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Purpose

The purpose of the committee shall be to assist the Board in its oversight of the integrity of the financial statements of the Company and the financial reporting process, the systems of internal accounting and financial controls, of the Company's compliance with legal and regulatory requirements, of the independence and qualifications of the independent auditor, and of the performance of the Company's independent auditors. In so doing, it is the responsibility of the committee to maintain free and open communication between the committee, independent auditors, the internal auditors and management of the Company.

The committee shall have the following authority and responsibilities:

1. To discuss with management and with the independent auditor the annual audited financial statements and quarterly financial statements, including matters required to be reviewed under applicable legal, regulatory or NASDAQ requirements.
2. To recommend for shareholder approval the independent auditor to examine the company's accounts, controls and financial statements. The committee shall have the sole authority and responsibility to select, evaluate and, if necessary, replace the independent auditor. The committee shall have the sole authority to approve all audit engagement fees and terms and the committee, or a member of the committee, must pre-approve any non-audit service provided to the Company by the Company's independent auditor.
3. To discuss with management and the independent auditor, as appropriate, any audit problems or difficulties and management's response, and the Company's risk assessment and risk management policies, including the Company's major financial risk exposure and steps taken by management to monitor and mitigate such exposure.
4. To review the Company's financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application and the key accounting decisions affecting the Company's financial statements, including alternatives to, and the rationale for, the decisions made.
5. To obtain and review at least annually a formal written report from the independent auditor delineating: the auditing firm's internal quality-control procedures and any material issues raised within the preceding five years by the auditing firm's internal quality-control reviews, by peer reviews of the firm or by any governmental or other inquiry or investigation relating to any audit conducted by the firm. The committee will also review steps taken by the auditing firm to address any findings in any of the foregoing reviews. Also, in order to assess auditor independence, the committee will review at least annually all relationships between the independent auditor and the Company.
6. To prepare and publish an annual committee report in the Company's proxy statement.
7. To set policies for the hiring of employees or former employees of the Company's independent auditor.
8. To review and investigate any matters pertaining to the integrity of management, including conflicts of interest or adherence to standards of business conduct as required in the policies of the company. This should include regular reviews of the compliance processes in general and the corporate ombudsman process in particular. In connection with these reviews, the committee will meet, as deemed appropriate, with the general counsel and other company officers or employees.

The committee shall meet separately at least quarterly with management and annually with the Company's independent auditors.

The committee shall have authority to retain such outside counsel, experts and other advisors, as the committee may deem appropriate in its sole discretion. The committee shall have sole authority to approve related fees and retention terms.

The committee shall report its recommendations to the board after each committee meeting and shall conduct and present to the Board an annual performance evaluation of the committee. The committee shall review at least annually the adequacy of this charter and recommend any proposed changes to the board for approval.
Audit Committee: key practices

The audit committee has adopted the following key practices to assist it in undertaking the functions and responsibilities set forth in its charter:

1. Meetings. The committee will meet as often as may be deemed necessary or appropriate in its judgment, at least quarterly each year, and at such times and places as the committee shall determine. The majority of the members of the committee shall constitute a quorum.
2. Review of financial statements. The committee will review the company's 10-K in detail with the CEO, the CFO and the full Board. The committee will meet to review the company's 10-Qs with the CFO.
3. Quarterly review of CEO and CFO certification process. In conjunction with its reviews of the 10-Ks and 10-Qs, the committee will also review the process for the CEO and CFO quarterly certifications required by the SEC with respect to the financial statements and the Company's disclosure and internal controls, including any material changes or deficiencies in such controls.
4. Approval of audit and non-audit services. In addition to approving the engagement of the independent auditor to audit the Company's consolidated financial statements, the committee will approve all use of the Company's independent auditor for non-audit services prior to any such engagement. To minimize relationships which could appear to impair the objectivity of the independent auditor, it is the committee's practice to restrict the non-audit services that may be provided to the Company by the Company's independent auditor primarily to tax services and merger and acquisition due diligence and integration services. The Company will obtain such limited non-audit services from the company's auditor only when the services offered by the auditor's firm are more effective or economical than services available from other providers, and, to the extent possible, only following competitive bidding for such services.
5. Hiring guidelines for independent auditor employees. The committee has adopted the following practices regarding the hiring by the Company of any partner, director, manager, staff, advising member of the department of professional practice, reviewing actuary, reviewing tax professional and any other persons having responsibility for providing audit assurance to the Company's independent auditor on any aspect of their certification of the Company's financial statements. "Audit assurance" includes all work that results in the expression of an opinion on financial statements, including audits of statutory accounts.
   a. No member of the audit team can be hired by ASI for a period of two years following association with that audit
   b. No former employee of the independent auditor may sign an ASI SEC filing for five years following employment with the independent auditor
   c. No former employee of the independent auditor may be named an ASI officer for three years following employment by the independent auditor.
6. Process for handling complaints about accounting matters. As part of the Board's procedure for receiving and handling complaints or concerns about the Company's conduct, the committee has established the following procedures for: (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (ii) the confidential, anonymous submission by ADO employees of concerns regarding questionable accounting or auditing matters.
   a. ASI will establish and publish on its website a telephone number for receiving complaints regarding accounting, internal accounting controls or auditing matters. The phone number will be a direct line to the chairman of the audit committee. The chairman will send a record of all such complaints to members of the audit committee.
   b. All complaints will be tracked on a separate Board of Directors' ombuds docket, but handled by the Company's ombuds, finance and legal staffs in the normal manner, except as the audit committee may request.
   c. The status of the specially docketed complaints will be reported on a quarterly basis to the committee and, if the committee so directs, to the full Board.
   d. The committee may request special treatment, including the retention of outside counsel or other advisors, for any complaint addressed to it.
7. Integrity concerns. The Company's Code of Ethics prohibits any officer or manager from retaliating or taking any adverse action against anyone for raising or helping to resolve an integrity concern.
8. Audit committee memberships. The committee has determined that in view of the increasing demands and responsibilities of the audit committee, members of the committee should not serve on more than three additional audit committees of other public companies, and the chair of the committee should not serve on more than two other audit committees of a public company. Existing relationships exceeding these limits may continue in place provided that the full board of directors determines that such relationships do not impair the member's ability to serve effectively on the committee.
9. Member with financial expertise. The committee will be composed of members that are able to read and understand financial statements. One member will be a financial expert, with past employment in finance or accounting, requisite professional certification in accounting or any other comparable experience or background with which resulted in such individual’s sophistication. Such similar experience shall be deemed to include a background in investment banking.
10. Audit partner rotation. The committee shall ensure that the lead audit partners assigned by the Company's independent auditor to the Company, and to each of its subsidiaries that have securities registered with the SEC, as well as the audit partner responsible for reviewing the Company's audit shall be changed at least every five years.
11. Shareholder ratification of independent auditor. Although the committee has the sole authority to appoint the independent auditor, the committee will recommend that the board ask the shareowners, at their annual meeting, to approve the committee's selection of independent auditor.