SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by 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 Sec. 240.14a-11(c) or Sec. 240.14a-12
THE NEW IRELAND FUND, INC.
.................................................................................
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(set forth the amount on which the
filing fee is calculated and state how it was determined):
......................................................................
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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May 6, 2004
Dear Stockholder,
Your vote is important. Please take a moment to read this letter and vote.
New Ireland Fund's Stockholder Meeting will be held on June 8th and two
proposals on the agenda require a vote of the stockholders. Proposal 1 is for
the election of some of our Directors, and the Board recommends that you vote
FOR Proposal 1. Proposal 2, submitted by a stockholder, requests that the Board
open-end the Fund or take similar type action. The Board does not agree with
this Proposal and, accordingly, recommends that you vote AGAINST Proposal 2.
The reasons why the Board recommends that you vote AGAINST Proposal 2 are laid
out, in detailed form, in the enclosed Proxy Statement but the main reasons may
be summarized as follows:
o The Fund's investment objective is long-term capital appreciation.
Under the Proposal there would likely be a benefit to short-term
investors, at the expense of long-term investors, and we do not
believe that this makes sense.
o There is likely to be an increase in the Fund's expense ratio.
o There are likely to be accelerated capital gains tax obligations
for Stockholders.
o The Fund is likely to shrink in size, impacting on its
opportunities and thus its profitability and stockholder value.
It is also worth mentioning the strong performance of the Fund in its most
recent fiscal year and the first quarter of the current year. This, in
conjunction with the our active Share Repurchase Program under which we have
bought back almost 18% of the Fund's outstanding shares in the market, suggest
that now is not the time to take the actions suggested in Proposal 2.
As a result of the above, the Board believes that overall, Proposal 2 is not in
the best interests of the vast majority of stockholders and seeks your support
by voting AGAINST that Proposal.
Instructions on how to vote are on the proxy card included with this package.
Your vote is important - PLEASE VOTE.
Sincerely yours,
/s/ Peter Hooper
Chairman
THE NEW IRELAND FUND, INC.
C/O PFPC INC.
99 HIGH STREET, 27TH FLOOR
BOSTON, MASSACHUSETTS 02110
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-------------------------
To our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of The New Ireland Fund, Inc. (formerly, The Irish Investment Fund,
Inc.) (the "Fund"), a Maryland corporation, will be held on Tuesday, June 8,
2004 at 9:00 a.m. at the Harvard Club, 27 West 44th Street, New York, NY 10036,
for the following purposes:
1. To elect three (3) Directors of the Fund (Proposal 1).
2. To consider and act upon a stockholder proposal requesting the Board
to take steps necessary to open-end the Fund or otherwise enable
stockholders to realize net asset value for their shares (Proposal 2).
3. To consider and act upon any other business as may properly come
before the Meeting or any adjournment thereof.
These items are discussed in greater detail in the attached Proxy
Statement.
Only stockholders of record at the close of business on Monday, April 12,
2004 are entitled to notice of, and to vote at, the Meeting or at any
adjournments thereof.
Linda J. Hoard
Secretary
Dated: May 6, 2004
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, WE ASK THAT YOU PLEASE
COMPLETE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF
FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY CARD
PROMPTLY. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON THE
INSIDE COVER.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration.
3. All Other Accounts: The capacity of the individuals signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp...................................... ABC Corp.
(2) ABC Corp. .................................... John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer................... John Doe
(4) ABC Corp. Profit Sharing Plan ................ John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust .................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78............................ Jane B. Doe
CUSTODIAN OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA ............ John B. Smith
(2) Estate of John B. Smith ...................... John B. Smith, Jr., Executor
THE NEW IRELAND FUND, INC.
C/O PFPC INC.
99 HIGH STREET, 27TH FLOOR
BOSTON, MASSACHUSETTS 02110
ANNUAL MEETING OF STOCKHOLDERS
JUNE 8, 2004
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors of The New
Ireland Fund, Inc. (the "Fund") in connection with its solicitation of proxies
for use at the Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, June 8, 2004 at 9:00 a.m. at the Harvard Club, 27 West 44th Street, New
York, NY 10036 and at any adjournments thereof. The purpose of the Meeting and
the matters to be acted upon are set forth in the accompanying Notice of Annual
Meeting of Stockholders.
If the accompanying proxy is executed properly and returned by June 8,
2004 in time to be voted at the Meeting, shares represented by it will be voted
at the Meeting in accordance with the instructions on the proxy. If, however, no
instructions are specified, shares will be voted for the election of Directors
and against the stockholder proposal. If your shares are held though a broker,
your shares can be voted on the election of Directors in your broker's
discretion. No broker may vote your shares on the stockholder proposal without
your specific instructions. If your broker votes your shares on some, but not
all, of the proposals, the votes will be "broker non-votes" for any proposal on
which they are not voted. Broker non-votes will have no effect on the election
of Directors or the stockholder proposal. A proxy may be revoked at any time
prior to the time it is voted by written notice to the Secretary of the Fund or
by attendance at the Meeting.
A quorum of the Fund's shareholders is required to properly conduct the
business of the Meeting. Under the By-Laws of the Fund, a quorum is constituted
by the presence in person or by proxy of stockholders entitled to cast a
majority of the votes entitled to be cast at the Meeting. In the event a quorum
is not present at the Meeting, the holders of a majority of the stock present in
person or by proxy will have the power to adjourn the Meeting, without notice
other than an announcement at the Meeting, until the requisite amount of stock
entitled to vote at the Meeting is present. In the event a quorum is present at
the Meeting but sufficient votes to approve any of the proposed items are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. A stockholder vote may be
taken on one or more of the proposals in this proxy statement prior to such
adjournment if sufficient votes have been received and it is otherwise
appropriate. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting in person or by proxy and the
persons named as proxies will vote those proxies which they are entitled to vote
FOR or AGAINST any such proposal in their discretion. Absent the establishment
of a subsequent record date and the giving of notice to the holders of record
thereon, the adjourned Meeting will take place not more than 120 days after the
original record date. At such adjourned Meeting, any business may be transacted
which might have been transacted at the original Meeting.
The close of business on April 12, 2004 has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Meeting. On that date, the Fund had 4,646,098 shares of common stock outstanding
and entitled to vote. Each share will be entitled to one vote at the Meeting. It
is expected that the Notice of Annual Meeting, proxy statement, and form of
proxy will be mailed to stockholders on or about May 6, 2004.
The expense of solicitation will be borne by the Fund and will include
reimbursement to brokerage firms and others for expenses in forwarding proxy
solicitation material to beneficial owners. Georgeson Shareholder Communications
Inc. has been retained to act as a proxy solicitor for a fee of $15,000. The
solicitation of proxies will be largely by mail, but may include, without cost
to the Fund, telephonic, telegraphic, or oral communications by regular
employees of the Fund's Investment Advisor.
THE ANNUAL REPORT OF THE FUND, INCLUDING AUDITED FINANCIAL STATEMENTS FOR
THE FISCAL YEAR ENDED OCTOBER 31, 2003, IS AVAILABLE UPON REQUEST, WITHOUT
CHARGE, BY WRITING TO THE NEW IRELAND FUND, INC., C/O PFPC, INC. 99 HIGH STREET,
27TH FLOOR, BOSTON, MASSACHUSETTS 02110 OR BY CALLING 1-800-468-6475.
The date of this Proxy Statement is May 6, 2004.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL/RECORD OWNERS
To the knowledge of management of the Fund and its Board, the following
shareholders or "group", as the term is defined in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act"), beneficially owned, or were
owners of record of, more than 5% of the Fund's outstanding shares as of April
12, 2004.
SHAREHOLDER NAME AND ADDRESS AMOUNT AND NATURE OF OWNERSHIP PERCENT OF SHARES
---------------------------- ------------------------------ -----------------
Wachovia Corporation*
One Wachovia Center 591,538 (beneficial) 12.73% @ 4/12
Charlotte, North Carolina 28288-0137
Bank of Ireland EUT Smaller Equities Fund** 338,539 (beneficial) 7.15%
c/o Bank of Ireland Asset Management Limited
40 Mespil Road, Dublin 4, Ireland
* As stated in a Schedule 13G filed with the Securities and Exchange Commission
on February 12, 2004.
** As stated in a Schedule 13D filed with the Securities and Exchange Commission
on April 30, 2004.
Bank of Ireland Asset Management Limited ("BIAM Ltd."), which is a
wholly owned subsidiary of the Governor and Company of the Bank of Ireland and
an affiliate of Bank of Ireland Asset Management (U.S.) Limited, the Fund's
Investment Adviser, has advised the Fund as follows:
From 1990 to 1995, eight foreign funds managed by BIAM Ltd. (including
the Bank of Ireland EUT Smaller Equities Fund) invested in the shares
of the Fund by making secondary market purchases over the securities
exchange on which the shares are listed. The percentage ownership of
shares by each of the foreign funds, and all of the foreign funds in
the aggregate, remained below 5% until 1995 when the aggregate
ownership interest amounted to approximately 5.2% of the Fund's
outstanding shares. In 1997, all of the Fund shares so held by the
foreign funds managed by BIAM Ltd. were sold to, and purchased by, the
Bank of Ireland EUT Smaller Equities Fund. The shares continue to be
owned by this fund and, as a result of the share repurchase program
instituted by the Fund in 2000 and by dividend reinvestment, the
percentage of beneficial ownership has increased to 7.15% of the Fund's
outstanding shares. This ownership constitutes less than 2% of the
total assets the Bank of Ireland EUT Smaller Equities Fund. The shares
owned by the Bank of Ireland EUT Smaller Equities Fund (and previously
owned by the several foreign funds managed by BIAM Ltd.) were never
acquired by any of them to influence or control the Fund. No agreement,
contract or understanding existed or exists to act in any concerted
effort to hold sway over any proposal the Fund might put before its
shareholders. The shares beneficially owned by Bank of Ireland EUT
Smaller Equities Fund will be voted in respect of each proposal in the
same proportions as all other shares of the Fund are voted.
As of the record date, Bank of Ireland Asset Management (U.S.) Limited,
Investment Advisor to the Fund, held beneficially 11,548 shares or .25% of
common stock outstanding. Bank of Ireland Asset Management (U.S.) Limited has
advised the Fund that these shares will be voted in respect of each proposal in
the same proportions as all other shares of the Fund are voted.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Meeting, three Directors will be elected. Pursuant to the Fund's
By-laws, the terms of office of the Directors are staggered. The Board of
Directors is divided into three classes, designated: Class I, Class II, and
Class III. Class I consists of Peter J. Hooper and George G. Moore, Class II
consists of Denis P. Kelleher and James M. Walton, and Class III consists of
James J. Boyle and Denis Curran. The two Directors in Class II are being
considered for election at this Meeting. In addition, Mr. Moore is being
considered for election as a Class I Director of the Fund. Mr. Moore was
appointed to the Board of Directors by unanimous consent on February 20, 2004.
Mr. Moore will hold office for an initial term of two years. If elected, Messrs.
Kelleher and Walton will hold office for a term of three years and until their
successors are elected and qualified. It is the intention of the persons named
in the accompanying proxy to vote, on behalf of the stockholders, for the
election of Denis P. Kelleher, James M. Walton and George G. Moore.
The nominees have consented to being named in this Proxy Statement and to
serve as Directors if elected. The Board of Directors has no reason to believe
that any nominee will become unavailable for election as a Director, but if that
should occur before the Meeting, proxies will be voted for such other person as
the Board of Directors may recommend.
The Directors and officers of the Fund are listed below, together with
their respective positions, and a brief statement of their principal occupations
during the past five years and, in the case of Directors, their positions with
certain international organizations and publicly-held companies.
NUMBER OF
---------
TERM OF PORTFOLIOS IN
------- -------------
POSITION(S) OFFICE AND FUND COMPLEX
----------- ---------- ------------
HELD WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) AND OTHER OVERSEEN BY
------------- --------- --------------------------------- -----------
NAME ADDRESS, AND AGE FUND TIME SERVED DIRECTORSHIPS DURING PAST FIVE YEARS DIRECTOR
--------------------- ---- ----------- ------------------------------------ --------
INDEPENDENT
DIRECTORS*:
Peter J. Hooper, 64 Director and Since 1990 President of Hooper 1
Westchester Financial Chairman of the Associates-Consultants (1994 to
Center, Suite 1000 Board present); Director, The Ireland United
50 Main Street States Council for Commerce and
White Plains, NY 10606 Industry (1984 to present); Director,
Flax Trust - America
(1988 to present);
Director, Children's
Medical Research
Foundation (1987 to
present).
----------------------------------------
* Each Director shall serve until the expiration of his current term and until
his successor is elected and qualified.
2
NUMBER OF
---------
TERM OF PORTFOLIOS IN
------- -------------
POSITION(S) OFFICE AND FUND COMPLEX
----------- ---------- ------------
HELD WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) AND OTHER OVERSEEN BY
------------- --------- --------------------------------- -----------
NAME ADDRESS, AND AGE FUND TIME SERVED DIRECTORSHIPS DURING PAST FIVE YEARS DIRECTOR
--------------------- ---- ----------- ------------------------------------ --------
James J. Boyle, 64 Director Since 2000 Chairman and President of Cardinal 1
50 Main Street Resources, Inc. (oil and gas
White Plains, NY 10606 production) (1975 to present);
Director, Standard Microsystems
Corporation (1999 to 2003); Trustee,
Alvernia College (1998 to present).
Denis P. Kelleher, 65 Director Since 1991 Chief Executive Officer, Wall Street 1
17 Battery Place Access-Financial Services (1981 to
New York, NY 10004 present); Director, SI Bank & Trust
(1992 to present); Chairman and Member
of the Board of Trustees St. John's
University (1998 to present).
George G. Moore, 53 Director Since 2004 Chairman/Chief Executive Officer, 1
8010 Towers Crescent Drive TARGUSinfo (1993 to present);
Vienna, VA 22182 Chairman, AMACAI Information Corp.
(2001 to present).
James M. Walton, 73 Director Since 1990 Chairman, Vira I. Heinz Endowment 1
Room 3902 (1988 to present); Director, FireFly,
525 William Penn Place Inc. (1988 to present).
Pittsburgh, PA 15219
INTERESTED
DIRECTOR*:
Denis Curran, 56** Director and Since 2000 Director and President - 1
75 Holly Hill Lane President*** International, Bank of Ireland Asset
Greenwich, CT 06830 Management Limited (1999 to present);
Director, Bank of Ireland Asset
Management (U.S.) Limited (1999 to
present); Director, Iridian Asset
Management (2002 to present).
OFFICERS***:
Denis Curran see description above
Lelia Long Treasurer Since 2002 Senior Vice President, Bank
75 Holly Hill Lane of Ireland Asset Management
Greenwich, CT 06830 (U.S.) Limited (1999 to
present); Director, Iridian
Asset Management (2002 to
present).
Linda J. Hoard, 56 Secretary Since 1998 Vice President and Senior
99 High Street Counsel, PFPC Inc. (2002 to
Boston, MA 02110 present); Vice President,
PFPC Inc. (1998 to present).
---------------------
* Each Director shall serve until the expiration of his current term and until
his successor is elected and qualified.
** Mr. Curran is deemed to be an "interested" Director because of his
affiliation with the Investment Adviser.
*** Each officer of the Fund will hold office until a successor has been elected
by the Board of Directors.
3
BENEFICIAL OWNERSHIP OF EQUITY SECURITIES IN FUND FOR EACH DIRECTOR AND NOMINEE
FOR ELECTION AS DIRECTOR:
NAME OF DIRECTOR DOLLAR RANGE OF EQUITY AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED
---------------- ---------------------- -------------------------------------------------------------
SECURITIES HELD IN THE INVESTMENT COMPANIES OVERSEEN BY DIRECTOR IN FAMILY OF
---------------------- ------------------------------------------------------
FUND* INVESTMENT COMPANIES**
----- ----------------------
Independent Directors &
-----------------------
Nominees
--------
James J. Boyle E E
Peter J. Hooper C C
Denis P. Kelleher E E
George G. Moore D D
James M. Walton C C
Interested Directors
--------------------
Denis Curran A A
_______________________
* KEY TO DOLLAR RANGES
A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. Over $100,000
** AS OF APRIL 12, 2004 THE FUND'S FAMILY OF INVESTMENT COMPANIES CONSISTED
ONLY OF THE FUND.
As of April 12, 2004, none of the independent directors or their immediate
family members owns beneficially or of record securities in the Fund's
Investment Advisor or entity directly or indirectly controlling, controlled by,
or under common control with the Fund's Investment Advisor.
COMPENSATION
The following table sets forth certain information regarding the
compensation of the Fund's Directors and officers. The Fund currently pays each
of its Directors who is not a managing director, officer, or employee of the
Fund's Investment Advisor or any affiliate thereof an annual fee of $11,500 plus
$1,000 for each meeting of the Board of Directors or a Committee of the Board
attended in person or via telephone and any stockholder meeting attended in
person not held on the same day as a meeting of the Board. The Fund pays the
Chairman of the Board of Directors an additional $20,000 annually and pays the
Chairman of the Audit Committee an additional $1,000 per meeting attended of the
Audit Committee. In addition, each Director is also reimbursed for travel and
certain out-of-pocket expenses. Officers of the Fund who are employed by PFPC
Inc. ("PFPC"), the Fund's administrator, receive reimbursement from the Fund for
travel to and from Board meetings. No Director received compensation from the
Fund in excess of $60,000 for the fiscal year ended October 31, 2003.
COMPENSATION SCHEDULE FOR THE
FISCAL YEAR ENDED OCTOBER 31, 2003
----------------------------------
PENSION OR ESTIMATED
RETIREMENT ANNUAL
AGGREGATE BENEFITS ACCRUED BENEFITS TOTAL COMPENSATION
COMPENSATION FROM AS PART OF FUND UPON FROM THE FUND
NAME OF PERSON AND POSITION* THE FUND EXPENSES RETIREMENT PAID TO DIRECTORS
---------------------------- -------- -------- ---------- -----------------
Peter J. Hooper............. $36,625 0 N/A $36,625
Chairman of the Board
James J. Boyle.............. $20,500 0 N/A $20,500
Director
Denis Curran**.............. N/A N/A N/A N/A
Director
Denis P. Kelleher........... $17,500 0 N/A $17,500
Director
James M. Walton............. $18,500 0 N/A $18,500
Director
_____________________________
* George Moore was not appointed to the Board until February 20, 2004
** Mr. Curran is deemed to be an "interested" Director because of his
affiliation with the Investment Advisor.
4
There were four regular meetings of the Board of Directors held during the
fiscal year ended October 31, 2003. Each Director attended at least 75% of the
aggregate number of meetings of the Board and of meetings of Board Committees on
which that Director served. Aggregate fees and expenses paid to the Board of
Directors for the fiscal year ended October 31, 2003 were $93,125.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE/AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Directors in its
oversight of the Fund's financial reporting process. The Audit Committee
operates pursuant to a Charter that was most recently approved by the Board on
March 9, 2004. A copy of the Audit Committee Charter is attached hereto as
Exhibit A. As set forth in the Charter, management of the Fund is responsible
for the preparation, presentation and integrity of the Fund's financial
statements, and for the procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The independent auditors are
responsible for auditing the Fund's financial statements and expressing an
opinion as to their conformity with generally accepted accounting principles.
The Audit Committee consists of Messrs. Boyle, Hooper, Moore and Walton,
all of whom are "independent" Directors of the Fund as defined in the listing
standards of the New York Stock Exchange. The Audit Committee makes
recommendations to the full Board of Directors with respect to the engagement of
independent accountants and reviews with the independent accountants the plan
and results of the audit engagement and matters having a material effect on the
Fund's financial operations. The Audit Committee met three times during the
fiscal year ended October 31, 2003.
In performing its oversight function, the Audit Committee has reviewed and
discussed the audited financial statements with management and the independent
auditors. The Audit Committee has discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as modified or supplemented. The Audit
Committee has also received the written disclosures from the independent
auditors required by Independence Standards Board Standard No. 1, Independent
Discussions with Audit Committees, as currently in effect. Finally, the
Committee has considered whether the provision by the previous independent
auditors to the Fund of information technology services relating to financial
information design and implementation, internal audit and other nonaudit
services to the Fund, or of professional services to the Fund's Investment
Advisor and those affiliates thereof that provide services to the Fund, is
compatible with maintaining the auditors' independence and has discussed with
the auditors the auditors' independence.
The members of the Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the Audit Committee rely without independent verification on the information
provided to them and on the representations made by management and the
independent auditors. Accordingly, the Audit Committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not assure that
the audit of the Fund's financial statements has been carried out in accordance
with generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the Fund's auditors are in fact "independent".
Based upon the reports and discussion described in this report, and
subject to the limitations on the role and responsibilities of the Audit
Committee referred to above and in the Charter, the Audit Committee recommended
to the Board that the audited financial statements be included in the Fund's
Annual Report for the year ended October 31, 2003.
Submitted by the Audit Committee of the Fund's Board of Directors
James J. Boyle
Peter J. Hooper
George G. Moore
James M. Walton
NOMINATING COMMITTEE
The Board of Directors has a Nominating Committee consisting of Messrs.
Hooper, Kelleher, Moore and Walton, which is responsible for recommending
qualified candidates for election to the Board of Directors of the Fund in the
event a position is vacated or created. Each member of the Nominating Committee
is independent, as that term is defined by the NYSE listing standards. The
Nominating Committee would consider recommendations by shareholders if a vacancy
were to exist. Such recommendations should be forwarded to the Secretary of the
Fund. The Nominating Committee of the Fund did not meet during the Fund's fiscal
year ended October 31, 2003; however, the Nominating Committee met in January
2004 to consider the nomination of George Moore. The Nominating Committee does
not have a Charter, but will take into consideration such factors as it deems
appropriate when nominating candidates for election to the Board of Directors.
These factors may include judgment, skill, diversity, experience with investment
companies and other organizations of comparable purpose, complexity, size and
subject to similar legal restrictions and oversight, the interplay of the
candidate's experience with the experience of other Board members, and the
extent to which the candidate would be a desirable addition to the Board and any
committees thereof. The Nominating Committee will treat all equally qualified
candidates in the same manner. The Nominating Committee may modify its policies
and procedures for director nominees and recommendations in response to changes
in the Fund's circumstances, and as applicable legal or listing standards
change.
5
OTHER COMMITTEES
The Board of Directors of the Fund has a Compensation Committee, which is
responsible for ensuring that the Directors' compensation is competitive as
compared to its peers, so that the Fund may continue to retain and attract high
caliber directors. The members of the Compensation Committee are Messrs. Boyle,
Curran, Kelleher, and Walton. The Compensation Committee met once during the
Fund's fiscal year ended October 31, 2003.
The Board of Directors has a Valuation Committee consisting of Messrs.
Boyle, Curran, Moore and Kelleher, which is responsible for monitoring the
valuation of unlisted securities by the Fund's Investment Advisor and for making
such determination as necessary should changes in an approved valuation be
recommended during the period between Board meetings. The Valuation Committee of
the Fund met once during the Fund's fiscal year ended October 31, 2003. The Fund
does not have a formal policy regarding attendance of Directors at the Annual
Meeting of Stockholders; however, all of the Directors of the Fund (except
George G. Moore, who was not a Director at that time) attended the June 10, 2003
Annual Meeting of Stockholders.
REQUIRED VOTE
In the election of the Director of the Fund, the candidate in order to be
elected requires a plurality of the votes cast by the holders of shares of the
Fund represented at the Meeting, if a quorum is present.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" PROPOSAL NO. 1.
STOCKHOLDER PROPOSAL
(PROPOSAL NO. 2)
A stockholder has informed the Fund that it intends to submit a
proposal at the Annual Meeting and has requested that it be included in this
year's proxy statement. The Board of Directors unanimously recommends that you
vote AGAINST the proposal. The reasons for the Board's opposition to the
proposal are set forth in the Board's statement in opposition that appears
below, immediately following the proposal and its supporting statement. The Fund
will provide promptly to any stockholder, upon receipt of any oral or written
request, the address of the stockholder submitting the proposal and the number
of shares of the Fund's common stock held by it.
A. THE STOCKHOLDER'S PROPOSAL AND SUPPORTING STATEMENT
"RESOLVED: The shareholders of The New Ireland Fund (the "Fund")
request the Board of Directors to promptly take the steps
necessary to open end the Fund or otherwise enable
shareholders to realize net asset value ("NAV") for their
shares."
Supporting Statement
"The Fund has traded at a double-digit discount to its net asset value
("NAV") for a long time. On September 30, 2003, the discount stood at 18.7%.
That means that a shareholder wishing to sell shares at 4 p.m. on that date
would only receive about $12.43 per share, the closing market price. If the Fund
were operating as an open-end fund, a shareholder could redeem his shares for
their NAV on September 30th, which was $15.28 per share.
Since $15.28 is so much more that $12.43, open-ending the Fund means a
higher stock price for every shareholder. If you would like to see the Fund's
discount eliminated, we urge you to vote in favor of this proposal."
B. STATEMENT OF OPPOSITION
The stockholder's proposal seeks to address the discount from net asset
value at which the Fund's shares have traded in recent years. In recognition of
its responsibility to address the level of the discount, the Board on an ongoing
basis has considered, and will continue to consider, ways in which the discount
may be reduced.
The Board strongly believes; however, that the stockholder's proposal
"to realize net asset value" must be viewed through the lens of: the Fund's
fundamental long term investment objective; its elected structure as a
closed-end fund and the reasons for choosing that structure; and its benefits to
stockholders through its historical performance and the implementation of its
share repurchase program.
The Board has weighed these objectives, features and benefits against
the perceived detriments to the long-term interests of the Fund and its
stockholders of converting to an open-end structure or undertaking some other
extreme means to reduce the discount, such as conducting a tender offer for all
or a substantial portion of the outstanding shares of the Fund. On balance, the
Board strongly believes that the actions suggested by the proposing stockholder
should not be taken at this time.
6
Investment Objective; Closed-end Fund Features; Fund Performance and Benefits.
------------------------------------------------------------------------------
The Fund's Investment Objective. The Board believes that any actions
taken in respect of the Fund's discount to net asset value must be judged solely
in light of the best interests of the Fund, and that it is in the Fund's best
interests to take only such actions as are consistent with its fundamental
investment objective. As you should be aware, the Fund's investment objective is
long-term capital appreciation through investment primarily in equity securities
of Irish companies. Because the Fund's stated investment objective is to provide
value over a period of time, the Board believes that it has no proper authority
to support actions that may provide some stockholders with a short-term,
one-time benefit at the expense, or to the detriment, of stockholders who have
chosen to invest in the Fund based on its stated investment objective that
emphasizes longer-term results.
Closed-end Structure. The Board believes that Fund stockholders derive
many benefits from the Fund's closed-end structure, and that these benefits
would be lost if the Fund were to convert to an open-end fund or conduct a
large-scale tender offer for its shares. The closed-end structure allows the
Fund to take a more long-term perspective on investments and to maintain a
stable pool of assets, without having to invest assets in low-yielding cash or
to liquidate assets, sometimes at inopportune times, to meet redemption
requests. This allows the Fund to buy more illiquid holdings which can and have
benefited the Fund's performance. The Board believes that the closed-end
structure is especially well suited for investing primarily in the stocks of a
single foreign country. The Board reminds investors of the narrow investment
focus of the Fund on the Irish securities market and the comparatively limited
liquidity of that market, particularly in respect of medium and smaller
capitalization Irish companies. In a closed-end structure, this investment focus
and level of illiquidity does not impede the Fund's investment objective. The
closed-end structure frees the portfolio manager to concentrate on investments,
rather than holding part of the assets in easier-to-sell stocks or in cash to
meet redemptions. In addition, cash can be raised to take advantage of
anticipated market declines without fear that it will instead have to be used to
satisfy the stockholder redemptions in open-end funds that normally accompany
market reversals.
Because closed-end funds need not engage in many of the stockholder
services normally required of open-end funds and do not have the same marketing
and communication activities, certain costs relating to stockholder servicing
activity can be kept to a minimum. The Board is committed to minimizing the
Fund's overall expenses, as evidenced by the significant actions it has taken
over the past twelve to fifteen months to reduce its expense ratio. The Board is
convinced that closed-end funds can be run more cost effectively than open-end
funds and that these savings, along with the additional flexibility in managing
fund assets, contribute to additional returns to be realized over time as
compared with equivalent open-end funds.
The vast majority of closed-end country funds sell at discounts. A fund
that repurchases its own shares at a discount can benefit long-term stockholders
in two ways. First, the net asset value is automatically increased at no
additional risk. Second, the supply of shares available for sale at a discount
is reduced, and this can create price pressure which may reduce the discount and
enhance share value. While the extra liquidity may benefit stockholders who
choose to sell their shares, the greatest value of an ongoing buyback program
accrues to long-term stockholders. The achievements of the Fund's own share
repurchase program are discussed below.
The closed-end structure is fundamentally different from an open-end
structure, or some other structure or action that provides net asset value on
demand. The Board believes that attempts to deliver net asset value to a
minority of stockholders who wish to exit the Fund may well destroy or diminish
the advantages otherwise enjoyed by the remaining stockholders. At this time,
the Board remains fully committed to realizing the potential of the Fund without
changing its fundamental nature.
Performance of the Fund. The Board believes that the advantages of the
closed-end structure and the resulting investment flexibility afforded the
Fund's Investment Advisor have been reflected in the Fund's excellent
performance, both recently and historically. For its fiscal year ended October
31, 2003, the Fund's net asset value increased 47.55%, from $11.04 to $16.29.
For the year, the Fund outperformed most of the funds in its Western European
peer group, and it was the top performer within this peer group in terms of its
3, 5 and 10 year performance. The Board believes that the Fund's performance,
particularly over the long-term, continues to be the soundest endorsement of the
Fund's elected closed-end structure in light of its investment objective of
long-term capital appreciation.
Share Repurchase Program. In recognition of the discount at which the
Fund's shares have traded, the Board has instituted its Share Repurchase Program
to ameliorate the impact of the discount on stockholders. The Board believes
that this program has added liquidity to the market for the benefit of investors
wishing to sell their Fund shares, while benefiting continuing stockholders by
increasing the Fund's net asset value. Since the commencement of the program in
May 2000, the Fund has repurchased 1,019,250 shares as of the end of February
2004, constituting 17.64% of the Fund's shares issued at commencement, as well
as those issued in lieu of dividends in 2000 and 2001. During the fiscal year
ended October 31, 2003, the Fund repurchased and retired 194,450 shares at a
cost of $2,056,220, which represented a 3.91% reduction of shares outstanding at
October 31, 2002. As a result of the purchase of these shares at a discount to
net asset value, continuing stockholders receive a positive benefit to the net
asset value of their shares.
7
Potential Adverse Consequences of Implementing the Stockholder's Proposal.
--------------------------------------------------------------------------
The Board believes that the stockholder's proposal is intended to force
the Board to take one or more of the following actions: convert the Fund to an
open-end fund; conduct a tender offer for all or a substantial part of the
Fund's shares; or liquidate the Fund. In the Board's view, any of these
alternatives would be fundamentally inconsistent with the best interests of the
Fund. Each alternative would disrupt the Fund's investment process, which to
date has had long-term success; would impose costs and burdens on those
stockholders who wish to remain investors in the Fund and possibly on all
stockholders; and, ultimately, would be likely to necessitate liquidation of the
Fund. The Board believes that eliminating the possibility of a discount would
not justify the fundamental adverse changes that a conversion or other radical
action in respect of the Fund would entail. The Board's key concerns, with
regard to the adverse changes regarding the Fund's size, expense ratio, capital
gains, investment operations and stockholder value, are outlined below.
Adverse Impact on the Fund's Size and Expense Ratio. The Board of
Directors is concerned about the impact of open-ending or a large scale tender
offer on the Fund's expenses because either could expose the Fund to the risk of
a substantial reduction in its size. These actions would likely lead to a
substantially higher Fund expense ratio because the Fund's fixed expenses - such
as custody, administrative and accounting, audit and legal expenses - would be
spread across a substantially smaller asset base. A decrease in the Fund's size
could result in a decision by the Board to terminate and liquidate the Fund, or
a decision by the Fund's Investment Advisor not to continue to act in that
capacity, if the amount of the Fund's assets were reduced such that it was no
longer considered economically feasible for the Fund to continue to carry on its
business.
Capital Gains. The sale of the Fund's portfolio securities to enable
the Fund to generate cash to meet redemption requests of stockholders or to
repurchase shares in a tender offer would result in the Fund realizing any
capital gains inherent in the securities sold. These capital gains would also
have to be distributed to the stockholders who choose not to redeem or to tender
their shares. As a result, continuing stockholders would receive capital gains
distributions and be obliged to pay taxes in order to enable other stockholders
to redeem or tender their shares. The Board does not believe stockholders who
choose to remain in the Fund should be subject to such taxation in order to
accommodate the interests of those short-term stockholders who redeem or tender
their shares.
Detriments to Investment Operations and Stockholder Value. In the event
of significant redemptions in a Fund conversion or repurchases in a tender
offer, the share prices of the core portfolio securities that the Fund would
need to liquidate would likely be depressed, thereby reducing the Fund's net
asset value to the detriment of all stockholders. Also, in view of redemption or
repurchase pressure, the Fund would need to hold a substantial portion of its
assets in short-term cash reserves. This would likely be harmful to stockholder
returns because over time the returns of equity investments tend to far exceed
the returns of short-term money market investments and other cash equivalents.
Conclusion.
-----------
Because the Board has and will continue to evaluate the advantages and
disadvantages of the Fund's structure as a closed-end investment company and
intends to continue its present share repurchase program for the benefit of all
stockholders, the Board believes that it is not necessary or in the best
interests of the Fund to adopt the resolution being proposed by the stockholder.
Accordingly,
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"AGAINST" PROPOSAL NO. 2.
ADDITIONAL INFORMATION
INVESTMENT ADVISOR AND ADMINISTRATOR
The Fund's advisory structure provides a multinational arrangement for
furnishing management skills and investment advice to pursue the Fund's
investment objective of investing primarily in equity securities of Irish
corporations. Bank of Ireland Asset Management (U.S.), Limited ("BIAM"), an
Irish company registered as an investment advisor under the U.S. Investment
Advisers Act of 1940, acts as the Fund's Investment Advisor. BIAM's office in
the United States is located at 75 Holly Hill Lane, Greenwich, Connecticut
06830.
PFPC Inc., the Fund's Administrator, located at 99 High Street, 27th
Floor, Boston, Massachusetts 02110, provides administration services to the
Fund.
INDEPENDENT ACCOUNTANT
At a meeting held on December 10, 2003, upon the recommendation of the
Audit Committee, a majority of the Directors who are not "interested persons" of
the Fund, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act), selected Grant Thornton LLP ("Grant Thornton"), 60 Broad Street, New
York, NY 10004 as independent auditors for the Fund for the fiscal year ending
October 31, 2004. The selection of Grant Thornton was ratified by the entire
Board. Grant Thornton was also the independent auditor for the Fund for the
fiscal year ended October 31, 2003. Grant Thornton has advised the Fund that, to
the best of its knowledge and belief, as of the record date, no Grant Thornton
professional had any direct or material indirect ownership interest in the Fund
inconsistent with independent professional standards pertaining to accountants.
It is expected that representatives of Grant Thornton will not be present at the
Meeting, but will be available by telephone to answer any questions that may
arise. In reliance on Rule 32a-4 under the 1940 Act, the Fund is not seeking
shareholder ratification of the selection of Grant Thornton as independent
auditors.
8
PricewaterhouseCoopers LLP ("PWC") served as independent accountants for
the Fund. Upon the appointment of Grant Thornton, PWC was released as
independent accountant effective as of October 19, 2003. PWC's reports on the
financial statements for the two years immediately preceding their release
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. During the two
fiscal years immediately preceding PWC's release, there were no disagreements
with such accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
Set forth in the table below are audit fees billed to the Fund by PWC and
Grant Thornton for professional services rendered to the Fund for the fiscal
years ended October 31, 2002 and October 31, 2003. There were no other fees
billed by either firm to the Fund
Fiscal Year Ended Audit Fees Audit-Related Fees Tax Fees* All Other Fees**
----------------- ---------- ------------------ --------- ----------------
10/31/2002 $31,500 - - $ 12,600,000
10/31/2003 $31,500 - $2,500 -
* Fees billed to the Fund in connection with tax consulting services, including
the review of the Fund's income tax returns.
** Fees for non-audit related services, including transaction services, taxation
services and consultancy that were billed by PWC to the Fund's Investment
Advisor or its affiliates.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the of 1934 Act, as amended, and Section 30(h) of the
1940 Act, and the rules thereunder, require that the Fund's Directors and
officers, certain persons affiliated with the Investment Advisor, and persons
who own more than 10% of a registered class of the Fund's securities, file
reports of ownership and changes of ownership with the SEC and, in some cases,
the New York Stock Exchange. Directors, officers, and greater than 10%
shareholders are required by SEC regulations to furnish the Fund with copies of
all Section 16(a) forms they file.
Based solely upon the Fund's review of the copies of such forms it
receives and written representations from certain of such persons, the Fund
believes that during the Fund's fiscal year ended October 31, 2003 these persons
complied with all such applicable filing requirements.
BROKER NON-VOTES AND ABSTENTIONS
A proxy on shares held by brokers or nominees which (a) is properly
executed and returned accompanied by instructions to withhold authority to vote,
or (b) as to which (i) instructions have not been received from the beneficial
owners or the persons entitled to vote and (ii) the broker or nominee does not
have discretionary voting power on a particular matter, represents a broker
"non-vote". Proxies that reflect abstentions or broker non-votes (collectively,
"abstentions") will be counted as shares that are present and entitled to vote
on the matter for purposes of determining the presence of a quorum. Under
Maryland law, abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining the "votes cast" on a proposal.
The election of Directors (Proposal 1) requires that each successful
candidate receives a plurality of the votes cast at the Meeting; therefore,
abstentions will be disregarded.
Stockholders of the Fund will be informed of the voting results of the
Meeting in the Fund's Annual Report for the year ending October 31, 2004.
OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders arise,
including any question as to an adjournment of the Meeting, the persons named in
the enclosed proxy will vote thereon according to their best judgment in the
interests of the Fund.
STOCKHOLDER PROPOSALS
A stockholder's proposal intended to be presented at the Fund's Annual
Meeting of Stockholders to be held in 2005 must be received by the Fund on or
before December 20, 2004 in order to be included in the Fund's proxy statement
and proxy relating to that meeting.
Linda J. Hoard
Secretary
Dated: May 6, 2004
--------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO NOT
EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE THEIR SHARES VOTED ARE
REQUESTED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
--------------------------------------------------------------------------------
9
EXHIBIT A
THE NEW IRELAND FUND, INC.
AUDIT COMMITTEE CHARTER
I. COMPOSITION OF THE AUDIT COMMITTEE: The Audit Committee of The New
Ireland Fund, Inc. (the "Company") shall be comprised of at least three
directors, each of whom the Board has determined has no material
relationship with the Company or its investment adviser, administrator
or custodian and each of whom is otherwise "independent" under the
rules of the New York Stock Exchange, Inc., the Sarbanes-Oxley Act of
2002 and the rules promulgated thereunder. The Board shall also
determine that each member is "financially literate," and that one
member of the Audit Committee has "accounting or related financial
management expertise," as such qualifications are interpreted by the
Board of Directors in its business judgment, and whether any member of
the Audit Committee is an "audit committee financial expert," as
defined by rules of the Securities and Exchange Commission (the "SEC").
If the Board has determined that a member of the Audit Committee is an
audit committee financial expert, it may presume that such member has
accounting or related financial management expertise.
No director may serve as a member of the Audit Committee if such
director serves on the audit committees of more than two other public
companies unless the Board of Directors determines that such
simultaneous service would not impair the ability of such director to
effectively serve on the Audit Committee, and discloses this
determination in the Company's annual proxy statement. No member of the
Audit Committee may receive, directly or indirectly, any consulting,
advisory or other compensatory fee from the Company other than (i)
director's fees; (ii) pension or other deferred compensation for prior
service that is not contingent on future service; and (iii) any other
regular benefits that other directors receive.
Members shall be appointed by the Board, and shall serve at the
pleasure of the Board and for such terms or terms as the Board may
determine.
The Board shall designate one member of the Audit Committee as its
chairperson. In the event of a tie vote on any issue, the chairperson's
vote shall decide the issue.
II. PURPOSES OF THE AUDIT COMMITTEE: The purposes of the Audit Committee
are to:
1. assist Board oversight of (i) the integrity of the Company's
financial statements, (ii) the Company's compliance with legal
and regulatory requirements, (iii) the independent auditors'
qualifications and independence, and (iv) the performance of
the independent auditors and the Company's internal audit
function; and
2. prepare the report required to be prepared by the Audit
Committee pursuant to the rules of the SEC for inclusion in
the Company's annual proxy statement.
The function of the Audit Committee is oversight. The management of the
Company, including the service providers so contractually obligated,
are responsible for the preparation, presentation and integrity of the
Company's financial statements. Management and applicable service
providers are responsible for maintaining appropriate accounting and
financial reporting principles and policies and controls and procedures
designed to assure compliance with accounting standards and applicable
laws and regulations. The independent auditors are responsible for
planning and carrying out a proper audit of the Company's annual
financial statements, reviews of the Company's interim financial
statements prior to the filing of each applicable SEC report if
necessary, and other procedures. In fulfilling their responsibilities
hereunder, it is recognized that members of the Audit Committee are not
full-time employees of the Company and are not, and do not represent
themselves to be, performing the functions of auditors or accountants.
As such, it is not the duty or responsibility of the Audit Committee or
its members to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor independence
standards, and each member of the Audit Committee shall be entitled to
rely on (i) the integrity of those persons and organizations within and
outside the Company from which it receives information, (ii) the
accuracy of the financial and other information provided to the Audit
Committee by such persons or organizations absent actual knowledge to
the contrary (which shall be promptly reported to the Board of
Directors) and (iii) representations made by management of the Company
or of Bank of Ireland Asset Management (U.S.) Limited ("BIAM") as to
any non-audit services provided by the auditors of the Company to the
Company, BIAM or any entity controlling, controlled by or under common
control with BIAM that provides ongoing services to the Company ("BIAM
Affiliates").
The independent auditors for the Company are accountable to the Board
of Directors and the Audit Committee, as representatives of the
shareholders. The Audit Committee is directly responsible for the
appointment, retention, compensation and oversight of the work of the
independent auditors (including resolving disagreements between
management and the independent auditors regarding financial reporting).
The independent auditors shall report directly to the Audit Committee.
The independent auditors shall submit to the Company annually a formal
written statement (the "Auditors' Statement") describing: the auditors'
internal quality-control procedures; any material issues raised by the
most recent internal quality-control review or peer review of the
auditors, or by any inquiry or investigation by governmental or
A-1
professional authorities, within the preceding five years, respecting
on or more independent audits carried out by the auditors, and any
steps taken to deal with any such issues; and (to assess the auditors'
independence) all relationships between the independent auditors and
the Company, including each non-audit service provided to the Company,
BIAM and the BIAM Affiliates and at least the matters set forth in
Independence Standards Board No. 1. Such Statement shall also delineate
any professional, tax or consulting services to the investment adviser,
administrator or custodian.
The independent auditors shall submit to the Audit Committee annually a
formal written statement of the fees billed in each of the last two
fiscal years for each of the following categories of services rendered
by the independent auditors: (i) the audit of the Company's annual
financial statements and any reviews of the financial statements
included in the Company's SEC reports as needed or services that are
normally provided by the independent auditors in connection with
statutory and regulatory filings or engagements; (ii) assurance and
related services not included in clause (i) that are reasonably related
to the performance of the audit or review of the Company's financial
statements, in the aggregate and by each service; (iii) tax compliance,
tax advice and tax planning services, in the aggregate and by each
service; and (iv) all other products and services rendered by the
independent auditors and provided to each of the Company, BIAM and the
BIAM Affiliates, in the aggregate and by each service.
III. MEETINGS OF THE AUDIT COMMITTEE: The Audit Committee shall meet as
often as may be required to discuss the matters set forth in Article
IV. In addition, the Audit Committee should meet separately at least
annually with management and the independent auditors to discuss any
matters that the Audit Committee or any of these persons or firms
believe should be discussed privately. The Audit Committee may request
any officer or employee of the Company or any service provider, outside
counsel to the Company or the independent directors or the Company's
independent auditors to attend a meeting of the Audit Committee or to
meet with any members of, or consultants to, the Audit Committee.
Members of the Audit Committee may participate in a meeting of the
Audit Committee by means of conference call or similar communications
equipment by means of which all persons participating in the meeting
can hear each other.
IV. DUTIES AND POWERS OF THE AUDIT COMMITTEE: To carry out its purposes,
the Audit Committee shall have the following duties and powers:
1. with respect to the independent auditors,
(i) to directly appoint, retain, compensate, evaluate, and
terminate the independent auditors, including the sole
authority to approve all audit engagement fees and
terms;
(ii) to pre-approve, or to adopt appropriate procedures to
pre-approve, all audit and non-audit services to be
provided by the independent auditors;
(iii) to ensure that the independent auditors prepare and
deliver annually an Auditors' Statement (it being
understood that the independent auditors are
responsible for the accuracy and completeness of this
Statement), to discuss with the independent auditors
any relationships or services disclosed in this
Statement that may impact the objectivity and
independence of the Company's independent auditors;
(iv) to obtain from the independent auditors in connection
with any audit a timely report relating to the
Company's annual audited financial statements
describing all critical accounting policies and
practices used, all alternative treatments of financial
information within generally accepted accounting
principles that have been discussed with management,
ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred
by the independent auditors, and any material written
communications between the independent auditors and
management, such as any "management" letter or schedule
of unadjusted differences;
(v) to review and evaluate the qualifications, performance
and independence of the lead partner of the independent
auditors;
(vi) to discuss with management the timing and process for
implementing the rotation of the lead audit partner,
the concurring partner and any other active audit
engagement team partner and consider whether there
should be a regular rotation of the audit firm itself;
(vii) to take into account the opinions of management in
assessing the independent auditors' qualifications,
performance and independence;
(viii) if applicable, to consider whether the independent
auditors' provision to the Company, BIAM and the BIAM
Affiliates of non-audit services is compatible with
maintaining the independence of the independent
auditors;
(ix) to instruct the independent auditors that the
independent auditors are ultimately accountable to the
Board of Directors and Audit Committee, as
representatives of the shareholders;
A-2
2. with respect to the Company's internal audit function, to
review, in consultation as appropriate with the independent
auditors and Company service providers, matters relating to
internal controls over financial reporting;
3. with respect to financial reporting principles and policies
and internal audit controls over financial reporting,
(i) to advise management, applicable Company service
providers and the independent auditors that they are
expected to provide or cause to be provided to the
Audit Committee a timely analysis of significant
financial reporting issues and practices;
(ii) to consider any reports or communications (and
management's and/or applicable Company service
providers' responses thereto) submitted to the Audit
Committee by the independent auditors required by or
referred to in SAS 61 (as codified by AU Section 380),
as may be modified or supplemented, including reports
and communications related to:
o deficiencies noted in the audit in the design or
operation of internal controls;
o consideration of fraud in a financial statement
audit;
o detection of illegal acts;
o the independent auditors' responsibility under
generally accepted auditing standards;
o any restriction on audit scope;
o significant accounting policies;
o significant issues discussed with the national
office respecting auditing or accounting issues
presented by the engagement;
o management judgments and accounting estimates;
o any accounting adjustments arising from the audit
that were noted or proposed by the auditors but
were passed (as immaterial or otherwise);
o the responsibility of the independent auditors for
other information in documents containing audited
financial statements;
o disagreements with management;
o consultation by management with other accountants;
o major issues discussed with management prior to
retention of the independent auditors;
o difficulties encountered with management in
performing the audit;
o the independent auditors' judgments about the
quality of the Company's accounting principles;
o reviews of interim financial information conducted
by the independent auditors; and
o the responsibilities, budget and staffing of the
Company's internal audit function;
(iii) to meet with management, the independent auditors and,
if appropriate, the applicable Company service
providers:
o to discuss the scope of the annual audit;
o to discuss the annual audited financial statements
and interim financial statements;
o to discuss any significant matters arising from
any audit, including any audit problems or
difficulties, whether raised by management,
Company service providers or the independent
auditors, relating to the Company's financial
statements;
A-3
o to discuss any difficulties the independent
auditors encountered in the course of the audit,
including any restrictions on their activities or
access to requested information and any
significant disagreements with management;
o to discuss any "management" or "internal control"
letter issued, or proposed to be issued, by the
independent auditors to the Company;
o to review the form of opinion the independent
auditors propose to render to the Board of
Directors and shareholders;
o to discuss the Company's compliance with
Subchapter M of the Internal Revenue Code of 1986,
as amended;
o to discuss with management and the independent
auditors their respective procedures to assess the
representativeness of securities prices provided
by external pricing services;
o to discuss with independent auditors their
conclusions as to the reasonableness of procedures
employed to determine the fair value of securities
for which readily available market quotations are
not available, management's adherence to such
procedures and the adequacy of supporting
documentation;
o to discuss, as appropriate: (a) any major issues
regarding accounting principles and financial
statement presentations, including any significant
changes in the Company's selection or application
of accounting principles, and major issues as to
the adequacy of the Company's internal controls
and any special audit steps adopted in light of
material control deficiencies; (b) analyses
prepared by management and/or the independent
auditors 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; and (c)
the effect of regulatory and accounting
initiatives, as well as off-balance sheet
structures, on the financial statements of the
Company;
o to inquire about significant risks and exposures,
if any, and the steps taken to monitor and
minimize such risks;
o to review results of regulatory examinations;
o to review compliance reports under the Codes of
Ethics;
(iv) to inquire of the Company's chief executive officer and
chief financial officer as to the existence of any
significant deficiencies in the design or operation of
internal controls that could adversely affect the
Company's ability to record, process, summarize and
report financial data, any material weaknesses in
internal controls, and any fraud, whether or not
material, that involves management or other employees
or service providers who have a significant role in the
Company's internal controls;
(v) to discuss guidelines and policies governing the
process by which senior management of the Company and
service providers to the Company assess and manage the
Company's exposure to risk, and to discuss the
Company's major financial risk exposures and the steps
management has taken to monitor and control such
exposures;
(vi) to obtain from the independent auditors assurance that
the audit was conducted in a manner consistent with
Section 10A of the Securities Exchange Act of 1934, as
amended, which sets forth certain procedures to be
followed in any audit of financial statements required
under the Securities Exchange Act of 1934;
(vii) to discuss with the Company's legal advisors any
significant legal, compliance or regulatory matters
that may have a material effect on the financial
statements or the Company's business, financial
statements or compliances policies, including material
notices to or inquiries received from governmental
agencies;
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(viii) to establish procedures for the receipt, retention and
treatment of complaints received by the Company
regarding accounting, internal accounting controls or
auditing matters, and for the confidential, anonymous
submission by Company employees and/or Company service
providers of concerns regarding questionable accounting
or auditing matters; and
(ix) to establish hiring policies for employees or former
employees of the independent auditors;
4. with respect to reporting and recommendations,
(i) to provide advice to the Board of Directors in
selecting the principal accounting officer of the
Company;
(ii) to prepare any report or other disclosures, including
any recommendation of the Audit Committee, required by
the rules of the SEC to be included in the Company's
annual proxy statement;
(iii) to review this Charter at least annually and recommend
any changes to the full Board of Directors;
(iv) to report its activities to the full Board of Directors
on a regular basis and to make such recommendations
with respect to the above and other matters as the
Audit Committee may deem necessary or appropriate; and
(v) to prepare and review with the Board an annual
performance evaluation of the Audit Committee, which
evaluation must compare the performance of the Audit
Committee with the requirements of this Charter. The
performance evaluation by the Audit Committee shall be
conducted in such manner as the Audit Committee deems
appropriate. The report to the Board may take the form
of an oral report by the chairperson of the Audit
Committee or any other member of the Audit Committee
designated by the Audit Committee to make this report.
V. DELEGATION: The Audit Committee may, in its discretion,
delegate all or a portion of its duties and responsibilities
to a subcommittee of the Audit Committee. The Audit Committee
may, in its discretion, delegate to one or more of its members
the authority to pre-approve any audit or non-audit services
to be performed by the independent auditors, provided that any
such approvals are presented to the Audit Committee at its
next scheduled meeting.
VI. RESOURCES AND AUTHORITY OF THE AUDIT COMMITTEE: The Audit
Committee shall have the resources and authority appropriate
to discharge its responsibilities, including the authority to
select, retain, terminate and approve the fees and other
retention terms of special or independent counsel, accountants
or other experts and advisors, as it deems necessary or
appropriate, without seeking approval of the Board or
management.
Amended March 13, 2001
Amended September 9, 2003
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THE NEW IRELAND FUND, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS ---- JUNE 8, 2004
The undersigned hereby appoints Peter J. Hooper, Lelia Long and Hugh
Carter, and each of them, attorneys in fact and proxies of the undersigned, with
full powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned as designated on the reverse side of this
proxy card, all stock of The New Ireland Fund, Inc. held of record by the
undersigned on April 12, 2004 at the Annual Meeting of Stockholders (the
"Meeting") to be held on June 8, 2004, and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement and hereby instructs said attorneys and proxies to vote said shares as
indicated herein. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Meeting.
A majority of the proxies present and acting at the Meeting in person
or by substitute (or, if only one shall be so present, then that one) shall have
and exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
(CONTINUED ON THE REVERSE SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AND AGAINST PROPOSAL 2, AS SUCH MATTERS MAY ARISE. PLEASE REFER TO
THE PROXY STATEMENT FOR A DISCUSSION OF ALL THE PROPOSALS.
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSAL 1. THE BOARD RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
(1) Election of Directors: George G. Moore (Class I
Director), Denis P. Kelleher (Class II Director) and (2) To consider and act upon a stockholder proposal
James M. Walton (Class II Director) requesting the Board to take steps necessary to
open-end the Fund or otherwise enable stockholders
FOR all nominees [ ] WITHHOLD from all [ ] to realize net asset value for their shares.
listed above (except as nominees listed above
noted below) FOR [ ] AGAINST [ ] ABSTAIN [ ]
(INSTRUCTION: To withhold authority to vote for any individual (3) To vote and otherwise represent the undersigned on any
nominee, write that nominee's name on the line below) other matter that may properly come before the meeting
or any adjournment or postponement thereof in the
_______________________________________________________________ discretion of the Proxy holder.
PLEASE SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
________________________________________________________
(Title or Authority)
__________________________________________
(Signature)
__________________________________________
(Signature)
Dated: _______________________, 2004
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on this
card. When signing as attorney, trustee, executor, administrator, guardian or corporate
officer, please give your FULL title below.)