Corporate Governance AUDIT COMMITTEE CHARTER (as amended and restated November 15, 2006) PURPOSE AND ROLE The audit committee (the "Committee") is a committee of the board of directors of the corporation. Its primary function shall be to assist the board in fulfilling oversight of (1) the integrity of the corporation's financial statements, (2) the corporation's compliance with legal and regulatory requirements, (3) the independent accountants' qualifications and independence, and (4) the performance of the corporation's internal audit function and independent accountants. The Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of this charter. The Committee shall, as representatives of the corporation's shareholders, have the ultimate authority and responsibility to appoint, retain, determine funding for, oversee and, where appropriate, replace the independent accountants. The Committee shall also have all authority necessary to fulfill the duties and responsibilities assigned to the Committee in this charter or otherwise assigned to it by the board of directors. he responsibilities of a member of the Committee shall be in addition to such member's duties as a member of the board of directors. The Committee, when appropriate, may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Committee. While the Committee shall have the responsibilities and powers set forth in this charter, it shall not be the duty of the Committee to plan or conduct audits or to determine whether the corporation's financial statements are complete, accurate, or in accordance with generally accepted accounting principles. These are the responsibilities of management and the independent accountants. COMPOSITION The Committee shall be comprised of three or more directors, who shall serve on the committee at the pleasure of the board of directors. The membership of the committee shall meet the independence and financial literacy and experience requirements (or permitted exceptions thereto) of The NASDAQ Stock Market, Inc., as the same may be modified or supplemented, or similar requirements of such other securities exchange or quotation system as may from time to time apply to the corporation. Committee members shall be designated by the full board of directors. Unless a chair is selected by the full board, the members of the Committee may designate a chair by majority vote of the full committee membership. The board may remove any member from the Committee at any time with or without cause. Each Committee member must, at a minimum, be able to read and understand fundamental financial statements, including the corporation's balance sheet, income statement and cash flow statement. At least one Committee member shall have sufficient financial expertise in finance, accounting and auditing so as to be a "financial expert," in accordance with such regulations as may be applicable to the corporation from time to time, through: (a) education and experience as a chief financial officer, principal accounting officer, controller, public accountant or auditor, or experience in one or more positions involving the performance of similar functions; (b) experience actively supervising a chief financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions; (c) experience overseeing or assessing the performance of companies or public accountants regarding the preparation, auditing or evaluation of financial statements; or (d) other relevant experience. No member of the Committee shall serve on more than two audit committees of publicly traded companies other than the corporation at the same time such member serves on this Committee, unless the board of directors determines that such simultaneous service would not impair the ability of such member to effectively serve on this Committee. If a Committee member serves on the audit committees of both a public company and a wholly owned subsidiary of such company, such service shall be counted as service on one audit committee, rather than two. MEETINGS The Committee shall establish a meeting calendar annually, which shall include at least four quarterly meetings for the year. The Committee may hold such other meetings as are necessary or appropriate in order for the Committee to fulfill its responsibilities. The Committee shall also provide minutes of Committee meetings to the board and report Committee actions to the board of directors with such recommendations as the Committee may deem appropriate. RESPONSIBILITIES To fulfill its responsibilities the Committee shall: Documents/Reports Review Review and reassess the adequacy of this charter annually and submit it the board of directors for approval. Review the corporation's annual financial statements and, as necessary or appropriate, any reports or other financial information submitted to governmental bodies or the public, such as certifications, reports, opinions, or reviews rendered by the independent accountants. Review reports to management prepared by external or internal auditors and management's response. When required under generally accepted auditing standards, review with financial management and the independent accountants the corporation's quarterly report on Form 10?Q prior to its filing or prior to the release of earnings. Prepare the report required by the rules of the Securities and Exchange Commission to be included in the corporation's annual proxy statement. Engagement of Independent Accountants Select and retain the independent accountants; determine and approve compensation of the independent accountants; and resolve disagreements between management and the independent accountants. Pre-approve the retention of the independent accountants for all audit and such non-audit services as the independent accountants are permitted to provide the corporation and approve the fees for such services, other than de minimis non-audit services allowed by relevant law. The Committee shall pre-approve services pursuant to its Audit and Non-Audit Services Pre-Approval Policy as the same may be modified or supplemented from time to time. The Committee shall be informed of each service that is pre-approved and no pre-approval shall be delegated to management. In considering whether to pre-approve any non-audit services, the Committee or its delegates shall consider whether the provision of such services is compatible with maintaining the independence of the accountants. Evaluate Independent Accountant Qualifications, Performance and Independence Ensure that the Committee's approval of any audit services is publicly disclosed pursuant to applicable laws, rules and regulations. At least annually, evaluate the independent accountants' qualifications, performance and independence, including that of the lead partner. At least annually, obtain from the independent accountants, and review, a formal written statement delineating all relationships between the independent accountants and the corporation, consistent with Independence Standards Board Standard No. 1. Actively engage in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants, and take, or recommend that the full board of directors take, appropriate action to oversee the independence of the independent accountants. Discuss with the independent accountants the matters required to be discussed by Statement of Auditing Standards ("SAS") No. 61, Communications with Audit Committee, SAS No. 89, Audit Adjustments, and SAS No. 90, Audit Committee Communications, all as amended from time to time, together with any other matters as may be required for public disclosure or otherwise under applicable laws, rules and regulations. Oversee and evaluate the independent accountants and approve any proposed discharge of the independent accountants when circumstances warrant, with the understanding that the independent accountants shall report directly to and be overseen by the Committee. Ensure that the independent accountant's lead partner and reviewing partner are replaced every five years. Financial Reporting Processes Meet with management and the independent accountants to review and discuss the annual audited financial statements and quarterly financial statements, including the corporation's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the report of the independent accountants thereon and to discuss any off-balance sheet structures and significant issues encountered in the course of the audit work, including any restrictions on the scope of activities, access to required information, significant disagreements with management or the adequacy of internal controls. If so determined by the Committee, based on its review and discussion of the audited financial statements with management and the independent accountants, its discussions with the independent accountants regarding the matters required to be discussed by SAS 61, and its discussions regarding the accountants' independence, recommend to the board of directors whether the audited financial statements should be included in the corporation's annual report on Form 10-K. Process Improvement Regularly review with the independent accountants any audit problems or difficulties and management's response, including adjustments noted or proposed by the independent accountants but not taken (as immaterial or otherwise) by management, communications between the audit team and the national office concerning auditing or accounting issues, and any management or internal control letters issued or proposed to be issued by the accountants. Review and discuss with the independent accountants the responsibilities, budget and staffing of the corporation's internal audit function. Obtain and review timely reports from the independent accountants regarding (1) all critical accounting policies and practices to be used, (2) all alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent accountants and (3) other material written communications between the independent accountants and management, such as any management letter or schedule of unadjusted differences. Internal Controls and Legal Matters Review activities, organizational structure, and qualifications of the internal audit department. Review any reports by management regarding the effectiveness of, or any deficiencies in, the design or operation of internal controls and any fraud, whether or not material, that involves management or other employees who have a significant role in the corporation's internal controls. Review any report issued by the corporation's independent accountants regarding the corporation's internal controls. Review and approve or ratify all related-party transactions, including any transactions requiring disclosure under Item 404 of Regulation S-K under the Securities Act of 1934, between the corporation and any of the following persons: (i) a director or senior officer of the corporation, (ii) any nominee for director, (iii) a security holder who owns of record or beneficially more than 5% of any class of the corporation's securities, (iv) a person who is an immediate family member of a person named in (i), (ii) or (iii) above, or (iv) an entity controlled by a person listed in (i), (ii) or (iii) above. Transactions available to all employees generally and/or transactions involving compensation approved, or recommended for approval, by the board compensation committee are excluded from this requirement. Review, with the corporation's counsel, legal compliance matters including corporate securities trading policies. Review, with the corporation's counsel, any legal matter that could have a significant impact on the corporation's financial statements. Develop and monitor compliance with a code of ethics for senior financial officers and with a code of conduct for all corporation employees, officers and directors pursuant to and to the extent required by regulations applicable to the corporation from time to time. Establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters. Establish procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. Other Perform any other activities consistent with this charter, the corporation's by-laws and governing law, as the Committee or the board deems necessary or appropriate.