Audit Committee
Charter of Responsibilities and Functions

1.

Members. The Board of Directors appoints an Audit Committee of at least three members, consisting entirely of "independent" directors of the Board, and designates one member as chairperson.  For purposes hereof, "independent" shall mean a director who meets The Nasdaq Stock Market, Inc. ("NASDAQ") standards of "independence" for directors and audit committee members, as determined by the Board.

Each member of the Audit Committee must be finan­cially literate at the time of appointment, and at least one member of the Audit Committee shall be an "audit committee expert," as determined by the Board in accordance with Securities and Exchange Commission rules.  In addition, no Committee member may have participated in the preparation of the financial statements of the Company or any of the Company's current subsidiaries at any time during the past three years.

2.

Purposes, Duties, and Responsibilities. The purpose of the Audit Committee, at a minimum, must be to:

  • Represent and assist the Board of Directors in discharging its oversight responsibility relating to:  (i) the accounting, reporting, and financial practices of the Company and its subsidiaries, including the audits of the Company's financial statements; (ii) the surveillance of administration and financial controls and the Company's compliance with legal and regulatory requirements; (iii) the outside auditor's qualifications and independence; and (iv) the performance of the Company's internal audit function and the Company's outside auditor; and
  • Prepare the report required by the rules of the SEC to be included in the Company's annual proxy statement.

Among its specific duties and responsibilities, the Audit Committee shall, consistent with and subject to applicable law and rules and reg­lations promulgated by the SEC, NASD or other regulatory authority:

 

(i)

Be directly responsible, in its capacity as a committee of the Board, for the appointment, compensation, retention and oversight of the work of the outside auditor.  In this regard, the Audit Committee shall have the sole authority to appoint and retain, compensate, evaluate, and terminate when appropriate, the outside auditor, which shall report directly to the Audit Committee.

(ii)

Obtain and review, at least annually, a report by the outside auditor describing: (A) the outside auditor's internal quality-control procedures; and (B) any material issues raised by the most recent internal quality-control review, or peer review, 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 outside auditor, and any steps taken to deal with any such issues.

(iii)

Approve in advance all audit and permissible non-audit services to be provided by the outside auditor, and establish policies and procedures for the pre-approval of audit and permissible non-audit services to be provided by the outside auditor.

(iv)

Consider, at least annually, the independence of the outside auditor, including whether the outside auditor's performance of permissible non-audit services is compatible with the auditor's independence, and obtain and review a report by the outside auditor describing any relationships between the outside auditor and the Company, consistent with the Independence Standards Board Standard 1, and any other relationships that may adversely affect the independence of the auditor.

(v)

Review and discuss with the outside auditor: (A) the scope of the audit, the results of the annual audit examination by the auditor, and any problems or difficulties the auditor encountered in the course of its audit work and management’s response; and (B) any reports of the outside auditor with respect to interim periods.

(vi)

Review and discuss with management and the outside auditor the annual audited and quarterly financial statements of the Company, including:  (A) an analysis of the auditor's judgment as to the quality of the Company’s accounting principles, setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements; (B) the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," including accounting policies that may be regarded as critical; and (C) major issues regarding the Company's accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles and financial statement presentations.  In addition, the Committee shall receive reports from the outside auditor as required by the rules of the Securities and Exchange Commission.

(vii)

Recommend to the Board based on the review and discussion described in paragraphs (iv) - (vi) above, whether the financial statements should be included in the Annual Report on Form 10-K.

(viii)

Receive reports from the outside auditor and management regarding, and review and discuss the adequacy and effectiveness of, the Company’s internal controls, including any significant deficiencies in internal controls and significant changes in internal controls reported to the Audit Committee by the outside auditor or management.

(ix)

Receive reports from management regarding, and review and discuss the adequacy and effectiveness of, the Company’s disclosure controls and procedures.

(x)

Review and discuss earnings press releases, and corporate practices with respect to earnings press releases and financial information and earnings guidance provided to analysts and ratings agencies.  The chair of the Committee may represent the entire Committee for purposes of this review.

(xi)

Review and discuss the Company's practices with respect to risk assessment and risk management.

(xii)

Review and approval all "related party transactions," as defined in applicable Securities and Exchange Commission rules.

(xiii)

Oversee the Company's compliance systems with respect to legal and regulatory requirements.

(xiv)

Establish procedures for handling complaints regarding accounting, internal accounting controls and auditing matters, including procedures for confidential, anonymous submission of concerns by employees regarding accounting and auditing matters.

(xv)

Establish policies for the hiring of employees and former employees of the outside auditor.

(xvi)

Evaluate annually the performance of the Committee and the adequacy of the Audit Committee Charter.

3.

Meetings. The Audit Committee shall meet as often as may be deemed necessary or appropriate in its judgment, generally four times each year, either in person or telephonically. The Audit Committee shall meet separately, in executive session, periodically, with each of the management and the independent auditors. The Audit Committee may create subcommittees, which shall report to the Audit Committee. The Audit Committee shall report regularly to the full Board of Directors with respect to its activities. The majority of the members of the Audit Committee shall constitute a quorum.

4.

Outside Advisors.  The Audit Committee shall have the authority to retain such outside counsel, experts and other advisors as it determines appropriate to assist it in the full performance of its functions. The Audit Committee shall have sole authority to approve related fees and retention terms and shall receive appropriate funding from the Company, as determined by the Committee, for the payment of fees to any such advisors.

5.

Limit on Non-Audit Services. Beginning in fiscal year 2004, the aggregate fees paid to the Company's outside auditor for permissible non-audit services shall not exceed the aggregate fees paid for audit and related services (including audit fees, audit-related fees and tax compliance and preparation fees) in any fiscal year.


Adopted January 27, 2004