Edgar Filing: HERZFELD CARIBBEAN BASIN FUND INC

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

The Herzfeld Caribbean Basin Fund, Inc.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

The Herzfeld Caribbean Basin Fund, Inc.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 14, 2007
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Miami, Florida
August 31, 2007

TO THE STOCKHOLDERS OF
THE HERZFELD CARIBBEAN BASIN FUND, INC.:

The Annual Meeting of Stockholders of The Herzfeld Caribbean Basin
Fund, Inc. (the "Fund") will be held on November 14, 2007, at 2:00 p.m. Eastern
time, in the Lobby Conference Room, 300 South Pointe Drive, Miami Beach, FL
33139, for the following purposes:

(1) the election of one Class I director and one Class II director; and

(2) to transact such other business as may properly come before the
meeting and any adjournments thereof.

The subjects referred to above are discussed in detail in the Proxy
Statement attached to this notice. Each stockholder is invited to attend the
Annual Meeting of Stockholders in person. Stockholders of record at the close of
business on August 16, 2007, have the right to vote at the meeting. If you
cannot be present at the meeting, we urge you to fill in, sign, and promptly
return the enclosed proxy in order that the meeting can be held without
additional expense and a maximum number of shares may be voted.

CECILIA GONDOR
Secretary

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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE.

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY, DATE, SIGN AND
RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION
IN RETURNING YOUR PROXY PROMPTLY. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR TO
ITS USE.
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The Herzfeld Caribbean Basin Fund, Inc.
P.O. Box 161465, Miami, Florida 33116

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
NOVEMBER 14, 2007

This statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Herzfeld Caribbean Basin Fund, Inc.
(the "Fund") for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held in Lobby Conference Room, 300 South Pointe Drive, Miami
Beach, FL 33139, on November 14, 2007 at 2:00 p.m. Eastern time.

Proxies may be solicited by mail, telephone, telegraph and personal
interview. The Fund has also requested brokers, dealers, banks or voting
trustees, or their nominees to forward proxy material to the beneficial owners
of stock of record. You may revoke your proxy at any time prior to the exercise
thereof by submitting a written notice of revocation or subsequently executed
proxy to the Secretary of the meeting. Signing and mailing the proxy will not
affect your right to give a later proxy or to attend the meeting and vote your
shares in person. The cost of soliciting proxies will be paid by the Fund. This
proxy statement is expected to be distributed to stockholders on or about August
31, 2007.

THE PERSONS NAMED IN THE ACCOMPANYING PROXY WILL VOTE THE NUMBER OF
SHARES REPRESENTED THEREBY AS DIRECTED OR, IN THE ABSENCE OF SUCH DIRECTION, FOR
THE NOMINEES FOR DIRECTOR AND TO TRANSACT SUCH OTHER BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.

On August 16, 2007, the date for determination of stockholders entitled
to receive notice of and to vote at the Annual Meeting, or any adjournment
thereof, there were issued and outstanding 1,687,556 shares of Common Stock of
the Fund, each entitled to one vote, constituting all of the Fund's then
outstanding securities.

At the Annual Meeting, a quorum shall consist of the holders of a
majority of the outstanding shares of the Common Stock of the Fund entitled to
vote at the meeting. If a quorum is present, a plurality of all votes cast at
the Annual Meeting shall be sufficient for the election of the director
(Proposal 1). Under Maryland law, abstentions and broker non-votes will be
included for purposes of determining whether a quorum is present at the Annual
Meeting, but will be treated as votes not cast, and therefore, will not be
counted for purposes of determining whether matters to be voted upon at the
Annual Meeting have been approved.

The Fund will furnish, without charge, a copy of its annual report for
its fiscal year ended June 30, 2007, and the most recent semi-annual report
preceding the annual report to any stockholder requesting such reports.

Requests for the annual report or semi-annual report should be made in
writing to the Fund at the address set forth above or by calling the Secretary
of the Fund, Cecilia Gondor, at 800-854-3863 or 305-271-1900.

ELECTION OF DIRECTORS
(Proposal 1)

Two directors are to be elected at the Annual Meeting. Pursuant to the
Fund's By-Laws, the directors are classified into three classes with respect to
the year of expiration of their terms of office. Because the Fund's Class II
director's term of office will expire in 2007, the Annual Meeting is being held
for the election of that director. In addition, shareholders will vote on the
election of one new Class I director whose term of office will expire in 2009.
The Class III directors' terms of office will expire in 2008.

If authority is granted on the accompanying proxy card to vote in the
election of directors, it is the intention of the person named in the proxy to
vote at the Annual Meeting for the election of the nominees named below, who
have consented to being named in the proxy statement and to serve if elected. If
a nominee is unavailable to serve for any reason, the person named as proxy will
vote for such other nominee or nominees selected by the Board of Directors, or
the Board may reduce the number of directors as provided in the Fund's By-Laws.
The Fund currently knows of no reason why the nominees listed below would be
unable or unwilling to serve if elected.

As of August 31, 2007, the Fund's Board of Directors consisted of four
members. One Class II director of the Fund, Ms. Ann Lieff, and one Class I
director of the Fund, Dr. Kay Tatum, are the only nominees for election. Ms.
Lieff's current term as director will expire on the date of the Annual Meeting
or when her successor is elected and qualifies. The nominees would serve until
their successor has been elected and qualified.

Certain information regarding the nominees as well as the current directors
and executive officers of the Fund is set forth below.

Nominees for Director - "Independent Person"

Name, Address, Age Position(s) Term of Office and Principal Occupation(s) Number of Portfolios Other
Held Length of Time Served During Past 5 Years In Complex Overseen Directorships
with Fund by Director held by Nominee
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Ann S. Lieff Director 1998 to present President of The Lieff Company, 1 Hastings Entertain-
c/o The Herzfeld Caribbean a management consulting firm ment, Inc.; Birks &
Basin Fund, Inc. that offers ongoing advisory Mayors, Inc.
PO Box 161465 services as a corporate director
Miami, FL 33116 to several leading regional and
Age: 55 national retail operations, 1998 to
present; former CEO Spec's Music,
1980-1998, a retailer of recorded
music

Kay W. Tatum, Director 2007 to present Chair and Associate Professor of 1 None
Ph.D., CPA Accounting, University of Miami
c/o The Herzfeld Caribbean School of Business Administration,
Basin Fund, Inc. 2004-present; Associate Professor of
PO Box 161465 Accounting, University of Miami,
Miami, FL 33116 1992-present, Assistant Professor of
Age: 55 Accounting, University of Miami,
1986-1992.

Current Directors and Officers

Officers:
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Thomas J. Herzfeld* President, 1993 to present Chairman and President of 2 The Cuba Fund, Inc.
PO Box 161465 Chairman, Thomas J. Herzfeld & Co., Inc., (in registration)
Miami, FL 33116 Director a broker dealer, and
Age: 62 Thomas J. Herzfeld Advisors, Inc.

Cecilia L. Gondor Secretary, 1993 to present Executive Vice President of N/A
PO Box 161465 Treasurer Thomas J. Herzfeld & Co., Inc.,
Miami, FL 33116 a broker dealer, and
Age: 45 Thomas J. Herzfeld Advisors, Inc.

Independent Directors:
----------------------

Ann S. Lieff Director 1998 to present President of the Lieff Company, a 1 Hastings
c/o The Herzfeld Caribbean management consulting firm that Entertainment, Inc.;
Basin Fund, Inc. offers ongoing advisory services as Birks & Mayors, Inc.
PO Box 161465 a corporate director to several leading
Miami, FL 33116 regional and national retail operations,
Age: 55 1998-present; former CEO Spec's
Music 1980-1998, a retailer of
recorded music.

Michael A. Rubin Director 2002 to present Partner of Michael A. Rubin P.A., 1 Margo Caribe, Inc.
c/o The Herzfeld Caribbean attorney at law; Broker, Oaks
Basin Fund, Inc. Management & Real Estate Corp., a
PO Box 161465 real estate brokerage corporation
Miami, FL 33116
Age: 65

Kay W. Tatum, Director 2007 to present Chair and Associate Professor of 1 None
Ph.D, CPA Accounting, University of Miami
c/o The Herzfeld Caribbean School of Business Administration,
Basin Fund, Inc. 2004-present; Associate Professor of
PO Box 161465 Accounting, University of Miami,
Miami, FL 33116 1992-present, Assistant Professor of
Age: 55 Accounting, University of Miami,
1986-1992.

*An "interested person" (as defined in the Investment Company Act of 1940) of
the Fund because he/she is an officer and employee of the Fund's investment
adviser.

Ownership of Fund Securities by Directors and Executive Officers

Dollar Range Number of Percent
Name of Equity in the Fund** Shares Held** of Class**
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Interested Director
and Executive Officer

Thomas J. Herzfeld Over $100,000 13,424 0.79%
Cecilia L. Gondor $10,001 - $50,000 1,800 0.11%

Independent Directors

Ann S. Lieff $10,001 - $50,000 1,666 0.10%
Michael A. Rubin $10,001 - $50,000 1,000 0.06%
Kay W. Tatum, Ph.D., CPA $0 0 0.00%

All directors and
executive officers
as a group (five persons) N/A 17,890 1.06%

**As of June 30, 2007

The Board of Directors of the Fund held four regular meetings during
the Fund's fiscal year ended June 30, 2007. Each of the directors attended at
least 75% of the aggregate number of meetings of the Board of Directors and of
each committee of which he or she was a member.

Audit Committee

The Audit Committee of the Board currently consists of Mr. Rubin, Ms.
Lieff and Dr. Tatum none of whom is an "interested person" of the Fund. Each
member of the Audit Committee is considered independent under the applicable
National Association of Securities Dealers' ("NASD") listing standards. The
Board of Directors has adopted a written charter for the Audit Committee, a copy
of which is attached hereto as Appendix A. The Audit Committee reviews the scope
of the audit by the Fund's independent auditors, confers with the auditors with
respect to the audit and the internal accounting controls of the Fund and with
respect to such other matters as may be important to an evaluation of the audit
and the financial statements of the Fund, and makes recommendations with respect
to the selection of auditors for the Fund.

Audit Committee Report

The Audit Committee met twice during the fiscal year ended June 30,
2007, and has reviewed and discussed the Fund's audited financial statements
with Fund management. Further, the Audit Committee has discussed with Rothstein
Kass & Company, LLP, the Fund's independent auditors, the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). The Audit Committee has received the written disclosures and a
letter from Rothstein Kass & Company, LLP required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with Rothstein Kass & Company, LLP their independence. Based upon the
foregoing, the Audit Committee recommended to the Board of Directors that the
audited financial

statements of the Fund be included in the Fund's annual report to stockholders
for filing with the U.S. Securities and Exchange Commission for the fiscal year
ended June 30, 2007.

Kay W. Tatum
Ann S. Lieff
Michael A. Rubin

Nominating Committee

The Board has a Nominating Committee comprised solely of independent
directors which consists of Mr. Rubin, Ms. Lieff and Dr. Tatum. The Nominating
Committee is responsible for reviewing and recommending qualified candidates in
the event that a directorship is vacated or created, and operates under a
written charter, a copy of which was included as Appendix A to the Fund's proxy
statement for the 2004 Annual Meeting. The Nominating Committee will not
consider nominees recommended by stockholders. Each member of the Nominating
Committee is an independent director under the rules promulgated by the NASD.
The Nominating Committee believes that candidates for director should have
certain minimum qualifications, including (i) the ability to apply good business
judgment and must be in a position to properly exercise their duties of loyalty
and care; (ii) proven leadership capabilities, high integrity and moral
character, significant business experience and a high level of responsibility
within their chosen fields; (iii) the ability to quickly grasp complex
principles of business, finance, international transactions and the regulatory
environment in which investment companies must operate; and (iv) the ability to
read and understand basic financial statements, however the committee retains
the right to modify these minimum qualifications from time to time. In general,
candidates will be preferred who hold an established senior or executive level
position in business, finance, law, education, research or government. The
committee's process for identifying and evaluating nominees is as follows: In
the case of incumbent directors whose terms of office are set to expire, the
Nominating Committee reviews such directors' overall service to the Fund during
their term, including the number of meetings attended, level of participation,
quality of performance, and any transactions of such directors with the Fund, if
any, during their term, and confirms their independence if applicable. In the
case of new director candidates, the committee first determines whether the
nominee must be independent for purposes of The Nasdaq Stock Market and whether
the candidate must be considered a disinterested director under the Investment
Company Act. In either case, determinations are based upon the Fund's charter
and bylaws, applicable securities laws, the rules and regulations of the SEC,
the rules of the National Association of Securities Dealers, and the advice of
counsel, if necessary. The committee then uses its network of contacts to
compile a list of potential candidates, but may also engage, if it deems
appropriate, a professional search firm. The committee then meets to discuss and
consider such candidates' qualifications and recommend the nominee. The
Nominating Committee held one meeting during the last fiscal year.

Stockholders and other interested parties may contact the Board or any
member of the Board by mail. To communicate with the Board or any member of the
Board correspondence should be addressed to the Secretary of the Fund, Attention
Board of Directors. All such correspondence should be sent c/o the Fund at P.O.
Box 161465, Miami, Florida, 33116.

The Fund pays those directors who are not "interested persons" of the
Fund $1,000 per year in addition to $400 for each meeting of the Board attended,
plus reimbursement for expenses. Such fees totaled $7,800 for the fiscal year
ended June 30, 2007.

The aggregate compensation paid by the Fund to each of its directors
serving during the fiscal year ended June 30, 2007, is set forth in the
compensation table below. Mr. Herzfeld receives no direct compensation for his
services on the Fund's Board.

Total Compensation
Aggregate Pension or Retirement Estimated From Fund and Fund
Name of Person and Compensation Benefits Accrued Annual Benefits Complex Paid to
Position with Fund from the Fund as Part of Fund Expenses Upon Retirement Directors

Thomas J. Herzfeld* $0 $0 $0 $0
President and Director

Ann S. Lieff $2,600 $0 $0 $2,600
Director

Albert L. Weintraub** $2,600 $0 $0 $2,600
Director

Michael A. Rubin $2,600 $0 $0 $2,600
Director

Kay W. Tatum** $0 $0 $0 $0

*"Interested person" of the Fund as defined by Section 2(a)(19) of the
Investment Company Act of 1940.
**Albert L. Weintraub retired from the Board as of July 24, 2007 and was
replaced by Kay W. Tatum, Ph.D., CPA on August 1, 2007

The Fund does not have a formal policy regarding attendance by
directors at annual meetings of stockholders but encourages such attendance. All
members of the Board attended the Fund's 2006 Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE FUND'S STOCKHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES FOR DIRECTOR.

ADDITIONAL INFORMATION

HERZFELD/CUBA (the "Adviser"), a division of Thomas J. Herzfeld
Advisors, Inc., with offices at The Herzfeld Building, P.O. Box 161465, Miami,
Florida 33116, serves as the Fund's investment adviser pursuant to an Investment
Advisory Contract dated September 10, 1993. The Adviser also provides certain
administration services to the Fund, but the Fund has no formal administrative
contract. Mr. Herzfeld, a director of the Fund, is an executive of the Adviser.

Thomas J. Herzfeld & Co., Inc., P.O. Box 161465, Miami, Florida 33116,
acted as Underwriter to the Fund.

Rothstein Kass & Company, LLP, 101 Montgomery Street, 22nd Floor, San
Francisco, CA 94104, independent registered public accounting firm, have been
selected by the Board as the Fund's independent auditors for the current fiscal
year ending on June 30, 2008. A representative of Rothstein Kass & Company, LLP
will be available at the meeting and will have the opportunity to respond to
appropriate questions from stockholders and to make such statements as desired.

Changes in Registrant's Certifying Accountant

On February 14, 2006, the Audit Committee of the Board of Directors of The
Herzfeld Caribbean Basin Fund, Inc. selected a new independent registered pubic
accounting firm for the Fund following the resignation of the Fund's former
accounting firm. Following a competitive bid process, which included requests
for proposals from several accounting firms, the Fund's Audit Committee approved
Rothstein, Kass & Company, LLP ("Rothstein Kass") to serve as the Fund's
independent registered public accounting firm for the fiscal year ending June
30, 2006, replacing Kaufman, Rossin & Co. P.A., the Fund's prior independent
registered public accouting firm.

INDEPENDENT AUDITORS' FEES

The following table sets forth the aggregate fees charged by the
independent auditors for the two most recent fiscal years for professional
services rendered for: (i) the audit of the annual financial statements and the
review of the financial statements included in the Fund's report to
stockholders; (ii) assurance and related services; (iii) tax compliance, tax
advice, and tax planning; (iv) all other products and services provided to the
Fund which included matters related to regulatory issues and preparation of
unaudited financial statements.

Fiscal Audit Fees Audit-Related Fees Tax Fees All
Year-End Other Fees
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6/30/07 $36,500 $4,500 (9.73%) $5,250 (11.35%) $0 (0%)
6/30/06 $37,500 $6,000 (12.37%) $5,000 (10.31%) $0 (0%)

The Fund's Audit Committee charter requires that the Audit Committee shall
pre-approve all auditing services and permitted non-audit services (including
the fees for such services and terms thereof) to be performed for the Fund by
its independent public accountants in one of two methods. Under the first
method, the engagement to render the services would be entered into pursuant to
pre-approval policies and procedures established by the Audit Committee,
provided (i) the policies and procedures are detailed as to the services to be
performed, (ii) the Audit Committee is informed of each service, and (iii) such
policies and procedures do not include delegation of the Audit Committee's
responsibilities under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") to the Fund's management. Under the second method, the
engagement to render the services would be presented to and pre-approved by the
Audit Committee (subject to the de minimus exceptions for non-audit services
described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the
Audit Committee prior to the completion of the audit). At the present time, the
Audit Committee has not adopted pre-approval policies and procedures, and would
use the second method for pre-approval provided for in its charter. All of the
audit, audit-related and tax services described above for which the independent
public accountants billed the registratnt fees for the fiscal years ended June
30, 2006 and 2007 were pre-approved by the Audit Committee.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of August 16, 2007, there were no persons known by the Fund to own
beneficially more than 5% of the outstanding shares of the Fund.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Fund's directors, executive officers and certain other persons (collectively,
"Reporting Persons"), to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in ownership of
equity securities of the Fund. Reporting Persons are required by SEC regulations
to furnish the Fund with copies of all Section 16(a) forms they file.

To the Fund's knowledge, based solely on review of the copies of such
reports furnished to the Fund during the fiscal year ended June 30, 2007, all
Section 16(a) filing requirements applicable to the Reporting Persons were
complied with.

STOCKHOLDER PROPOSALS

Proposals intended to be presented by stockholders for consideration at
the 2008 Annual Meeting of Stockholders must be received by the Secretary of the
Fund no later than May 2, 2008, in order to be included in the proxy statement
for the meeting. A stockholder who wishes to make a proposal at the 2008 Annual
Meeting of stockholders without including the proposal in the Fund's proxy
statement must notify the Fund, and the Fund's officers, of such proposal no
earlier than August 16, 2008 (90 days prior), and no later than September 16,
2008 (60 days prior, assuming a November 14, 2008 meeting.) If a stockholder
fails to give notice by the later date, then the persons named as proxies in the
proxies solicited by the Board for the 2008 Annual Meeting of Stockholders may
exercise discretionary voting power with respect to any such proposal.

To submit a proposal, a stockholder must own 1% or $2,000 worth of
shares of the Fund for at least one year and must own those shares through the
date of the 2008 Annual Meeting. Stockholders who qualify may submit only one
proposal per Annual Meeting, and the proposal may be no longer than 500 words.

REPORTS TO STOCKHOLDERS AND FINANCIAL STATEMENTS

The Annual Report to Stockholders of the Fund, including audited
financial statements of the Fund for the fiscal year ended June 30, 2007, is
being mailed to stockholders. The Annual Report should be read in conjunction
with this Proxy Statement but is not part of the proxy soliciting material. A
copy of the Annual Report may be obtained from the Fund, without charge, by
contacting the Fund in writing at the address on the cover of this Proxy
Statement, or by calling 800-854-3863 or 305-271-1900.

OPEN MATTERS

Management of the Fund does not know of any matters to be presented at
the Annual Meeting other than those mentioned in this Proxy Statement. If any
other business should come before the meeting, the proxies will vote thereon in
accordance with their best judgment.

By Order of the Directors,

Cecilia Gondor
Treasurer & Secretary

EXHIBIT A

THE HERZFELD CARIBBEAN BASIN FUND, INC.
AUDIT COMMITTEE CHARTER

ARTICLE I
PURPOSE

The purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors of The Herzfeld Caribbean Basin Fund, Inc. (the "Fund") in
undertaking and fulfilling its oversight responsibilities in connection with:

(a) reviewing the financial reports and other financial information
prepared by the Fund for submission to any governmental or regulatory body or
the public and monitoring the integrity of such financial reports;
(b) reviewing the Fund's systems of internal controls established for
finance, accounting, legal compliance and ethics;
(c) reviewing the Fund's accounting and financial reporting processes
generally and the audits of the financial statements of the Fund;
(d) monitoring compliance with legal regulatory requirements;
(e) monitoring the independence and performance of the Fund's
independent public accountants; and
(f) providing effective communication between the Board, senior and
financial management and the Fund's independent public accountants.

In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full power and all necessary resources to
retain special legal, accounting or other consultants to advise the Committee.

ARTICLE II
MEMBERSHIP AND TERM

2.1. Membership. The Committee shall consist of at least three members
of the Fund's Board of Directors. Committee members shall meet the independence
requirements of the Nasdaq Stock Market, Section 10A(m)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the
Securities and Exchange Commission ("Commission"). Accordingly,

(a) The Committee shall be composed entirely of Directors who are not
"interested persons" (as defined in the Investment Company Act of 1940) of the
Fund;
(b) Each member of the Committee must be an independent, non-executive
Director free from any relationship that, in the judgment of the Board, would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director;
(c) Each member of the Committee must not accept directly or indirectly
any consulting, advisory, or other compensatory fee from the Fund or any
subsidiary thereof other than in such member's capacity as a Director;
(d) Each member of the Committee must be financially literate(1) at the
time of appointment to the Committee; and

(e) At least one member of the Committee must have past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in
such individual's financial sophistication, including being or having been a
chief executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.

2.2. Term. Each member of the Committee shall serve until his
resignation or he is otherwise removed. Any vacancy occurring in the Committee
shall be filled by the remaining Committee members. The members of the Committee
will elect a Chairman by formal vote of the Committee's full membership.

ARTICLE III
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS

The Fund's independent public accountants shall be accountable to the
Committee. The Committee will ascertain that the independent public accountants
will be available to the full Board at least annually (and more frequently if
deemed appropriate by the Committee) to provide the Board with a timely analysis
of significant financial reporting issues. The Committee will not engage the
independent public accountants to perform any services set forth in Section
10(A)(g) of the Exchange Act.

ARTICLE IV
MEETINGS

The Committee shall meet on a regular basis and is empowered to hold
special meetings, as circumstances require, all in accordance with the Fund's
charter and bylaws.

a. The Committee shall meet at least annually with management of the
Fund and with the Fund's independent public accountants to discuss any issues
arising from the Committee's oversight obligations.
b. The Committee shall meet at least annually with the independent
public accountants (outside the presence of management) to discuss any issues
arising from the Committee's oversight obligations.
c. The Committee shall meet at least annually with management (outside
the presence of the independent public accountants) to discuss management's
evaluation of the work performed by the independent public accountants and the
appropriateness of their fees.
d. The Committee shall keep minutes of each meeting and those minutes
shall be reported to the Board of Directors.

1 The term "financial literacy" means that a member of the Committee must have
the ability to read and understand fundamental financial statements, including a
balance sheet, income statement and cash flow statement. The term "financial
literacy" does not mean that a member must have a chief financial officer's or
accounting practitioner's understanding of generally accepted accounting
principals, consistently applied, as adopted in the United State of America by
the Financial Accounting Standards Board ("GAAP").

ARTICLE V
RESPONSIBILITIES

The following functions are the common recurring activities of the
Committee in carrying out its oversight role. These functions are set forth as a
guide with the understanding that the Committee may diverge from this guide as
appropriate given the circumstances.

(a) Review and reassess the adequacy of the Committee and this Charter
not less than annually and recommend any proposed changes to the Board for
consideration and approval.
(b) Review with management and the independent public accountants the
audited financial statements and related footnotes, and the clarity of the
disclosures in the financial statements, to be included in the Fund's Annual
Report on Form N-CSR and N-SAR, prior to the filing of such forms, and its
Annual Report to Shareholders, including a review of major issues regarding
accounting and auditing principles and practices and any related party
transactions as well as the adequacy of internal controls that could
significantly affect the Fund's financial statements, and review and consider
with the independent public accountants the matters required to be discussed by
Statement on Auditing Standards ("SAS") 61.
(c) Review with management and the independent public accountants their
judgments about the quality, not just the acceptability, of accounting
principles, the reasonableness of significant judgments, and the clarity and
transparency of the disclosures in the financial statements.
(d) Prepare the report required by the rules of the Securities and
Exchange Commission regarding the Committee to be included in the Fund's annual
proxy statement. The Committee will include a statement within such report on
whether the Committee has recommended that the financial statements be included
in the Fund's annual Report to Shareholders, and the Fund's Annual Report on
Forms N-CSR and N-SAR. The Committee should also ensure that a copy of this
Charter is included within the Fund's proxy statement at least once every three
years.
(e) Discuss with management and the independent public accountants the
effect of regulatory and accounting initiatives, including pronouncements by the
Financial Accounting Standards Board, the Securities and Exchange Commission and
other agencies or bodies, on the Fund's financial statements.
(f) Review disclosures made to the Committee by the Fund's President
and Chief Executive Officer and Chief Financial Officer, or the Fund's
disclosure committee or any member thereof, during their certification process
for Form N-CSR, 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 Fund's internal
controls.
(g) Review any relevant financial reports or other financial
information submitted to any governmental body, or the public, including any
certification, report, opinion, or review rendered by the independent public
accountants.
(h) Obtain from the independent public accountants their recommendation
regarding internal controls and other matters relating to the accounting
procedures and the books and records of the Fund and the correction of controls
deemed to be deficient. After the completion of the audit, the Committee shall
review with the independent public accountants any problems or difficulties the
independent public accountants may have encountered.
(i) Receive periodic reports from the independent public accountants
regarding relationships between the independent public accountants and the Fund
consistent with Independence Standards Board Standard Number 1. The Committee
shall also discuss with the independent public accountants any such disclosed
relationships

and their impact on the independent public accountants' independence. The
Committee shall take appropriate action to ensure the continuing objectivity and
independence of the independent public accountants.
(j) The Committee shall have the sole authority to appoint or replace
the independent public accountants (subject, if applicable, to stockholder
ratification).
(k) The Committee shall be directly responsible for the compensation
and oversight of the work of the independent public accountants (including
resolution of disagreements between management and the independent public
accountant regarding financial reporting) for the purpose of preparing or
issuing an audit report or related work. The independent public accountants
shall report directly to the Committee.
(l) The Committee shall pre-approve all auditing services and permitted
non-audit services (including the fees for such services and terms thereof) to
be performed for the Fund by its independent public accountants in one of two
methods. Under the first method, the engagement to render the services would be
entered into pursuant to pre-approval policies and procedures established by the
Committee, provided (i) the policies and procedures are detailed as to the
services to be performed, (ii) the Committee is informed of each service, and
(iii) such policies and procedures do not include delegation of the Committee's
responsibilities under the Exchange Act to the Fund's management. Under the
second method, the engagement to render the services would be presented to and
pre-approved by the Committee (subject to the de minimus exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that
are approved by the Committee prior to the completion of the audit). The
Chairman of the Committee will have the authority to grant pre-approvals of
audit and permissible non-audit services by the independent public accountants,
provided that all pre-approvals by the Chairman must be presented to the full
Committee at its next scheduled meeting. The Fund will provide for appropriate
funding as determined by the Committee, for payment of compensation to the
independent public accountants and to any consultants, experts or advisors
engaged by the Committee and for ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.
(m) Adopt procedures for the receipt, retention and treatment of
complaints received by the Fund regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees, as well as employees of any investment adviser, administrator,
principal underwriter or any other provider of accounting related services of or
to the Fund, of concerns regarding questionable accounting or auditing matters.
(n) Ensure the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit partner responsible
for reviewing the audit as required by law.
(o) Recommend to the Board policies for the Fund's hiring of employees
or former employees of the independent public accountants who participated in
any capacity in the audit of the Fund.
(p) Review with the Fund's counsel legal matters that may have a
material impact on the financial statements, the Fund's compliance policies and
any material reports or inquiries received from regulators or governmental
agencies.
(q) Conduct or authorize investigation into any matters within the
Committee's scope of responsibilities with full access to all books, records,
facilities and personnel of the Fund and direct access to the independent public
accountants. The Committee has the ability to retain, at the Committee's
request, special legal, accounting or other consultants, experts or advisors it
deems necessary in the performance of its duties.
(r) Consider such other matters in relation to the financial affairs of
the Fund and its accounts, and in relation to the audit of the Fund, as the
Committee may, in its discretion, determine to be advisable. 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 Fund's
financial statements are complete and accurate and are in accordance with the
generally accepted accounting principles. This is the

responsibility of management and the independent public accountants.

The Committee recognizes that the Fund's management is responsible for
preparing the Fund's financial statements, and the independent public
accountants are responsible for auditing or reviewing those financial statements
in compliance with applicable law. The Committee also recognizes that management
of the Fund and the independent public accountants have more time, knowledge and
more detailed information on the Fund than do Committee members. Consequently,
in carrying out its oversight responsibility, the Committee will not provide any
special assurances as to the Fund's financial statements or any professional
certification as to the independent public accountants' work. In addition, it is
not the duty of the Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent public
accountants, or to assure compliance with laws and regulations.

The date of the adoption of this charter by the Audit Committee was February 5,
2004.

The date of the adoption of this charter by the Board of Directors of the Fund
was February 5, 2004.