1. Mission Statement
    The audit committee (the “Committee”) will assist the Board of Directors (the “Board”) of Intermagnetics General Corporation (the “Company”) in fulfilling the Board’s general oversight and monitoring of the independent auditor’s participation in the Company’s financial reporting process, the Company’s process for financial reporting, its system of internal control, audit process, and process for monitoring compliance with legal and regulatory requirements. In performing its duties, the Committee will maintain effective working relationships with the Board, management and the Company’s auditors. The primary objective of the Committee in fulfilling its responsibilities is to promote and preserve the integrity of the Company’s financial statements and the independence and performance of the Company’s external auditors.
  2. Organization

    2.1. Committee Composition: The Committee shall consist of not less than three (3) members who shall be appointed annually by the Board. The Board shall designate one (1) member of the Committee to serve as Chair.

    2.2. Member Qualifications: Each member should make a unique and valuable contribution to the Committee. Members must have the ability to: recognize the significance of the Committee; dedicate the time and energy necessary to accomplish the Committee’s role; understand the Company’s business, risks and controls; read and understand fundamental financial statements; and offer new and different perspectives and constructive suggestions. At least one member of the Committee shall have accounting or related financial management expertise. In addition, Committee members will satisfy the qualification requirements for audit committee members set forth in any rules, regulations or laws applicable to the Company.

    Compensation of the members shall be as determined by the Board of Directors. No member of the Committee may receive any compensation from the Company other than director’s fees.

    Independence of Members: Members of the Committee shall be independent. A member shall be considered independent if he or she has no relationship with the Company that may interfere with his or her independence from management, or if he or she is an “independent director” as that term may be defined by applicable rules, regulations or laws.

    2.4. Meetings: The Committee shall schedule and hold regular meetings with sufficient frequency to carry out its responsibilities. Whenever possible, Committee meetings will be scheduled in conjunction with meetings of the full Board. Committee meetings shall, when appropriate, include the Company’s external auditors and appropriate management representatives (e.g., President, CFO).
  3. Audit Committee Activities
    The principal activities of the Audit Committee will generally include the following:

    3.1. Review of Charter: Review and reassess the adequacy of this Charter annually and submit it to the Board for approval along with any recommended changes.

    3.2. Internal Control: The Committee shall review and evaluate corporate policies and controls and ensure that the Company’s external auditors keep the Committee informed about fraud, illegal acts, deficiencies in internal controls and other matters related to the Company’s financial processes.

    3.3. Financial Reporting:

    3.3.1. The Committee shall review the Company’s audited financial statements and annual audit process. Generally, the Committee shall:
    • review the overall audit plan with the independent auditor and management responsible for maintaining the Company’s accounts and preparing the Company’s financial statements (the “Senior Accounting Executive”).
    • review and discuss with management and the independent auditor:

                              iii.            the Company’s annual audited financial statements, including any significant reporting issues that arose in connection with the preparation of the statements;

                             iv.            the adequacy of the Company’s internal financial reporting controls; and

                               v.            major changes in, and questions regarding, accounting and auditing principles and procedures.

  1. review and discuss with the independent auditor (outside the presence of management) how the independent auditor plans to handle its responsibilities under the Private Securities Litigation Reform Act of 1995.
  2. review and discuss with the independent auditor (outside the presence of management) any problems or difficulties the auditor may have with management or others including any management letter provided by the auditor and the Company’s response to that letter. This review shall include any difficulties encountered by the auditors in the course of performing its audit, including any restrictions on the scope of its activities or access to information.
  3. review and discuss any major changes to the Company’s auditing and accounting principles and practices as may be suggested by the independent auditor or management
  4. discuss with the independent auditor issues that may be brought to the Committee’s attention pursuant to any applicable Statement on Auditing Standards (e.g. SAS No. 61).
  5. based on the Committee’s review and discussions with management and the independent auditors of the matters outlined above, make a recommendation to the Board as to whether the Company’s audited financial statements should be included in the Company’s annual report on Form 10-K.
  6. prepare the Audit Committee Report required by Item 306 of Schedule 14A of the Securities Exchange Act of 1934 (or any successor provision) to be included in the Company’s annual proxy statement.

    3.3.2. The Committee shall review and discuss with management and the independent auditor the Company’s quarterly financial statements. Such review shall include discussions between the Chair of the Committee, or the full Committee and the independent auditor of such issues as may be brought to their attention pursuant to Statement on Auditing Standards No. 71.

    3.4. Selection, Performance and
    Independence of Independent Auditors: The Committee shall:

    3.4.1. have the sole authority and responsibility for the appointment and termination of the Company’s independent auditors, as well as being responsible for setting the compensation and retention terms for, and overseeing and evaluating the performance of.

    3.4.2 request that the independent auditor provide the Committee with the written disclosures and letter required by Independence Standards Board Standard No. 1, and review and discuss the independence of the auditor with the Committee and the independent auditor. The Committee shall recommend that the Board take appropriate action, if necessary, to ensure the independence of the auditor.

    3.5. Investigations: The Board may request that the Committee review or investigate on behalf of the Board activities of the Company or of its employees, including compliance with applicable laws, regulations or Company policy.

    3.6. Procedures for Complaints: The Audit Committee will establish 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 employees of the Company of concerns regarding questionable accounting or auditing matters.

    3.7. Other Oversight Functions: The Committee will perform such other oversight functions as may be requested by the Board.

    4. Scope of Responsibilities

    4.1. In performing its responsibilities, the Committee shall be entitled to rely upon advice and information it receives in its discussions and communications with management and the independent auditors. The Committee shall have the authority to retain special legal, accounting or other professional advisors to the Committee. The Committee shall also have the authority to request that any Company officer or employee, outside legal counsel, independent auditor or other professional retained by the Company to render advice, attend meetings of the Committee or cooperate with any investigation conducted by the Committee. The Committee has authority to cause the Company to pay the compensation of such advisors, without further action by the Board.

    4.2. Notwithstanding the powers and responsibilities of the Committee as set forth in this Charter, the Committee does not have the responsibility of planning or conducting audits of the Company’s financial statements or determining whether the Company’s financial statements are complete, accurate and in accordance with generally accepted accounting principles. Such responsibilities are the duty of management and the independent auditor (to the extent consistent with the independent auditor’s scope of review). It is also not the duty of the Committee to resolve disagreements, if any, between management and the independent auditors or to ensure compliance with laws, regulations or Company policies.