting
with representatives of management any significant changes to generally
accepted accounting principles ("GAAP").
meetings, as appropriate, to discuss the matters under this Charter. The
Committee may invite legal counsel to attend the meeting.
in accordance with the rules of the SEC as modified or supplemented from
time to time, a written report of the audit committee to be included in
the Corporation's annual proxy statement for each annual meeting of
stockholders occurring after December 14,
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting