A.

Shall be Independent Directors as defined under NASDAQ Rule 5605(a)(2), and free from any material relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee;

B.

Shall satisfy the independence requirements of Rule 10A-3(b)(1) of the Securities and Exchange Act of 1934 (the “Act”) as such requirements are interpreted by the Board and its business judgment.

C.

Shall be able to read and understand fundamental financial statements, including balance sheets, income statements, and cash flow statements, as required by NASDAQ Rule 5605(c)(2); and

D.

Shall not have participated in the preparation of the financial statements of the Company or any current subsidiary at any time during the preceding three years

E.

Shall not accept any consulting, advisory, or other compensatory fee from the Company or any subsidiary of the Company, other than in his or her capacity as a member of the Committee, Board or any other Board committee, and they must not be an affiliated person of the Company or any subsidiary of the Company, as such term is defined in Rule 10A-3(e)(1) of the Act.

A.

Action may be taken by the Committee upon the affirmative vote of a majority of the members present at a meeting if a majority of Committee members are present, as determined in accordance with the Company’s bylaws;

B.

Any two members, the Chairman of the Committee or the Chairman of the Board and/or the Chief Executive Officer of the Company may call a meeting of the Committee whenever they deem such meeting to be necessary;

C.

Action may be taken by the Committee without a meeting if all of the members of the Committee indicate their approval thereof in writing; and

D.

The Committee may invite any Director who is not a member of the Committee, or any officer, employee, counsel, representative of service providers or other persons to attend meetings and provide information as the Committee, as determined appropriate by the Committee.

A.

Evaluating annually the appointment, compensation and retention of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company and its subsidiaries, including resolution of disagreements between management and the independent auditor regarding financial reporting;

B.

Pre-approving any independent auditors’ engagement to render audit and/or permissible non-audit services (including the fees charged and proposed to be charged by the independent auditors);

C.

Receiving formal written statements, at least annually, from the independent auditor regarding the auditor’s independence, including a delineation of all relationships between the auditor and the Company; actively engaging in discussions with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditor, addressing at least the matters required by applicable requirements of the Public Company Accounting Oversight Board); taking or recommending that the Board take appropriate action to oversee the independence of the outside auditor;

D.

Obtaining and reviewing at least annually a report from the independent auditor detailing the firm’s internal quality control procedures, any material issues raised by the independent auditor’s internal quality control review, peer review or any governmental or other professional inquiry performed within the past five years and any remedial actions implemented by the firm and all relationships between the independent auditor and the Company;

E.

Obtaining from the independent auditors annually a formal written statement of the fees billed in the last fiscal year for each of the following categories of services rendered by the independent auditors:

(i)

the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s quarterly reports or services that are normally provided by the independent auditors in connection with statutory or regulatory filings or engagements;

(ii)

services that are reasonably related to the performance of the audit or review of the Company’s financial statements, in the aggregate and by each service;

(iii)

tax compliance, tax advice and tax planning services, in the aggregate and by each service; and

(iv)

all other products and services rendered by the independent auditors in the aggregate and by each service; and

F.

Monitoring the rotation of the lead (or coordinating) audit partner (or other employees of the independent auditor if required by SEC rules and regulations) having primary responsibility for the audit and the audit partner responsible for reviewing the audit.

G.

Considering the effect on the Company of:

(i)

any changes in accounting principles or practices proposed by management or the independent auditors; and

(ii)

any changes in service providers, such as the accountants, that could impact the Company’s internal control over financial reporting; and

H.

Evaluating the efficiency and appropriateness of the services provided by the independent auditors, including any significant difficulties with the audit or any restrictions on the scope of their activities or access to required records, data and information;

I.

Interacting with the independent auditors, including reviewing and, where necessary, resolving any problems or difficulties the independent auditors may have encountered in connection with the annual audit or otherwise, any management letters provided to the Committee and the Company’s responses (any such review shall address any difficulties encountered in the course of the audit work, including any restrictions on the scope of the activities or access to required information, any disagreements that have arisen between management and the independent auditors regarding financial reporting); and

J.

Reviewing with the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.

The Committee may delegate its pre-approval responsibilities to a sub-committee consisting of one or more of its members. The member(s) to whom such responsibility is delegated sub-committee must report, for informational purposes only, any pre-approval decisions to the Committee at its next scheduled meeting.

A.

Reviewing with independent auditor the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation. Review with independent auditor any difficulties with audits and management’s response;

B.

Meeting with the Company’s independent auditors at least four times during each fiscal year, including private meetings, and review written materials prepared by the independent auditors, as appropriate. At these meetings, the Committee shall:

(i)

review the arrangements for and the scope of the annual audit and any special audits or other special permissible services;

(ii)

review the Company’s financial statements and discuss any matters of concern arising in connection with audits of such financial statements including any adjustments to such statements recommended by the independent auditors or any other results of the audits;

(iii)

consider and review, as appropriate and in consultation with the independent auditors, the appropriateness and adequacy of the Company’s financial reporting and, as appropriate, the internal controls of key services providers, and review management’s responses to the independent auditors’ comments relating to those policies, procedures and controls, and take any necessary action in light of significant and material control deficiencies;

(iv)

review with the independent auditors their opinions as to the fairness of the financial statements;

(v)

review and discuss quarterly reports from the independent auditors relating to: (a) all critical accounting policies and practices to be used; (b) 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 auditors; and (c) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences; and

(vi)

prepare the report required by the SEC to be included in the Company’s public filings and annual proxy statement; and

C.

Reviewing and discussing with management and the independent auditor the Company’s system of internal controls (including any significant deficiencies in the design or operation of those controls which could adversely affect the Company’s ability to record, process, summarize and report financial data, its financial and critical accounting practices, and policies relating to risk assessment and management;

D.

Receiving and reviewing reports of the independent auditor discussing (1) all critical accounting policies and practices to be used in the firm’s audit of the Company’s financial statements, (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 auditor, and (3) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences;

E.

Reviewing and discussing with management and the independent auditor the Company’s annual and quarterly financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” prior to the filing of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; discussing results of the annual audit and quarterly review and any other matters required to be communicated to the Committee by the independent auditor under generally accepted auditing standards; discussing with management and the independent auditor their judgment about the quality of accounting principles, the reasonableness of significant judgments, including a description of any transactions as to which the management obtained Statement on Auditing Standards No. 50 letters, and the clarity of disclosures in the financial statements, including the Company’s disclosures of critical accounting policies and other disclosures and recommend to the Board whether to include the audited financial statements in the 10K;

F.

Discussing the Company’s earnings press releases, if any, as well as the nature of financial information provided to analysts and rating agencies;

G.

Reviewing material pending legal proceedings involving the Company and other contingent liabilities;

H.

Meeting separately with the management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors to discuss results of examinations of the Company’s internal controls and procedures, including receiving from the Chief Executive Officer and Chief Financial Officer of the Company a report of all significant deficiencies and material weaknesses in the design or operation of internal controls, and any fraud that involves management or other employees who have a significant role in the Company’s internal controls;

I.

Discussing with the independent auditors the matters required to be communicated to the Audit Committee in accordance with Statement on Auditing Standards No. 61;

J.

Establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees, consultants or contractors of the Company of concerns regarding questionable accounting or accounting matters;

K.

Reviewing or establishing standards for the type of information and the type of presentation of such information to be included in earnings press releases, financial information and earnings guidance provided to analysts, if any, and rating agencies.

L.

Reviewing with the independent auditor any significant audit problems or difficulties and management’s response; and

M.

Setting hiring policies, if required, relating to the Company’s hiring of employees or former employees of the independent auditors.

A.

Producing a Committee report for inclusion in the Company’s annual report on Form 10K or proxy statement for the annual meeting of shareholders;

B.

Reviewing and assessing periodically the adequacy of this Charter and submit any proposed amendments to the Charter to the Board for approval;

C.

Reporting regularly its recommendations to the Board and performing annually, or participating in, an evaluation of the Committee, the results of which shall be presented to the Board;

D.

Reviewing such other matters as the Board or the Committee shall deem appropriate; and

E.

Determining funding necessary for ordinary administrative expenses that are necessary or appropriate in carrying out the Committee’s duties.