Audit Committee Charter July 27, 2005



The Audit Committee is appointed by the Board to monitor (1) the integrity of the financial statements of the Company, (2) the independent auditor's qualifications and independence, (3) the performance of the Company's internal audit function and independent auditors, and (4) the compliance by the Company with legal and regulatory requirements.


The Audit Committee shall prepare the report required by the rules of the Securities and

Exchange Commission (the "Commission") to be included in the Company's annual proxy statement.


Committee Membership:

The Audit Committee shall consist of no fewer than three members. The members of the Audit Committee shall meet the independence and experience requirements of The Nasdaq Stock Market, Inc., Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules and regulations of the Commission. At least one member of the Audit Committee shall be a financial expert as defined by the Commission. All members of the Audit Committee shall have a working familiarity with basic finance and accounting practices.


The members of the Audit Committee shall be appointed by the Board on the recommendation of the Nominating Committee. Vacancies on the Audit Committee shall be filled by the Board, and Audit Committee members may be replaced by the Board. Unless a Chairperson of the Audit Committee is elected by the full Board, the members of the Audit Committee may designate a Chairperson of the Audit Committee by majority vote of the full Committee Membership. In addition, the Board, or the Audit Committee by majority vote, may appoint a Vice-Chairperson to serve in the absence of the Chairperson.



The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. A majority of the members of the Audit Committee shall constitute a quorum for the transaction of business. Minutes of each meeting of the Audit Committee should be recorded. Approval by a majority of the members present at a meeting at which a quorum is present shall constitute approval by the Audit Committee. The Audit Committee may also act by unanimous written consent without a meeting. The Audit Committee shall meet periodically in executive session with any or all of the following: the independent auditor, the Chief Financial Officer, the Risk Management Officer, the Credit Risk Review Officer, and the internal Auditor. The Audit Committee or its Chairman shall meet with the independent auditors and management quarterly to review the Company's financial statements and related materials consistent with the items under "Financial Statement and Disclosure Matters" below. In addition, the Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.


Committee Authority and Responsibilities:

The Audit Committee shall have the sole authority to appoint, retain or replace the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. The independent auditor shall report directly to the Audit Committee.


The Audit Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which are approved by the Audit Committee prior to the completion of the audit. The Chairman of the Audit Committee shall be authorized to execute any such engagement letter or agreement with the independent auditors for and on behalf of the Company.


The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate with the authority to grant pre-approvals of permitted non-audit services subject to the de minimis exceptions described in Section 10A(i)(1)(B) of the Exchange Act, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.


In discharging its oversight role, the Audit Committee is empowered to investigate any matter it chooses with full access to all books, records, facilities and personnel of the Company. The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services for the Company; to any advisors retained by the Audit Committee; and ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties. The independent auditors are ultimately accountable to, and the selection, evaluation and replacement of such auditors are the responsibility of, the Audit Committee.


The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Board shall annually review the Audit Committee's performance.


The Audit Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in this Charter. However, in carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to assure to the directors and stockholders that the corporate accounting and reporting practices of the Company are in accordance with all requirements.


Accordingly, the Audit Committee shall:


Financial Statement and Disclosure Matters

Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.


Review and discuss with management and the independent auditor the Company's

quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor's reviews of the quarterly financial statements.


Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including any significant changes in the Company's selection or application of accounting principles, their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements.


Review and discuss quarterly reports from the independent auditors on:


(a) All critical accounting policies and practices to be used.


(b) All alternative treatments of financial information within generally accepted

accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor.


(c) Other material written communications between the independent auditor and

management, such as any management letter or schedule of unadjusted



Discuss generally with management the types of information to be disclosed in the Company's earnings press releases, including the use of "pro forma" or "adjusted" non-GAAP information, and discuss with management the types of presentations to be made to analysts and rating agencies.


Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.


Discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.


Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.


Review disclosures made to the Audit Committee by the Company's CEO and CFO, or the Company's Disclosure Committee or any member thereof, during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company's internal controls.


Oversight of the Company's Relationship with the Independent Auditor

Review and evaluate the lead partner of the independent auditor team.


Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor's internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company consistent with Independent Standards Board Standard 1. Evaluate the qualifications, performance and independence of the independent auditor, including actively engaging in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor and taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent auditor, considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, and taking into account the opinions of management and the internal auditors. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.


Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law.


Recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.


Meet with the independent auditor prior to the audit to discuss the audit plan.


Oversight of the Company's Audit and Risk Management Departments

Review and approve the appointment of the internal Auditor and Risk Management Officer, who shall both report directly to the Audit Committee.


Review and discuss the findings, of both the Audit and Risk Management Departments, that have been reported to management, management's responses, and the progress of the related corrective action plans.


Review and evaluate the adequacy of the work performed by the Audit and Risk Management Departments, and ensure that both Departments are independent and have adequate resources to fulfill their duties.


Review and discuss with the Auditor the planned scope of the internal audit.


Financial Reporting Processes

In consultation with the independent auditors, review the integrity of the Company's financial reporting processes, both the processes within the Company and those related to financial reporting provided by the Company to any governmental authorities and the public.


Consider the independent auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting.


Consider and approve, if appropriate, major changes to the Company's auditing and accounting principles and practices as suggested by the independent auditors or management.


Compliance Oversight Responsibilities

Meet with the examiners of the Office of the Comptroller of the Currency, at least once each supervisory cycle, to discuss the findings of their reviews, including conclusions regarding the audit function.


Monitor, track, and, where necessary, provide discipline to ensure effective and timely response by management to correct weaknesses or deficiencies in controls, and violations of law or regulation, as noted in internal or external audit reports, management reports or examination reports.


Obtain from the independent auditor assurance that it has not detected or otherwise become aware of information indicating that an illegal act has or may have occurred pursuant to Section 10A(b) of the Exchange Act.


Obtain reports from management, the Company's senior internal auditing executive and the independent auditor that the Company and its subsidiary/affiliated entities are in conformity with applicable legal requirements and the Company's Code of Conduct.


Review any requests for waivers to the Company's Code of Ethics, Business Code of Conduct or Insider Trading Policy, and submit any requests for waivers for directors, executive officers or senior financial officers to the Board of Directors for approval.


Review and approve all related party transactions required to be disclosed pursuant to Item 404 of SEC Regulation S-K.


Establish procedures for the receipt, retention and treatment of complaints received in accordance with the Company's Whistleblower Policy, including complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.


Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Company's financial statements, accounting policies or internal controls.


Discuss with the Company's General Counsel legal matters that may have a material impact on the financial statements or the Company's compliance policies.

Limitation of Audit Committee's Role:

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 Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor.