AUDIT COMMITTEE CHARTER
ORGANIZATION
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This charter governs the operations of the Audit Committee. The Committee
shall review and reassess the charter at least annually and obtain the
approval of the Board of Directors. The Committee shall be appointed by the
Board of Directors and shall comprise at least three directors, each of whom
are independent of management and the Company. All Committee members shall be
financially literate, (or shall become financially literate within a
reasonable period of time after appointment to the Committee,) and at least
one member shall have accounting or related financial management expertise.
A majority of the Audit Committee shall constitute a quorum, and the
action of a majority of members of the Audit Committee present at any meeting
at which a quorum is present, or acts unanimously adopted in writing without
holding of a meeting, shall be acts of the Committee. The Committee shall
decide what reports of its meetings, actions and recommendations are to be
made to the Board of Directors, and shall make such reports. The Audit
Committee shall meet at any time and from time to time, when as determined in
its discretion. The Audit Committee may ask members of management or others to
attend any meeting and provide pertinent information as necessary.
STATEMENT OF POLICY
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The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the Board. In
so doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, and management of
the Company. 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 and the power to retain
outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
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The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of their 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, in order to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.
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The following shall be the principal recurring processes of the Audit
Committee in carrying out its oversight responsibilities. The processes are
set forth as a guide with the understanding that the Committee may supplement
them as appropriate.
- The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Audit Committee, as representatives of
the Company's shareholders. The Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The Committee shall discuss with the auditors
their independence from management and the Company and the matters
included in the written disclosures required by the Independence
Standards Board. Annually, the Committee shall review and recommend to
the Board the selection of the Company's independent auditors, subject
to shareholders' approval.
- The Committee shall discuss with the independent auditors the overall
scope and plans for their respective audits including the adequacy of
staffing and compensation. Also, the Committee shall discuss with
management and the independent auditors the adequacy and effectiveness
of the accounting and financial controls, including the Company's system
to monitor and manage business risk, and legal and ethical compliance
programs. Further, the Committee shall meet with the independent
auditors, with and without management present, to discuss the results of
their examinations.
- The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent auditors
under generally accepted auditing standards. The chair of the Committee
may represent the entire Committee for the purposes of this review.
- The Committee shall 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 shareholders if distributed prior
to the filing of Form 10-K), including their judgement about the
quality, not just acceptability, of accounting principles, the
reasonableness of significant judgements, and the clarity of the
disclosures in the financial statements. Also, the Committee shall
discuss the results of the annual audit and any other matters required
to be communicated to the Committee by the independent auditors under
generally accepted auditing standards.
The Audit Committee may take any action which the full Board of Directors
might take with respect to:
- Reports requiring approval by the Board of Directors before submission to
the SEC or other government agencies.
- The Company's accounting policies and policy decisions.
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- Reports from management and the independent accountant assessing the
impact of significant regulatory changes and accounting or reporting
developments proposed by the Financial Accounting Standards Board or the
SEC, or any other significant developments that may have an impact on
matters within the scope of the Board of Directors' or Audit Committee's
authority.
Date Adopted: May 24, 2000 (replacing charter of April 8, 1998)
