The Audit Committee shall consist of at least three members of the Board of Directors, each of whom (i) is "independent" under the listing standards of The Nasdaq Stock Market and the applicable rules and regulations of the SEC, (ii) does not accept any consulting, advisory or other compensatory fee from the Company other than in his or her capacity as a member of the Board or any committee of the Board, (iii) is not an affiliate of the Company and does not own or control 10% or more of the Company's voting securities, or such lower measurement as may be established by the SEC, and (iv) has not participated in the preparation of the financial statements of the Company or any subsidiary at any time during the past three years. All members of the Audit Committee must be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement, and at least one member of the Audit Committee must be financially sophisticated under the rules of The Nasdaq Stock Market. The Audit Committee shall determine whether at least one member is an "audit committee financial expert," as defined by Item 407(d)(5) of SEC Regulation S-K, as it may be modified or supplemented. The determination by the Audit Committee that a person is an audit committee financial expert will not impose on such person individually, on the Audit Committee or on the Board as a whole any greater duties, obligations or liability than would exist in the absence of such determination.
The members of the Audit Committee shall be appointed by the Board based upon nominations by the Company's Corporate Governance and Nominating Committee. The members of the Audit Committee will be appointed by and serve at the discretion of the Board. The Audit Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee or any member of the Audit Committee. Without limiting the generality of the foregoing, the Audit Committee may, in its discretion, delegate to one or more of its members the authority to pre-approve any audit or non-audit services to be performed by the independent auditors, provided that any such approvals are presented to the Audit Committee at its next scheduled meeting.
No Audit Committee member may receive any compensation from the Company other than (i) directors fees, which may be received in cash, stock options or other in-kind consideration ordinarily available to directors, (ii) a pension or other deferred compensation for prior service that is not contingent on future service, and (iii) any other regular benefits that other directors receive. No director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies unless the Board determines that such simultaneous service would not impair the ability of the director to effectively serve on the Audit Committee.