Audit Committee Charter

Adopted June 2003


The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities relating to (1) the quality and integrity of the financial reports of the Company, (2) the independent auditor's qualifications and independence, and (3) the performance of the Company's internal audit function and independent auditors. Consistent with these functions, the Committee should encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible, in order to best react to changing circumstances while ensuring that the Company's accounting and reporting practices are in accordance with all requirements and are all of the highest quality.


Members of the Signature Eyewear Audit Committee pledge to:

      1. Provide shareholders full and accurate financial information on the company.

      2. Probe for disagreements between auditors and management.

      3. Ensure that the most accurate and reasonable accounting practices are employed, not aggressive or potentially misleading accounting methods.


The Committee's primary duties and responsibilities are to:

      1. Serve as an independent and objective party to monitor the Company's financial reporting process and internal control system.

      2. Review and appraise the audit efforts of the Company's independent accountants and internal audit function.

      3. Provide an open avenue of communication among the independent accountants, internal auditors, the Company's operational management and the Board.

The Committee shall provide assistance to the Board in fulfilling the Board's oversight responsibility relating to the Company's financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function, the annual independent audit of the Company's financial statements and the ethics programs as established by Management and the Board. In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of the Company.

The Committee will fulfill these responsibilities by carrying out the activities enumerated in Part VI of this Charter. The Committee may augment the activities defined by Part VI at its discretion.


The Committee shall be comprised of 2 Directors. Each member of the Committee must be an "independent" Director, and free from any 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. For purposes hereof, "independent" director shall mean a director who meets the National Association of Securities Dealers, Inc. definition of "independent" director.

Each member of the Committee must be financially literate and able to read and understand fundamental financial statements, including the Company's balance sheet, income statement and cash flow statement (or will become able to do so in a reasonable period of time after his or her appointment to the Committee), and at least one member of the Committee must be an "Audit Committee Financial Expert" as defined by the Securities and Exchange Commission.

The members of the Committee shall be elected by the Board and shall serve at the pleasure of the Board. The Board may replace Committee members or reconstitute the Committee at any time. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee members.


The Committee shall meet at least four times annually, or more frequently as circumstances dictate. A majority of the members of the Committee shall constitute a quorum. As part of its job to foster open communication, the Committee should meet at least annually with Management and the independent auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. The Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or meet with any members of, or consultants to, the Committee.

Meetings shall be held when called by any member of the Committee or otherwise as provided by the Bylaws, the call to be communicated orally or in writing to each member of the Committee at least 48 hours before the hour fixed for the meeting; the call shall be directed to each such person at his business address if during regular business hours, or to each such person's residence if not during regular business hours. All waivers of notice of meetings, consents to holding of meetings or written approvals of actions taken at meetings shall be made part of the minutes of the meetings.

Minutes shall be kept of all meetings of the Committee.


The Committee shall:

      1. Have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareholder ratification) and be directly responsible for the compensation of the independent auditor;

      2. Be directly responsible for the oversight of the work of the independent auditor (who shall report directly to the Committee) for the purpose of preparing or issuing an audit report or related work;

      3. Pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act which are approved by the Committee prior to completion of the audit; the Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its next scheduled meeting;

      4. Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor¬ís internal quality control procedures, (b) any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company;

      5. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, taking into account the opinions of management;

      6. Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit;

      7. Review and discuss with Management and the independent auditor the Company's annual financial statements, including management's discussion and analysis, and any reports or other financial information submitted to any governmental body, or the public, including any certification, report, opinion or review rendered by the independent auditor, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K;

      8. Review and discuss with Management and the independent auditor the Company¬ís quarterly financial statements prior to the filing of its Form 10-Q, or prior to the release of earnings;

      9. Discuss with Management the Company's earnings press releases, including the use of any "pro forma" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies;

      10. Review with the independent auditor the auditor's judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting and review and resolve any significant disagreements between the independent auditor and Management in connection with the preparation of the financial statements;

      11. Discuss with Management and the independent auditor, together and in separate executive sessions, significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including the critical accounting policies used by the Company, any significant changes in the Company's selection or application of accounting principles, alternative accounting principles used which could be used by the Company, any major issues as to the adequacy of the Company's internal controls or financial reporting processes and any special steps adopted in light of material deficiencies;

      12. Discuss separately with the independent auditor and Management (as required by Statement on Auditing Standard No. 61) matters relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of the activities or access to requested information, and any significant disagreements between the independent auditor and Management;

      13. Discuss with Management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements;

      14. Periodically review with the independent auditors and financial and accounting personnel, the adequacy and effectiveness of the accounting and financial controls and reporting processes of the Company, and elicit any recommendations offered for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions or procedures that might be deemed illegal or otherwise improper;

      15. Review Company policy statements to determine their adherence to the Company's Code of Ethics, as and when adopted by the Board;

      16. Discuss with Management and the independent auditor the Company's major financial risk exposures (including potential or pending litigation) and steps Management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies;

      17. Establish procedures for the confidential, anonymous submission of employee concerns regarding questionable accounting practices, internal controls, auditing matters or other company issues and for receiving, retaining and addressing complaints concerning them;

      18. Have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors, and the Company shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Committee;

      19. Review and update this Charter periodically, at least annually, as conditions dictate;

      20. Prepare any report to the Company's shareholders required by the SEC for inclusion in the Company's annual proxy statement.


While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with GAAP and applicable rules and regulations.

Management is responsible for the preparation, presentation and integrity of the Company's financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Company.

The independent auditors are responsible for auditing the Company's financial statements and for reviewing the Company's unaudited interim financial statements.