Board Committee Charters

The Audit Committee Charter

A. Purpose 

The Committee shall assist the board of directors in fulfilling its oversight responsibilities for financial reporting, internal control systems, internal audit activities, compliance with key regulatory requirements, and enforcement of the Company’s code of conduct.

B. Authority 

The Committee has the authority to conduct or authorize an investigation into any matter within its scope of responsibility. In this regard, it is empowered to:

• Appoint, compensate, and oversee the work of any registered public accounting and/or auditing firm employed by the Company;

• Retain external counsel, accountants, or other consultants to advise the Committee or assist in the conduct of investigation;

• Seek any information it requires from employees of the Company – all of whom shall be directed to cooperate with the Committee – as well as duly authorized third parties; and

• Confer and consult with Company officers, external auditors, or outside counsel as it deems necessary.

C. Reliance on Functional Working Groups 

In performing its oversight responsibilities, the Committee shall rely primarily on the: (1) Finance & Accounting Group for financial reporting and key financial decisions/transactions; (2) Internal Audit Group for the evaluation of internal control systems and internal audit tasks; and (3) Legal & Regulatory Group for compliance with statutory and other government requirements.

D. Member Qualifications 

The Committee shall be composed of at least three (3) members of the board, one of whom shall be an independent director, and another with audit experience. The Chairman of the board shall designate the chairman of the Committee. The chairman of the Committee shall be an independent director.

1. A Committee member must be literate in financial matters, or can become literate within a reasonable period of time after having been appointed to the Committee. This means that a member should be able to read and understand basic financial statements, such as the Company’s balance sheet, income statement and cash flow statement;

2. Each member must have an adequate understanding of the Company’s financial management systems and environment; and

3. At least one (1) member must have an understanding of generally-accepted accounting principles, experience in analyzing or evaluating financial statements, experience with internal controls, and understanding of audit committee functions.

E. Meetings 

1. The Committee shall meet twice a year at a minimum, with authority to convene additional meetings as may be required.

2. The Committee members are requested to attend every meeting. The Committee shall invite to the meetings members of management, selected representatives from internal and external auditors and/or other functional groups of the Company as may be necessary.

3. The meeting agenda shall be prepared and provided in advance to Committee members, along with appropriate briefing materials. The minutes of the meeting shall be prepared and routed promptly.

F. Duties and Responsibilities 

The members of the Committee shall:

1. Perform the duties and responsibilities outlined in the Company’s Manual on Corporate Governance;

2. Assist the board in the performance of its oversight responsibility for the financial reporting process, internal control system, audit process, and monitoring of compliance with applicable laws, rules and regulations;

3. Perform other tasks and/or activities as may be requested by the board;

4. Provide input and perspective on the Company’s management of credit, market, liquidity, operational, legal and other risks;

5. Monitor and evaluate the adequacy and effectiveness of the Company’s internal control system, including financial reporting control and information technology security;

6. Perform interface functions with the internal and external auditors;

7. Receive and review reports of internal and external auditors and regulatory agencies, where applicable, and ensure that management is taking appropriate corrective actions to address regulatory issues;

8. Review and approve the internal audit plan including audit scope and frequency, and all major changes thereto; and

9. Review and confirm the independence of the internal audit by obtaining statements of independence and objectivity from the internal auditors.