**EXHIBIT99.1(2)**

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**PHAZARCORP**

**AuditCommittee Charter**

**June13, 2000**

**RevisedJuly 21, 2010**

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**Purpose**

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The AuditCommittee is appointed by the Board to assist the Board in monitoring (1) theintegrity of the financial statements of the Company, (2) the Company’saccounting and financial reporting processes and financial statement audits,(3) the independent auditor’s qualifications and independence, (4) the performanceof the Company’s internal audit function and independent auditors, and (5) thecompliance by the Company with legal and regulatory requirements.

 

The AuditCommittee shall prepare the report required by the rules of the Securities andExchange Commission (the “Commission”) to be included in the Company’s annualproxy statement.  

 

The audit committee has the authority to conductinvestigations into any matters within its scope of responsibility and obtainadvice and assistance from outside legal, accounting, or other advisors, asnecessary, to perform its duties and responsibilities.

 

In carrying out its duties and responsibilities, the auditcommittee shall also have the authority to meet with and seek any informationit requires from employees, officers, directors, or external parties. Thecompany will provide appropriate funding, as determined by the audit committee,for compensation to the independent auditor, to any advisers that the auditcommittee chooses to engage, and for payment of ordinary administrativeexpenses of the audit committee that are necessary or appropriate in carryingout its duties.

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**CommitteeMembership**

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The AuditCommittee shall consist of no fewer than three members. The members of theAudit Committee shall meet the independence and experience requirements ofNASDAQ Rule 5605 and Section 10A(m)(3) of the Securities Exchange Act of 1934(the “Exchange Act”) and the rules and regulations of the Commission. At leastone member of the Audit Committee shall be an “audit committee financialexpert” as defined by the Commission in Regulation S-K Item 405(d)(5). AuditCommittee members shall not simultaneously serve on the audit committees ofmore than two other public companies. The members of the Audit Committee shallbe appointed by the Board. Audit Committee members may be replaced by theBoard.

 

**Meetings**

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The AuditCommittee shall meet as often as it determines, but not less frequently thanquarterly. The Audit Committee shall meet periodically with management, theinternal auditors and the independent auditor in separate executive sessions.The Audit Committee may request any officer or employee of the Company or theCompany’s outside counselor independent auditor to attend a meeting of theCommittee or to meet with any members of, or consultants to, the Committee.

 

**CommitteeAuthority and Responsibilities**

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The AuditCommittee shall have the sole authority to appoint, review and replace theindependent auditor (subject, if applicable, to shareholder ratification). TheAudit Committee shall be directly responsible for the compensation andoversight of the work of the independent auditor (including resolution ofdisagreements between  management and the independent auditor regardingfinancial reporting) for the purpose of preparing or issuing an audit report,making quarterly reviews, or related work and for the purpose of performance ofpermitted non-audit services. The independent auditor shall report directly tothe Audit Committee. 

 

The AuditCommittee shall pre-approve all auditing services and permitted non-auditservices to be performed for the Company by its independent auditor, asrequired by Sections 201 and 202 of the Sarbanes-Oxley Act of 2002. Inconsidering such preapproval, the Audit Committee shall consider whether such non-auditservices are compatible

 

 

with theauditor’s independence.  The Audit Committee may delegate to one or more of itsmembers authority to grant such pre-approvals, including the authority to grantpreapprovals of audit and permitted non-audit services, provided that anydecision of such Audit Committee member to grant a preapproval shall bepresented to the full Audit Committee at its next scheduled meeting.

 

The AuditCommittee shall have the authority, to the extent it deems necessary orappropriate, to retain independent legal, accounting or other advisors. TheCompany shall provide for appropriate funding, as determined by the AuditCommittee, for payment of compensation to the independent auditor for thepurpose of rendering or issuing an audit report and to any advisors employed bythe Audit Committee.

 

The AuditCommittee shall make regular reports to the Board. The Audit Committee shallreview and reassess the adequacy of this Charter annually and recommend anyproposed changes to the Board for approval. The Audit Committee shall annuallyreview the Audit Committee’s own performance. 

 

The AuditCommittee, to the extent it deems necessary or appropriate, shall:

 

**FinancialStatement and Disclosure Matters**

 
    - Review     the independent auditor’s report on the company’s assessment of internal     controls over financial reporting.

 
    - Review and     discuss with management and the independent auditor the annual audited     financial statements, including disclosures made in management’s     discussion and analysis and any requested changes, and recommend to the     Board whether the audited financial statements should be included in the     Company’s Form 10-K.

 
    - Review and     discuss with management and the independent auditor the Company’s     quarterly financial statements prior to the filing of its Form 10-Q,     including the results of the independent auditor’s review of the quarterly     financial statements.

 
    - Discuss     with management and the independent auditor significant financial     reporting issues and judgments made in connection with the preparation of     the Company’s financial statements, including any significant changes in     the Company’s selection or application of accounting principles, any major     issues as to the adequacy of the Company’s internal controls and any     special steps adopted in light of material control deficiencies.

 
    - Review and     discuss quarterly reports from the independent auditors on:
    Critical      accounting policies and practices to be used.
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, and the treatment      preferred by the independent auditor.
Other      material written communications between the independent auditor and management,      such as any management letter or schedule of unadjusted differences.

 
    - At least annually, obtain and review a report by the     independent auditor describing operation of internal control over     financial reporting which are reasonably likely to adversely affect the     company’s ability to record, process, summarize, and report financial     data; and b) any fraud, whether or not material, that involves management     or other employees who have a significant role in the company’s internal     controls.

 
    - Discuss     with management the Company’s earnings press releases, including the use     of “pro forma” or “adjusted” non-GAAP information, as well as financial     information and earnings guidance provided to analysts and rating     agencies. Such discussion may be done generally (consisting of discussing     the types of information to be disclosed and the types of presentations to     be made).

 
    - 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.

 
    - Discuss     with management the Company’s major financial risk exposures and the steps     management has taken to monitor and control such exposures, including the     Company’s risk assessment and risk management policies.

 
    - Discuss     with the independent auditor the matters required to be discussed by     Statement on Auditing Standards No. 61 relating to the conduct of the     audit, including any difficulties encountered in the course of the audit     work, any restrictions on the scope of activities or access to requested     information, and any significant disagreements with management.

 
    - Review     disclosures, if any, made to the Audit Committee by the Company’s CEO and     CFO during their certification process for the Form 10-K and Form10-Q     about any significant deficiencies in the design or operation of internal     controls or material weaknesses therein and any fraud involving management     or other employees who have a significant role in the Company’s internal     controls.

 

**Oversight of the Company’s Relationship with theIndependent Auditor**

 
    - Review and     evaluate the lead partner of the independent auditor team.

 
    - Obtain and     review a report from the independent auditor at least annually regarding     (a) the independent auditor’s 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. 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 and internal auditors. The Audit Committee shall present its     conclusions with respect to the independent auditor to the Board.

 
    - Review the     rotation of the audit partners for compliance with law. 

 
    - Actively     engage  in  dialogue with the     independent auditor with respect to any disclosed relationships or     services that may affect the independence and objectivity of the auditor     and take appropriate actions to oversee the independence of the outside     auditor.

 

**Oversightof the Company’s Internal Audit Function**

 
    - Review and     evaluate the senior internal auditing executive.

 
    - Review the     significant reports to management prepared by the internal auditing     department and management’s responses.

 
    - Discuss     with the independent auditor and management the internal audit department     responsibilities, budget and staffing and any recommended changes in the     planned scope of the internal audit.

 

**Oversightof Related-Party Transactions**

 
    - Review     and approve all  related -party     transactions, defined as those transactions required to be disclosed under     Item 404 of Regulation S-K. 

 

**ComplianceOversight Responsibilities**

 
    - Obtain from     the independent auditor assurance that Section 10A (b) of the Exchange Act     has not been implicated.

 
    - Obtain     reports from management, the Company’s senior internal auditing executive     and the independent auditor that the Company and its subsidiary entities     are in conformity with applicable legal requirements. Review reports and     disclosures of insider and affiliated party transactions. Advise the Board     with respect to the Company’s policies and procedures regarding compliance     with applicable laws and regulations and with the Company’s Code of     Ethics.

 
    - Establish     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 submission by employees     of concerns regarding questionable accounting or auditing matters.

 
    - Discuss     with management and the independent auditor any correspondence with     regulators or governmental agencies.

 
    - Discuss     with the Company’s General Counsel legal matters that may have a material     impact on the financial statements or the Company’s compliance policies.

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**Limitationof Audit Committee’s Role**

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While theAudit Committee has the responsibilities and powers set forth in this Charter,it is not the duty of the Audit Committee to plan or conduct audits or todetermine that the Company’s financial statements are complete and accurate andare in accordance with generally accepted accounting principles and applicablerules and regulations. These are the responsibilities of management and theindependent auditor.