Exhibit 99.1
Charter of the Audit Committee of the Board of Directors
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors
to assist the Board in fulfilling its oversight
responsibilities. The Audit Committee's primary duties and
responsibilities are to:
- Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
- Monitor the independence and performance of the Company's
independent auditors and internal auditing department.
- Provide an avenue of communication among the independent
auditors, management, the internal auditing department, and the
Board of Directors.
The Audit Committee has the authority to conduct any
investigation appropriate to fulfilling its
responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization.
The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other
consultants or experts it deems necessary in the performance
of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the
NASDAQ stock Exchange. The Audit Committee shall be
comprised of three or more directors as determined by the
Board, each of whom shall be independent nonexecutive
directors, free from any relationship that would interfere
with the exercise of his or her independent judgment. All
members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of
the Committee shall be designated as a "financial expert" as
defined by the SEC.
Audit Committee members shall be appointed by the Board. If
an audit committee Chair is not designated or present, the
members of the Committee may designate a Chair by majority
vote of the Committee membership.
The Committee shall meet at least two times annually, or
more frequently as circumstances dictate. The Audit
Committee Chair shall prepare and/or approve an agenda in
advance of each meeting. The Committee should meet privately
in executive session at least annually with management, the
independent auditors, and as a committee to discuss any
matters that the Committee or each of these groups believe
should be discussed. In addition, the Committee, or at least
its Chair, should communicate with management and the
independent auditors quarterly to review the Company's
financial statements and significant findings based upon the
auditors limited review procedures.
III. Audit Committee Responsibilities and Duties
Review Procedures
1.Review and reassess the adequacy of this Charter at least
annually. Submit the charter to the Board of Directors
for approval and have the document published at least
every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements
prior to filing or distribution. Review should include
discussion with management and independent auditors of
significant issues regarding accounting principles, practices,
and judgments.
3.In consultation with the management and the independent
auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss
significant financial risk exposures and the steps
management has taken to monitor, control, and report such
exposures. Review significant findings prepared by the
independent auditors and the internal auditing department
together with management's responses.
4. Review and approve all related party transactions of the
Company.
5. Review the Company's code of business conduct and ethics to
ensure that it is adequate and up to date.
6. Review procedures for the confidential and/or anonymous
submission by employees or others of concerns regarding
questionable accounting or auditing matters.
7. Review with financial management and the independent
auditors the company's quarterly financial results prior to the
release of earnings and/or the company's quarterly financial
statements prior to filing or distribution. Discuss any
significant changes to the Company's accounting principles and
any items required to be communicated by the independent auditors
in accordance with SAS 61 (see item 9). The Chair of the
Committee may represent the entire Audit Committee for purposes
of this review.
Independent Auditors
8. The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit Committee
shall review the independence and performance of the auditors and
annually recommend to the Board of Directors the appointment of
the independent auditors or approve any discharge of auditors
when circumstances warrant.
9. Approve the fees and other significant compensation to be
paid to the independent auditors.
10. On an annual basis, the Committee should review and discuss
with the independent auditors all significant relationships they
have with the Company that could impair the auditors'
independence.
11. Review the independent auditors audit plan - discuss scope,
staffing, locations, reliance upon management, and internal audit
and general audit approach.
12. Prior to releasing the year-end earnings, discuss the
results of the audit with the independent auditors. Discuss
certain matters required to be communicated to audit committees
in accordance with AICPA SAS 61.
13. Consider the independent auditors' judgments about the
quality and appropriateness of the Company's accounting
principles as applied in its financial reporting.
Legal Compliance
14. On at least an annual basis, review with the Company's
counsel, any legal matters that could have a significant impact
on the organization's financial statements, the Company's
compliance with applicable laws and regulations, and inquiries
received from regulators or governmental agencies.
Other Audit Committee Responsibilities
15. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be
included in the Company's annual report.
16. Perform any other activities consistent with this Charter,
the Company's by-laws, and governing law, as the Committee or the
Board deems necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of the foregoing
activities.