Audit Committee Charter

The Audit Committee has been established by the Board of Directors to assist the Board’s oversight of (1) the integrity of the Fund’s financial statements, (2) the Fund’s compliance with legal and regulatory requirements, (3) the qualifications, independence and performance of the Fund’s independent registered public accounting firm and (4) the performance by the Fund’s service providers of their respective internal audit functions to the extent such functions relate to the operations of the Fund.

The Audit Committee, in its capacity as a committee of the Board of Directors, shall be directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Fund.

The Audit Committee shall cause to be prepared and shall approve any reports required by the rules of the Securities and Exchange Commission (“SEC”) to be included in the Fund’s annual proxy statement.

The function of the Audit Committee is oversight; it is not the duty of the Committee to plan or conduct audits or to determine that the Fund’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent registered public accounting firm.

The Audit Committee shall consist of at least three directors, including a chairman, appointed by the Board of Directors upon the recommendation of the Nominating/Corporate Governance Committee. Audit Committee members may be removed and replaced by the Board at any time.

Each member of the Audit Committee shall satisfy the independence and financial literacy requirements of the applicable rules of the New York Stock Exchange (“NYSE”) and Section 10A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules promulgated thereunder.

At least one member of the Audit Committee shall be a person who has been determined by the Board of Directors to satisfy the definition of “audit committee financial expert” set forth in Instruction 2(b) to Item 3 of Form N-CSR promulgated by the SEC.

Members of the Audit Committee shall receive no compensation from the Fund other than (i) reimbursement of expenses and (ii) fixed fees established by the Board with respect to service on the Board and committees thereof and attendance at Board and committee meetings.

Because of the Audit Committee’s demanding role and responsibilities, and the time commitment attendant to Committee membership, no Audit Committee member may simultaneously serve on the audit committees of more than three public companies unless the Board of Directors determines that such simultaneous service will not impair the ability of such member to serve effectively on the Audit Committee of the Fund.

Except as expressly provided in this Charter, the Bylaws of the Fund, the Corporate Governance Guidelines of the Fund, the rules of the NYSE or any applicable law or regulation, the Audit Committee shall establish its own rules of procedure.

To carry out its purposes, the Audit Committee shall have the following responsibilities and powers:

Meet at least twice a year, or more frequently as circumstances may require.

Review and reassess the adequacy of this Charter at least annually and recommend any proposed changes to the Board of Directors for approval.

Review annually the Audit Committee’s own performance and report the results of such review to the Board of Directors.

Meet regularly with representatives of the Fund’s investment adviser, administrator and independent registered public accounting firm in separate executive sessions to review and discuss any issues arising from the administrator’s and independent registered public accounting firm’s perspective relating to the accounting, financial reporting and internal audit functions performed by the Fund and, where applicable, by service providers on behalf of the Fund.

Review with the Fund’s investment adviser, administrator and independent registered public accounting firm the adequacy and effectiveness of the accounting and financial controls of the Fund, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable or necessary.

Discuss with management the guidelines and policies that govern the process by which management assesses and manages the Fund’s major financial risk exposures.

Establish general policies governing the release (to analysts, rating agencies or the general public) of financial information regarding the Fund.

To the extent the Committee deems necessary or appropriate, request any officer of the Fund, or any employee or representative of the Fund’s administrator, investment adviser, outside counsel or independent registered public accounting firm to attend any meeting of the Audit Committee or to meet with any members of, or consultants to, the Committee.

Review with the Fund’s outside counsel any legal matters that the counsel believes may have a material impact on the Fund’s accounting and financial reporting policies or practices.

To the extent the Committee deems necessary or appropriate to carry out its duties, engage independent counsel and other advisers.

To the extent the Committee deems necessary or appropriate, conduct or authorize investigations into any matters within the scope of the Committee’s responsibilities.

Approve the establishment of 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 of the Fund’s administrator or investment adviser of concerns regarding questionable accounting or auditing matters.

Perform such other oversight functions as are assigned by law or regulation, NYSE rule, the Fund’s Charter or Bylaws, or the Board of Directors.

Determine the appropriate funding, to be provided by the Fund, for payment of (i) compensation to any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Fund, (ii) compensation to any independent counsel or other advisers retained by the Committee and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

In its capacity as a committee of the Board of Directors, be directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged (including resolution of disagreements between management and the accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Fund, i.e., each such independent registered public accounting firm shall report directly to the Audit Committee.

Pre-approve the scope, fees and terms of all audit and non-audit services provided by the Fund’s independent registered public accounting firm, as required by the provisions of Section 10A of the Exchange Act and the rules promulgated thereunder.

To the extent the Committee deems necessary or appropriate, delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals of audit and non-audit services, provided that the decisions of any member(s) to whom authority is so delegated shall be presented to the full Audit Committee at each of its scheduled meetings

Review the experience and qualifications of the lead partner of the independent registered public accounting firm’s audit engagement team.

Assure that the lead partner and concurring partner of the independent registered public accounting firm’s audit engagement team are rotated at least every five years as required by Section 10A of the Exchange Act.

Obtain and review a report from the independent registered public accounting firm at least annually regarding (1) the accounting firm’s internal quality-control procedures, (2) any material issues raised by the most recent 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, (3) any steps taken to deal with any such issues and (4) all relationships between the independent registered public accounting firm and the Fund.

As frequently as deemed necessary, evaluate the qualifications and performance of the independent registered public accounting firm, including considering whether the accounting firm’s quality controls are adequate, and taking into account the opinions of management and the Fund’s administrator.  

At least annually, evaluate the independence of the independent registered public accounting firm, including whether the provision of non-audit services is compatible with maintaining the accounting firm’s independence.

Discuss with the independent registered public accounting firm any communications between the Fund’s audit engagement team and the accounting firm’s national office respecting auditing or accounting issues presented by the engagement.

Discuss with management and the independent registered public accounting firm any accounting adjustments that were noted or proposed by the accounting firm but were passed (as immaterial or otherwise).

Review the reports of the independent registered public accounting firm mandated by Section 10A of the Exchange Act and obtain from the accounting firm assurance that no illegal acts (as defined in Section 10A of the Exchange Act) have been detected or have otherwise come to the attention of such accounting firm in the course of the audit.

Establish policies regarding the hiring of employees or former employees of the Fund’s independent registered public accounting firm by the Fund’s investment adviser or administrator.

Review and discuss with the Fund’s management and independent registered public accounting firm the Fund’s annual audited financial statements, including the matters required to be discussed pursuant to Statement of Auditing Standards No. 61, and the Fund’s semi-annual financial statements.

Review and discuss with the Board of Directors, management and the independent registered public accounting firm, as applicable, (1) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Fund’s selection or application of accounting principles, and major issues as to the adequacy of the Fund’s internal controls and any special audit steps adopted in light of material control deficiencies; (2) analyses prepared by management and/or the independent registered public accounting firm setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; (3) any material written communications between the independent registered public accounting firm and the Fund, such as any “management” or “internal control” letter or schedule of unadjusted differences, and the Fund’s response to such communications; (4) any problems, difficulties or differences encountered in the course of the audit work, including any disagreements with management or restrictions on the scope of the independent registered public accounting firm’s activities or on access to requested information and management’s response thereto; and (5) the effect of regulatory and accounting initiatives on the financial statements of the Fund.

Review and discuss with the independent registered public accounting firm the form of opinion the accounting firm proposes to render to the Fund’s Board and shareholders on the Fund’s financial statements.

Make recommendations to the Board of Directors regarding inclusion of the Fund’s audited financial statements in the Fund’s annual report to shareholders.

Review disclosures made by the Fund’s principal executive officer and principal financial officer regarding compliance with their certification obligations as required under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder, including the Fund’s disclosure controls and procedures and internal controls for financial reporting and evaluations thereof.

Assist the Board of Directors in fulfilling its good faith obligation under Section 2(a)(41) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), to determine the fair value of securities in the Fund’s portfolio for which market quotations are not readily available by reviewing, in consultation with the Fund’s independent registered public accounting firm, fair value pricing methodologies developed by the Fund’s management and recommending the same for adoption by the Board of Directors.

Ensure that the agreed-upon procedures for the production of basic maintenance reports on the Fund’s preferred stock are carried out.

Ensure that any necessary tax qualification tests relating to the Fund’s regulated investment company status are performed.

Keep regular minutes of Committee meetings and report the same to the Board of Directors when required.

Report to the Board of Directors on the Committee’s activities on a regular basis and make such recommendations for action by the Board as it may deem appropriate.

Cause to be prepared and approve any reports required by the rules of the SEC to be included in the Fund’s annual proxy statement.