Purpose

The Audit Committee will represent and assist the Board of Directors in
fulfilling its oversight responsibility to the shareowners relating to the
integrity of the Company’s financial statements and the financial reporting
process, the systems of internal controls over financial reporting, the annual
independent audit of the Company’s financial statements, the Company’s
compliance with legal and regulatory requirements, and its ethics programs
as established by management and the Board, including the Company’s Code
of Business Conduct. The Committee shall also oversee the independent
auditors’ qualifications and independence. The Committee will evaluate the
performance of the Company’s independent auditors, including a review and
evaluation of the engagement partner. In carrying out its purpose, the
Committee is responsible for acting independently while maintaining free
and open communication with the independent auditors and the Company’s
management. The Committee is also responsible for reviewing and
approving an annual report for inclusion in the Company’s annual proxy
statement.

Committee Membership

The Committee shall be appointed by the Board and shall comprise at least
three directors. Each Committee member shall meet the requirements of the
NASDAQ listing standards, and federal laws and regulations, with respect to
audit committees, as they may become applicable from time to time. No
member may serve on the audit committees of more than three public
companies, unless the Board of Directors shall have affirmatively
determined that the Director will be able to devote sufficient time and
attention to the business of the Committee. Other than the ownership of the
Company’s common and preferred stock, the Committee members may have
no direct or indirect financial relationship whatsoever with the Company
other than the receipt of director’s fees. All Committee members will be
financially literate, and at least one member will meet the definition of
“audit committee financial expert” set forth in the rules and regulations of
the Securities and Exchange Commission (SEC).
The Board will designate a Chairman for the Committee. The Committee
may form and delegate authority to subcommittees if and when appropriate.

Committee Authority and Responsibilities

The primary responsibility of the Committee is to oversee the Company’s
financial controls and reporting processes on behalf of the Board and report
the results of its activities to the Board. Management is responsible for
preparing the Company’s financial statements, and the independent auditors
are responsible for auditing those financial statements. The Committee in
carrying out its responsibilities believes its policies and procedures should
remain flexible, to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall corporate
“tone at the top” for quality financial reporting, sound business risk
practices, and ethical behavior.
The following shall be the principal recurring processes of the Committee in
carrying out its oversight responsibilities. The Committee may perform such
other duties and responsibilities as are consistent with its purpose and as the
Board or the Committee deems appropriate.

  1. Independent Auditors. The Committee shall have a clear understanding
    with management and the independent auditors that the independent auditors
    are ultimately accountable to the Committee and the Board. The Committee
    shall have the sole authority and responsibility to hire, evaluate and, where
    appropriate, replace the independent auditors and, in its capacity as a
    committee of the Board, shall be directly responsible for the appointment,
    compensation and general oversight of the work of the independent
    auditors. The Committee shall discuss the auditors’ qualifications and
    independence from management and the Company, including whether the
    auditors’ performance of permissible non-audit services is compatible with
    their independence. This process will include the Committee’s receipt of a
    report from the independent auditors describing their internal control
    procedures, and any material issues raised by the most recent internal
    quality-control review, or inspections by the Public Company Accounting
    Oversight Board (PCAOB), of the independent auditors, 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 independent auditors, and any steps taken to deal with any such
    issues. Annually, to assess the auditors’ independence, the Committee should
    receive a report from the independent auditors regarding all relationships
    between the independent auditors and the Company, or persons in a financial
    reporting oversight role at the Company that may reasonably be thought to
    bear on independence.
    The Committee will evaluate the performance of the Company’s
    independent auditors, including the audit engagement team, each year and
    determine whether to reengage the current independent auditors or consider
    other audit firms. In doing so, the Committee will consider the quality and
    efficiency of the services provided by the auditors, the auditors’ technical
    expertise and knowledge of the Company’s operations and industry, and any
    other applicable factors the Committee deems appropriate. In connection
    with the mandated rotation of the Independent Auditors’ engagement
    partner, the Audit Committee and its chairperson shall be directly involved
    in the selection of the new engagement partner. As a matter of good
    corporate governance, the Committee shall submit its selection of the
    independent auditors to our shareowners for ratification. If the shareowners
    should not ratify the appointment of the independent auditors, the
    Committee will reconsider the appointment.
  2. Audit Services. The Committee shall discuss with the independent
    auditors the overall scope and plans for their audit, including the adequacy
    of staffing and compensation. The Committee shall approve in advance all
    audit engagement fees and the terms of all audit services to be provided by
    the independent auditors.
  3. Permissible Non-Audit Services; Pre-Approval. The independent auditor
    may not perform non-audit services, unless the Committee approves them in
    advance. The Committee will consider and, if appropriate, give advance
    approvals to specified classes of non-audit services in accordance with
    policies adopted by the Committee.
  4. Review of Interim Financial Statements and Earnings Releases. The
    Committee shall meet with management and the independent auditors before
    the filing of each of the Company’s Quarterly Reports on Form 10-Q to
    review the interim financial statements and the Company’s disclosures in
    Management’s Discussion and Analysis of Financial Condition and Results
    of Operations. The Committee will discuss the Company’s policies and
    procedures with respect to earnings releases and also review financial
    information included in releases. The Committee will discuss the results of
    the quarterly review and any other matters required to be communicated to
    the Committee by the independent auditors under auditing standards
    established from time to time by the PCAOB and by SEC rules.
  5. Review of Annual Audited Financial Statements. The Committee shall
    meet and review with management and the independent auditors the
    financial statements to be included in the Company’s Annual Report on
    Form 10-K (or the annual report to shareowners if distributed prior to the
    filing of the Form 10-K). As part of this review, the Committee will consider
    the clarity of the disclosures in the financial statements and the Company’s
    disclosures under Management’s Discussion and Analysis of Financial
    Condition and Results of Operations, including critical accounting policies.
    The Committee will review and discuss with the independent auditors the
    matters required to be communicated to the Committee by the independent
    auditors under auditing standards established from time to time by the
    PCAOB. These matters will include difficulties, if any, the independent
    auditors encountered in the course of their audit work; restrictions, if any, on
    the scope of the auditors’ activities or on access to requested information,
    and any significant disagreements with management, along with
    management’s response to such difficulties.
    Based on its reviews, the Committee will make a recommendation to the
    Board as to whether the audited financial statements should be included in
    the Company’s Annual Report on Form 10-K.
  6. Risk Oversight. The Committee will oversee risks related to the
    Company’s financial statements, the financial reporting process, and
    accounting and legal matters. The Committee will oversee the Company’s
    ethical compliance programs, including the Company’s Code of Business
    Conduct and the information technology security programs. The Committee
    will periodically receive reports on and discuss governance of the
    Company’s risk management process and will review significant risks and
    exposures identified to the Committee by management or the independent
    auditors (whether financial, operating or otherwise), and management’s
    steps to address them. In connection with its oversight of these matters, the
    Committee members may meet separately with the Company’s legal counsel
    and representatives of the independent auditors.
  7. Internal Controls, Disclosure Controls and Procedures. The Committee
    will discuss with management and the independent auditors the Company’s
    internal controls. The Committee will review and discuss the Company’s
    disclosure controls and procedures, and the assessments of such controls and
    procedures by the Chief Executive Officer and Chief Financial Officer. The
    Committee shall consider issues involving related person transactions with
    the Chief Executive Officer or any holder of 5% or more of the Company’s
    common stock. The Committee shall have the authority to consider for
    approval any such related person transactions and if possible approve such
    transactions before they are entered into, and will periodically review other
    significant related party transactions (as defined by applicable accounting
    standards) identified by management.
  8. Complaint Procedures. The Committee shall establish and oversee
    procedures for handling complaints regarding accounting, internal
    accounting controls, auditing, and federal securities law matters, including
    procedures for confidential, anonymous submission of concerns by
    employees regarding accounting, auditing, and federal securities law
    matters.
  9. Compliance Programs. The Committee shall periodically review and
    discuss with management and the independent auditors the overall adequacy
    and effectiveness of the Company’s legal, regulatory and ethics and
    compliance programs, including the Company’s Code of Business Conduct.
  10. Report for Inclusion in Proxy Statement. The Committee shall review
    and approve the report that SEC rules require to be included in the
    Company’s annual proxy statement.
  11. Hiring of Auditor Personnel. The Committee shall review and have final
    approval over management’s hiring of any current or former partners and
    employees of the independent auditors.
  12. Charter. The Committee shall periodically review and reassess the
    adequacy of this Charter and recommend any proposed changes to the Board
    for approval.
  13. Annual Performance Evaluation. The Committee shall periodically
    review its own performance.
  14. Investigative Authority. In discharging its oversight role, the Committee
    is empowered to investigate any matter brought to its attention with full
    access to all books, records, facilities and personnel of the Company.

Outside Advisors

The Committee shall have the authority to retain outside counsel,
accountants, experts and other advisors, as it deems appropriate, to assist the
Committee in performing its functions. The Committee shall be provided
with appropriate funding, as determined by the Committee, for payment of
compensation to such outside counsel, accountants, experts and other
advisors.

Meetings

The Committee will meet at least quarterly each year, and more frequently,
when and where the Committee deems necessary or appropriate. The
majority of the members of the Committee shall constitute a quorum. The
Committee will meet separately, at least quarterly, with the independent
auditors and senior management to discuss any matters that they wish to
bring to the Committee’s attention or that the Committee wishes to bring to
their attention.
The Committee shall report to the Board with respect to its meetings,
including any significant issues that arise regarding the quality or integrity of
the Company’s financial statements, the Company’s compliance with legal or
regulatory requirements or the performance and independence of the
Company’s independent auditors.