Status

The Audit Committee (the "Committee") is a committee of the Board of Directors (the "Board").

Membership

The Committee shall consist of three or more directors, all of whom in the judgment of the Board shall be independent in accordance with Securities and Exchange Commission ("SEC") and Nasdaq Stock Market ("Nasdaq") standards. Each member shall have in the judgment of the Board the ability to read and understand the Company's basic financial statements. At least one member of the Committee shall be in the judgment of the Board an audit committee financial expert according to SEC and Nasdaq standards.

Purpose

The purpose of the Committee shall be to oversee the accounting and financial reporting processes and audits of its financial statements.

Responsibilities

1. Appoint, compensate, and oversee the work of the independent auditor, including resolution of any disagreement on financial reporting between the auditor and management.

2. Approve in advance all permitted non-audit services to be performed by the independent auditor. The Chairman is delegated the authority to approve such services so long as any such approval is disclosed to the full Committee at its next scheduled meeting.

3. Ensure receipt of, and evaluate, written disclosures by the independent auditor on its independence in accordance with applicable Independence Standards Board Standards; take appropriate action to address any issues raised by such evaluation.

4. Discuss with the independent auditor matters required to be discussed by applicable Statements on Auditing Standards.

5. Review with the independent auditor: (a) the scope and results of the audit; (b) any problems or difficulties that the auditor encountered in the course of the audit work, and management's response; and (c) the auditor's management letter and any other questions, comments or suggestions the auditor may have on the internal controls and accounting practices and procedures of the Company.

6. Review, at least annually, the scope and results of the Company's internal audit program, including any significant matters and related disposition contained in reports from the Company's Audit Services Department.

7. Review with the independent auditor, the Company's Audit Services Department, and management the adequacy and effectiveness of the system of internal controls, including any significant deficiencies and significant changes in internal controls reported to the Committee, accounting practices, and disclosure controls and procedures and management reports thereon.

8. Discuss with the independent auditor: (a) critical accounting policies of the Company, alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, effects on the financial statements of the use of such alternative treatments, and the treatment preferred by the auditors; and (b) any other material written communications between it and management.

9. Evaluate annually the performance of the independent auditor.

10. Review and discuss interim financial results and audit findings with senior management the independent auditors prior to issuance of quarterly earnings releases.

11. Review with management and the independent auditor the annual and quarterly financial statements of the Company before their filing on Form 10-Q or Form 10-K with the SEC, including: (a) any material changes in accounting principles or practices used in preparing the financial statements; and (b) the items required by applicable Statements on Auditing Standards for annual and quarterly statements.

12. Review contingent liabilities and risks that may be material to the Company, including pending or potential litigation, and any major legislative and regulatory developments that could materially affect these liabilities and risks.

13. Complete a report each year for inclusion in the Company's proxy statement in accordance with SEC rules and regulations.

14. Establish procedures for the confidential and anonymous receipt, retention, and treatment of complaints about the Company's accounting, internal controls, and auditing matters.

15. Review and approve all related party transactions.

16. Conduct or authorize such inquiries into matters within the Committee's scope of responsibility, as the Committee deems appropriate.

Meetings

The Committee shall meet at least four times each year and at such other times as it deems necessary to fulfill its responsibilities. The Committee shall periodically meet separately, in executive session, with management, the internal auditor and the independent auditor. The Committee shall report regularly to the Board on its activities and make recommendations to the Board as appropriate. For the transaction of any Committee meeting, a majority of the members shall constitute a quorum.

Resources and Authority

The Committee has exclusive authority to retain the independent auditors. 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 has the authority to retain outside advisors, including legal counsel, auditors, or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors. The Committee is not responsible for planning or conducting audits, or determining whether the Company's financial statements are complete and accurate or in accordance with generally accepted accounting principles. These are the responsibilities of management and the independent auditor.

Adopted by the Board of Directors of REMEC, Inc. on December 5, 2003.