The Audit Committee is appointed by the Board of Directors of INRAD OPTICS, INC. (“INRAD OPTICS”) to assist the Inrad Optics, Inc. Board in monitoring (a) the integrity of the financial statements of Inrad Optics, Inc. and its subsidiaries (the “Company”) and (b) the independence of performance of the Company’s external and, if applicable, internal auditors.

The members of the Audit Committee shall meet the independence and experience requirements of the National Association of Securities Dealers, Inc., subject to such qualifications and exceptions as may be permitted by such requirements. The members of the Audit Committee shall be appointed from time to time by the Inrad Optics Board. The Inrad Optics, Inc. Board reserves the right to amend, modify or replace this Charter in its discretion at any time.

The Audit Committee shall have the authority to retain special legal, accounting or other consultants to advise the Audit Committee. The Audit Committee may request any officer or employee of the Company, the Company’s outside counsel or independent auditor to attend meetings of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee.

The primary goals of this Charter are to specify the following:

• the scope of the Audit Committee’s responsibilities and the approaches to be used in carrying out those responsibilities, including structure, processes and membership requirements;
• the Audit Committee’s responsibility for (a) insuring its receipt from the Company’s independent auditor of a formal written statement delineating all relationships between such auditor and the Company, consistent with Independence Standards Board Standard No. 1, (b) actively engaging in a dialogue with such auditor with respect to any disclosed relationships or services that may impact the objectivity and the independence of the auditor and (c) taking, or recommending that the Inrad Optics, Inc. Board take, appropriate action to oversee the independence of the independent auditor; and
• the independent auditor’s ultimate accountability, to the Inrad Optics, Inc. Board and the Audit Committee, as representatives of the shareholders of Inrad Optics, Inc. and the ultimate authority and responsibility of the Inrad Optics, Inc. Board and/or the Audit Committee to select, evaluate and, where appropriate, replace the independent auditor (or, if applicable, to nominate the independent auditor to be proposed for shareholder approval in any proxy statement).

To the extent any statement set forth below is inconsistent with the three principles set forth above, the three principles set forth above shall govern.

The Audit Committee shall make regular reports to the Inrad Optics, Inc. Board, as required by the New Jersey Business Corporations Act.

Pursuant to this Charter:

1. THE COMMITTEE The Audit Committee of the Board of Directors of Inrad Optics, Inc. will consist of at least three members of the Board including a Chairman designated by the Board. Members of the Audit Committee may not be employees of the Company. The Committee will meet at least three times a year, with additional meetings if circumstances require, for the purpose of satisfying its responsibilities.

2. SCOPE The Committee serves at the pleasure of and is subject to the control and direction of the Board of Directors.

3. RESPONSIBILITIES OF THE COMMITTEE

4. FUNCTIONS OF THE COMMITTEE

The Committee will satisfy its responsibilities by completing the following functions:

• Discuss the results of the annual internal and independent audits with management and the internal and independent auditors.
• Consider the comments from the independent auditors and internal auditors with respect to internal accounting and management controls and the consideration given or action taken by management.
• Appoint the independent auditors for the coming year.
• Appraise the effectiveness of the independent audit effort through discussions with the independent auditors regarding their planned arrangements and scope of the annual audit, including fees.
• Review the scope of planned activities and budget along with a review of the effectiveness of the Company's internal auditors, if any.
• Review the anticipated scope and related fees of any non-audit services to be provided by the independent auditors to ensure that these services do not detract from the independence of the auditors in their audit function.
• Consider the comments from the independent auditors with respect to internal accounting and management controls and the consideration given or action taken by management.
• Review the Committee's responsibilities and functions, evaluate its performance, and institute appropriate modifications to reflect changes in the business environment.
• Monitor the procedures or systems used in preparing the financial statements of the Company.
• Obtain the assessment of management and the independent auditors as to the adequacy of:
  • the Company's internal accounting procedures and controls.
  • the Company's procedures for complying with SEC Regulations and The Foreign Corrupt Practices Act.
• Receive and review the assessment of management as to the quality and depth of staffing in the accounting and financial departments worldwide.
• Receive from the Company’s independent auditor a formal written statement delineating all relationships between such auditor and the Company, consistent with Independence Standards Board Standard No. 1.
• Engage in dialogue with the Company’s independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of such firm.
• Recommend to the Inrad Optics, Inc. Board appropriate actions to ensure the independence of the Company’s independent auditor.

I. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Inrad Optics, Inc. Board for approval.

II. Audit Committee should meet with independent auditor without management present.

III. Review the interim financial statements and financial results with independent auditor prior to filing Form 10-Qs.

IV. Review Year-End financial statements and financial results prior to filing Form 10-K.

V. Discuss required communication with independent auditor as required by PCAOB Auditing Standard No. 1301, “Communications with Audit Committees”.

• Review any information submitted to the Audit Committee pursuant to Section 10A of the Private Securities Litigation Reform Act of 1995.
• Prepare the report to the Company’s Board of Directors for inclusion in the Company’s annual proxy statement.
• Review with the independent auditor any material problems or difficulties the auditor may have encountered during an audit including any restrictions on the scope of activities or access to required information; review any management letter provided by the auditor and the Company’s response to that letter.

While the Audit 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 to determine that the Company’s financial statements are complete and accurate or are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations.