1. The Committee will instruct management to establish and maintain an adequate internal control structure and procedures for accounting and financial reporting, and to assess the effectiveness of the internal control structure and procedures for financial reporting. The Committee will instruct management to evaluate the system of internal controls on at least a quarterly basis. The Committee will review reports from management prepared quarterly concerning the effectiveness of internal controls, all significant deficiencies in the design or operation of internal controls, any material weaknesses in internal controls, any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal controls, and any significant changes in internal controls or other factors that could affect internal controls subsequent to management’s evaluation, including any corrective actions regarding significant deficiencies and material weaknesses.
   
   
2. The Committee will instruct the Managing Director - Corporate Audit to advise the Committee and the PA, and will instruct the PA to advise the Committee, if there are any areas that require special attention, including any significant deficiencies in the design or operation of the system of internal controls, any material weaknesses in the internal controls, any fraud, whether or not material, involving management or employees who have a significant role in internal controls, any significant changes in internal controls or other factors that could affect internal controls subsequent to management’s evaluation, including any corrective actions regarding significant or any illegal acts by the Corporation, management or employees.
   
   
3. The Committee will meet privately with the Managing Director - Corporate Audit and the PA to review their findings and management’s plans to ensure internal control recommendations made by internal and external auditors have been appropriately implemented by management.
   
   
4. The Committee will review the assessment of risks as described in the Audit Risk Assessment and supporting Annual Audit Plan.
   
   
5. The Committee will review with the Managing Director - Corporate Audit and the PA their integrated Annual Audit Plan, including the degree of coordination and integration between the respective parties. The Committee will inquire as to the extent to which the planned audit scope can be relied upon to detect fraud, non-compliance with State and Federal laws and regulations, non-compliance with SEC and NASD guidelines, or weaknesses in internal accounting and operational controls.
   
   
6. The Committee will discuss with the Managing Director - Corporate Audit and the PA what steps are planned for providing an assessment of strategic, financial, operational and compliance risk management, as well as financial and regulatory reporting.
   
   
7. The Committee will discuss with the Managing Director - Corporate Audit and the PA what steps are planned for a review of the Corporation’s information technology procedures and controls, including computer systems and applications, the security of such systems and applications, the contingency plan for processing data in the event of a systems breakdown, as well as the specific programs to protect against computer fraud or misuse from both within and outside the Corporation.
   
   
8. The Committee will discuss with the Managing Director - Corporate Audit and the PA what steps are planned for review of in-house policies and procedures, and compliance with such policies and procedures, for compliance with regulatory capital requirements and related dividend restrictions, for compliance with the Conflict of Interest and Code of Conduct policies, for compliance with officer travel and entertainment policies, and for compliance with Insider Trading policies by directors, officers and stockholders. The Committee will inquire as to the result of these reviews, and, if appropriate, review a summary of the exceptions identified for the period under review.
   
   
9. The Committee will instruct the Managing Director - Corporate Audit and the PA to advise the Committee when the Corporation seeks a second opinion on a significant accounting issue.
   
   
10. The Committee will meet with the Corporation’s in-house General Counsel and the Corporation’s Director of Risk Management to discuss the Corporation’s risk management policies, procedures and insurance coverage, including director and officer liability, property and casualty loss, errors and omissions, and surety bonds.

Appoint the PA, Determine its Compensation, Oversee its Work and Assess its Performance on an Ongoing Basis.

Review Appointment of Managing Director - Corporate Audit, and Assess His or Her Performance on an Ongoing Basis.

1. The Committee will appoint the PA of the Corporation, will determine the fees paid to the PA and will oversee the work and assess the performance of the PA. The Committee will obtain assessments of the performance of the PA from the Managing Director - Corporate Audit and other appropriate management representatives. Based upon the evaluation of the PA's performance, the Committee will determine whether to retain or replace the PA.
   
   
2. The Committee will instruct the PA to report directly to the Committee.
   
   
3. The Committee will inquire as to the extent to which auditors other than the principal auditors are to be used and understand the rationale for using them. The Committee will request that the work of all auditors be coordinated and the Committee and the Managing Director - Corporate Audit will each perform an appropriate review of their work.
   
   
4. The Committee will discuss with the PA its independence. The Committee will ensure the PA complies with Independence Standard No. 1 and provides to the Committee the disclosures and letter required by such standard. The Committee will be responsible for reviewing any disclosed relationships that may impact the objectivity and independence of the PA. The Committee will be responsible for undertaking appropriate action, if necessary, in response to the PA’s report to satisfy itself of the PA’s independence. The Committee will also review management’s evaluation of the factors related to the independence of the PA.
   
   
5. The Committee will discuss with the PA the matters required to be discussed by SAS 61.
   
   
6. The Committee will review management’s plans for engaging the PA to perform all audit and non-audit services during the year. The engagement of the PA to perform any audit or non-audit services will be subject to the prior approval of the Committee. The Committee will take appropriate actions to ensure that the PA has not been engaged to perform any non-audit services that are prohibited under applicable statutes, rules and regulations. The Committee may delegate to one or more of its members the authority to grant the pre-approval of services, so long as any such approvals are presented to the Committee at its next meeting.
   
   
7. The Committee will review the appointment and any dismissal of the Managing Director - Corporate Audit. The Committee will annually review and approve the performance evaluation of the Managing Director - Corporate Audit after consulting with the Chairman, Chief Executive Officer and the Executive Management Team.

1. The Committee will review and discuss the Corporation’s annual and quarterly financial statements with management in conjunction with the Corporation filing its periodic reports containing such financial statements with the SEC.
   
   
2. The Committee will obtain from management explanations for all significant variances in the financial statements between periods. The Committee will consider whether the data is consistent with the Management’s Discussion and Analysis section of the Annual Report and periodic reports.
   
   
3. The Committee will exercise oversight of the quarterly reporting process prior to the release of quarterly earnings and filing of periodic reports.
   
   
4. The Committee will inquire from management and the PA as to, and request an explanation of, any changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, Securities and Exchange Commission, NASD or other governing bodies and self-regulatory organizations that have an effect on, or oversight of, the financial statements of the Corporation.
   
   
5. The Committee will inquire about the existence and substance of any significant accounting accruals, reserves or estimates made by management that had a material impact on the financial statements.
   
   
6. The Committee will meet regularly with the Corporation’s in-house legal counsel, and outside counsel, when appropriate, to discuss legal matters that may have a significant impact on the financial statements and on risk management.
   
   
7. The Committee will review the significant reports to management prepared by the internal auditing department and management’s responses.
   
   
8. The Committee will review the reports to the Committee prepared by the PA regarding critical accounting policies and practices, alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by the PA, and other material written communications between the PA and management.
   
   
9. The Committee will meet privately with the PA to request its opinion of various matters, including the quality of financial and accounting personnel and the internal audit staff.
   
   
10. The Committee will meet privately with the PA to determine what the PA’s greatest concerns are and if any matters should be discussed with the Committee that have not been raised or covered elsewhere.
    
    
11. The Committee will review the letter(s) of management representations given to the PA and inquire whether the PA encountered any difficulties in obtaining the letter(s) or any specific representations therein.
    
    
12. The Committee will discuss with management and the PA the substance of any significant issues rose by in-house and outside counsel concerning litigation, contingencies, claims or assessments. The Committee will assess the adequacy of the disclosure of such matters in the Corporation’s financial statements and periodic reports.
    
    
13. The Committee will establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and for the confidential and anonymous submission, by employees of the Corporation, of concerns regarding questionable accounting or auditing matters.
    
    
14. The Committee will review the determination by the Corporation’s Director of Corporate Tax of the status of the open years on federal and state income tax returns and whether there are any significant items that have been or might be challenged by the IRS or State(s), and review the status of the related tax reserves.
    
    
15. The Committee will review the section of the annual Proxy Statement describing fees paid to the PA and determine whether the provision of services described in such section is compatible with maintaining the independence of the PA.
    
    
16. The Committee will review with management and the PA the Corporation’s Annual Report and Reports on Form 10-K and Form 10-Q, including the Management’s Discussion and Analysis section of the reports.
    
    
17. The Committee will inquire of management and the PA if there were any significant financial reporting issues discussed during the accounting period reported. The Committee will instruct the PA to advise the Committee of any disagreements between the PA and the Corporation’s management regarding financial reporting issues. The Committee will resolve any such disagreements.
    
    
18. The Committee will instruct the PA to communicate to the Committee any other known matters that require the attention of the Committee or the Board of Directors.
    
    
19. The Committee will consider whether the PA should meet with the Board of Directors to discuss any matters relative to the financial statements and to answer any questions that other directors might have.

1. The committee will, if necessary, institute special investigations and, if appropriate, hire special counsel or experts to assist.
   
   
2. The Committee will recommend to the Board of Directors that the audited financial statements be included in the Annual Report and Report on Form 10-K for the last fiscal year for filing with the Securities and Exchange Commission.
   
   
3. The Committee will review and approve the report required by the Securities and Exchange Commission to be included in the Corporation’s annual Proxy Statement.
   
   
4. The Committee will review any certifications made by management and required to be provided to the Securities and Exchange Commission under applicable rules and regulations.

1. The Committee will report its activities to the Board of Directors on a regular basis so that the Board is kept informed of its activities on a current basis.
   
   
2. The Chairman of the Committee will describe the Committee’s significant activities during the year in a letter to the Board of Directors.
   
   
3. The Committee will review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board of Directors for approval.