SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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-12
Cornerstone Total Return Fund, Inc.
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction: (5) Total fee paid:
[ ] 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: (2)
Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date
Filed:
CORNERSTONE TOTAL RETURN FUND, INC.
383 Madison Avenue New York, New York 10179
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 10, 2004
----------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Cornerstone Total Return Fund, Inc., a New York corporation (the
"Fund"), will be held at 9:00 a.m. on Thursday, June 10, 2004, at the offices of
Bear Stearns Funds Management Inc., 383 Madison Avenue, 13th Floor, Conference
Room P, New York, New York 10179 for the following purposes:
1. To approve the election of seven directors to hold office until
the year 2005 Annual Meeting of Shareholders (Proposal No. 1);
and
2. To consider and vote upon such other matters as may properly
come before said Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 24,
2004 as the record date for the determination of shareholders entitled to notice
of, and to vote at this Meeting or any adjournment thereof. The stock transfer
books will not be closed.
Copies of the Fund's most recent annual report may be ordered free of
charge to any shareholder by writing to the Fund c/o Bear Stearns Funds
Management Inc., 383 Madison Avenue, 23rd Floor, New York, New York 10179, or by
calling collect (212) 272-3550.
By Order of the Board of Directors
Thomas R. Westle
Secretary
Dated: April 28, 2004
UNLESS YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN AND
MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED REPLY ENVELOPE. YOUR PROMPT
RESPONSE WILL ASSURE A QUORUM AT THE MEETING.
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 a name shown in the
registration.
3. Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION
CORPORATE ACCOUNTS VALID SIGNATURE
------------------ ---------------
(1) ABC Corp..................................ABC Corp. (by John Doe, Treasurer)
(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
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr. UGMA.............John B. Smith
(2) John B. Smith ..................................John B. Smith, Jr., Executor
CORNERSTONE TOTAL RETURN FUND, INC.
383 Madison Avenue New York, New York 10179
-------------------------------
PROXY STATEMENT for ANNUAL MEETING OF SHAREHOLDERS
to be held on June 10, 2004
-------------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Cornerstone Total Return Fund, Inc., a
New York corporation (the "Fund") for use at the Annual Meeting of Shareholders
for the year 2004 (the "Meeting") to be held at 9:00 a.m. on Thursday June 10,
2004 at the offices of Bear Stearns Funds Management Inc., 383 Madison Avenue,
New York, New York 10179, and at any and all adjournments thereof. A form of
proxy is enclosed herewith. This Proxy Statement and the accompanying form of
proxy are being first mailed to Shareholders on or about April 30, 2004.
Any shareholder who executes and delivers a proxy may revoke it by
written communication to the Secretary of the Fund at any time prior to its use
or by voting in person at the Meeting. Unrevoked proxies will be voted in
accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the election of Messrs. Ralph W. Bradshaw, William
A. Clark, Andrew A. Strauss, Glenn W. Wilcox, Sr., Scott B. Rogers, Edwin Meese
III and Thomas H. Lenagh as the nominees for Director.
In general, abstentions and broker non-votes, as defined below, count
for purposes of obtaining a quorum but do not count as votes cast with respect
to any proposal where the broker does not have discretion. With respect to a
proposal requiring the affirmative vote of a majority of the Fund's outstanding
shares of common stock, the effect of abstentions and broker non-votes is the
same as a vote against such proposal. Otherwise, abstentions and broker
non-votes have no effect on the outcome of a proposal. A broker non-vote is a
proxy from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote shares
on a particular matter with respect to which the broker or nominee does not have
discretionary voting power.
At least 51% of the Fund's shareholders must be present at the Meeting
in person or by proxy to constitute a quorum for the transaction of business by
the Fund. In the event that a quorum is not present at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting from time
to time. Any such adjournment will require the affirmative vote of a majority of
those shares represented at the Meeting in person or by proxy. The persons named
as proxies will vote those proxies which they are entitled to vote FOR or
AGAINST any such proposal in their discretion.
The cost of soliciting the proxies will be borne by the Fund. Proxy
solicitations will be made primarily by mail, but solicitations may also be made
by telephone, telegraph or personal interviews conducted by officers or
employees of the Fund or Bear Stearns Funds Management Inc., the administrator
to the Fund (the "Administrator").
Only holders of issued and outstanding shares of the Fund's common
stock of record at the close of business on March 24, 2004 are entitled to
notice of, and to vote at, the Meeting. Each such holder is entitled to one vote
per share of common stock so held. The number of shares of common stock
outstanding on March 24, 2004 was 4,736,956. The Fund is a closed-end,
diversified management investment company.
Copies of the Fund's most recent annual report may be ordered free of
charge to any stockholder by writing to the Fund c/o Bear Stearns Funds
Management Inc., 383 Madison Avenue, New York, New York 10179, or by telephone
by calling the Fund collect at (212) 272-3550. This report is not to be regarded
as proxy-soliciting material.
This Proxy Statement is first being mailed to Shareholders on or about
April 30, 2004.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven members. Six of the
members were approved by the Shareholders at the Year 2003 Annual Meeting. At a
meeting held on February 20, 2004, Gary A. Bentz tendered his resignation and
the Board elected Mr. William A. Clark, based on the recommendation of the
Nominating Committee, to fill the vacancy created by Mr. Bentz's resignation
until the year 2004 Annual Meeting of shareholders.
At the Meeting, Shareholders will be asked to vote for the election of
Messrs. Ralph W. Bradshaw, William A. Clark, Andrew A. Strauss, Glenn W. Wilcox,
Sr., Scott B. Rogers, Edwin Meese III and Thomas H. Lenagh as directors to serve
until the year 2005 Annual Meeting of Shareholders or thereafter until each of
their successors are duly elected and qualified. If elected, each nominee has
consented to serve as a director of the Fund until his successor is duly elected
and qualified.
Each Nominee was considered and recommended by the Fund's Nominating
Committee at a meeting held on February 20, 2004.
The persons named in the accompanying form of proxy intend to vote at
the Meeting (unless directed not to vote) FOR the election of Messrs. Ralph W.
Bradshaw, William A. Clark, Andrew A. Strauss, Glenn W. Wilcox, Sr., Scott B.
Rogers, Edwin Meese III and Thomas H. Lenagh. Each nominee has indicated that he
will serve if elected, and the Board of Directors has no reason to believe that
any of the nominees named above will become unavailable for election as a
director, but if any nominee should be unable to serve, the proxy will be voted
for any other person determined by the persons named in the proxy in accordance
with their judgment.
The following table sets forth the names, addresses, ages and principal
occupations of each of the nominees for election as Directors:
NOMINEES
Term of Directorships held by
Position Office Principal Occupation during Nominee for Director
Name, Address(1) & Age with Fund Since past 5 years Outside of Fund Complex*
---------------------- --------- ----- ------------ ------------------------
Glenn W. Wilcox, Sr. (72)Director 2001 Chairman of the Board and Chief Director and Chairman of
Executive Officer of Wilcox Audit Committee of
Travel Agency, Inc.; Director Investors First Fund,
and Audit Committee Chairman of Inc.; Director of
Progressive Return Fund, Inc. Wachovia Corp.; Board
and Cornerstone Strategic Value Trustee of Appalachian
Fund, Inc. State University;
Director, Champion
Industries, Inc.; and
Chairman, Tower
Associates, Inc. (a real
estate venture)
Andrew A. Strauss (50) Director 2001 Attorney and senior member of Director and Chairman of
Strauss & Associates, P.A., the Nominating and
Attorneys, Asheville and Corporate Governance
Hendersonville, NC; previous Committees of Investors
President of White Knight First Fund, Inc.;
Healthcare, Inc. and LMV Director of Memorial
Leasing, Inc., a wholly owned Mission Hospital
subsidiary of Xerox Credit Foundation, Deerfield
Corporation; Director of Episcopal Retirement
Progressive Return Fund, Inc. Community and Asheville
and Cornerstone Strategic Value Symphony.
Fund, Inc.
Edwin Meese III (72) Director 2001 Distinguished Fellow, The Director, Investors First
Heritage Foundation, Washington Fund, Inc. and Carrington
D.C.; Distinguished Visiting Laboratories Incorporated
Fellow at the Hoover
Institution, Stanford
University; Distinguished Senior
Fellow at the Institute of
United States Studies,
University of London; Senior
Adviser, Revelation LP, Formerly
U.S. Attorney General under
President Ronald Reagan;
Director of Cornerstone
Strategic Value Fund, Inc. and
Progressive Return Fund, Inc.
Scott B. Rogers (48) Director 2001 Chief Executive Officer, Chairman and Director,
Asheville Buncombe Community Recycling Unlimited;
Christian Ministry; and Director of A-B Vision
President, ABCCM Doctor's Board and
Medical Clinic; Director, Faith Interdenominational
Partnerships Inc.; Appointee, NC Ministerial Alliance
Governor's Commission on Welfare
to Work.; Director of
Progressive Return Fund, Inc.
and Cornerstone Strategic Value
Fund, Inc.
Thomas H. Lenagh (81) Director 2002 Chairman of the Board of Director of Investors
Photonics Products Group; First Fund, Inc., The
Independent Financial Adviser; Adams Express Company and
Director of Progressive Return Petroleum and Resources
Fund, Inc. and Cornerstone Corporation
Strategic Value Fund, Inc.
INTERESTED NOMINEES
Ralph W. Bradshaw (53)** Chairman of 2001 President, Cornerstone Advisors; Director, Investors First
the Board Financial Consultant; President Fund, Inc.; Previous
and President and Director of Cornerstone Director of The Austria
Strategic Value Fund, Inc. and Fund
Progressive Return Fund, Inc.;
Vice President, Deep Discount
Advisors, Inc. (1993-1999).
William A. Clark(58)** Director, 2004 Director and Stockholder of Director, Chairman of the
Vice Cornerstone Advisors, Inc.; Board and President of
President Director of Progressive Return Investors First Fund, Inc.
Fund, Inc. and Cornerstone
Strategic Value Fund, Inc.;
former financial consultant,
Deep Discount Advisors, Inc.;
Former Director of The Austria
Fund, Inc.
------------
(1) The mailing address of each Nominee with respect to Fund Operations is 383
Madison Avenue, 23rd Floor, New York, NY 10179.
* As of December 31, 2003, the Fund Complex is comprised of the Fund,
Cornerstone Strategic Value Fund, Inc. and Progressive Return Fund, Inc.
all of which are managed by Cornerstone Advisors, Inc.
** Mr. Bradshaw and Mr. Clark are "interested persons" as defined in the
Investment Company Act of 1940 ("Investment Company Act") because of their
affiliation with Cornerstone Advisors.
The following table sets forth, for each Director, the aggregate dollar
range of equity securities owned of the Fund and of all Funds overseen by each
Director in the Fund Complex as of December 31, 2003. The information as to
beneficial ownership is based on statements furnished to the Fund by each
Director.
Aggregate Dollar Range of
Equity Securities in All Funds
Dollar Range of Overseen by Directors in Fund
Name Equity Securities in the Complex.
Fund.
---------------------------------- -------------------------------- -------------------------------
NON-INTERESTED DIRECTORS
Edwin Meese III 0 0
Andrew A. Strauss $1-$10,000 $10,001-$50,000
Thomas H. Lenagh 0 0
Glenn W. Wilcox Sr. $1-$10,000 $10,001-$50,000
Scott B. Rogers 0 0
INTERESTED DIRECTORS
Ralph W. Bradshaw $50,001 - $100,000 Over $100,000
William A. Clark $50,001-$100,000 Over $100,000
Gary Bentz* Over $100,000 Over $100,000
* Mr. Bentz resigned on February 20, 2004.
EXECUTIVE OFFICERS
In addition to Messrs. Bradshaw and Clark, the current officers of the
Fund are:
Name, Address(1) & Age Position(s) with Term of Office Principal Occupation during past 5 years
Fund Since
---------------------- ---------------- --------------- ------------------------------------------
Jodi Levine (34) Treasurer 2004 Associate Director, Bear Stearns Funds
Management Inc.
Thomas R. Westle (50) Secretary 2001 Partner at Blank Rome LLP, a law firm; previous
partner at Spitzer & Feldman P.C., a law firm.
-------------
(1) The officers' address is the same as the Fund's.
Under the federal securities laws, the Fund is required to provide to
Shareholders in connection with the Meeting information regarding compensation
paid to Directors by the Fund as well as by the various other U.S. registered
investment companies advised by the Fund's investment adviser during its prior
fiscal year. The following table provides information concerning the
compensation paid during the year ended December 31, 2003, to each Director of
the Fund in their capacities solely as a director of the Fund. This information
does not reflect any additional monies received for a named individual serving
in any other capacity to the Fund. Please note that the Fund has no bonus,
profit sharing, pension or retirement plans.
Aggregate Total Compensation From Fund
Director Compensation From and Fund Complex* Paid to
Name of Director Since Fund Director
---------------- ----- ---- --------
Ralph W. Bradshaw 2001 $0 $0
Glenn W. Wilcox, Sr. 2001 $7,800 $18,900
Andrew A. Strauss 2001 $7,800 $18,900
Edwin Meese III 2002 $5,989 $15,489
Scott B. Rogers 2001 $7,800 $18,900
Thomas H. Lenagh 2002 $6,789 $17,889
Gary Bentz** 2001 $0 $0
William A. Clark 2004 $0 $0
-------------
o For compensation purposes, Fund Complex refers to the Fund, Cornerstone
Strategic Value Fund, Inc. and Progressive Return Fund, Inc. all of which
were managed by Cornerstone Advisors during the year ended December 31,
2003.
** Mr. Bentz resigned on February 20, 2004.
Each Director attended at least seventy-five (75%) percent or more of
the five (5) meetings of the Board of Directors (including regularly scheduled
and special meetings) held during the period for which he was a Director.
The Audit Committee
During the fiscal year ended December 31, 2003, the Audit Committee was
composed of all independent directors, as such term is defined in Section
2(a)(19) of the Investment Company Act and Section 121A of the American Stock
Exchange, LLC ("AMEX") rules. The members of the Audit Committee during this
period were Messrs. Wilcox, Sr., Strauss, Meese, Lenagh and Rogers. The
principal functions of the Audit Committee include but are not limited to, (i)
the oversight of the accounting and financial reporting processes of the Fund
and its internal control over financial reporting; (ii) the oversight of the
quality and integrity of the Fund's financial statements and the independent
audit thereof; and (iii) the approval, prior to the engagement of, the Fund's
independent auditors and, in connection therewith, to review and evaluate the
qualifications, independence and performance of the Fund's independent auditors.
The Audit Committee convened two (2) times during the fiscal year.
The Audit Committee currently does not have an Audit Committee
Financial Expert, as such term is defined in Section 407 of the Sarbannes-Oxley
Act of 2002. Rather, the Audit Committee members believe that each of their
individual experiences provide the Audit Committee with sufficient experience
and expertise to allow them to perform their duties as members of the Audit
Committee.
The Nominating Committee
The Fund has a standing Nominating Committee which is comprised of
Messrs. Wilcox, Lenagh, Strauss, Meese and Rogers, all of whom are independent
directors of the Fund, as such term is defined in Section 2(a)(19) of the
Investment Company Act and in Section 121A of the AMEX Rules. The Nominating
Committee does not have a written charter. The Nominating Committee is appointed
to identify and select qualified candidates that have exhibited strong decision
making ability, substantial business experience, relevant knowledge of the
mutual fund industry (including closed-end funds), skills or technological
expertise and exemplary personal integrity and reputation. In addition, the
Nominating Committee seeks candidates that have experience and knowledge
involving all of the service providers of a registered investment company.
The Nominating Committee will consider all nominees recommended by
stockholders of the Fund, so long as stockholders send their recommendations in
writing to the Secretary of the Fund in a manner consistent with the Fund's
By-laws. Currently, the By-laws provide that the deadline for submitting a
shareholder proposal for inclusion in the Fund's proxy statement and proxy for
the Fund's 2005 annual meeting of stockholders pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of 1934, is December 30, 2004.
Stockholders wishing to submit proposals or director nominations that are not to
be included in such proxy statement and proxy must deliver notice to the
Secretary at the principal executive offices of the Fund not later than the
close of business on January 29, 2005 nor earlier than the close of business on
December 30, 2004. Shareholders are also advised to review the Fund's By-laws,
which contain additional requirements with respect to advance notice of
stockholder proposals and director nominations.
During the calendar year ended December 31, 2003, the Nominating
Committee did not meet. At the February 20, 2004 Nominating Committee meeting,
the Nominating Committee met and discussed the nomination of all of the
Directors of the Fund for the 2004 Annual Meeting of Shareholders. Each Nominee
was recommended by the Non-interested Directors.
Required Vote
Directors are elected by a plurality (a simple majority of the votes
cast at the meeting) of the votes cast by the holders of shares of common stock
of the Fund present in person or represented by proxy at a meeting with a quorum
present. For purposes of the election of Directors, abstentions and broker
non-votes will be counted as shares present for quorum purposes, may be
considered votes cast, and may affect the plurality vote required for Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF MESSRS. RALPH W. BRADSHAW, WILLIAM A. CLARK, ANDREW A. STRAUSS,
GLENN W. WILCOX, SR., SCOTT B. ROGERS, EDWIN MEESE III AND THOMAS H. LENAGH AS
DIRECTORS OF THE FUND.
AUDIT COMMITTEE REPORT
On February 20, 2004, the Audit Committee met with the Fund's
Administrator, Bear Stearns Funds Management Inc., and the Fund's independent
accountants, Tait, Weller & Baker, to discuss and review the Fund's audited
financial statements for the fiscal year ended December 31, 2003. The
Administrator represented to the Audit Committee that the Fund's financial
statements were prepared in accordance with U.S. generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the financial
statements with the Fund's Administrator and its independent accountants. The
Audit Committee also discussed with the independent accountants matters required
to be discussed by Statement on Auditing Standards No. 61.
The Fund's independent accountants also provided to the Audit Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants' their independence, in light of the
services they were providing.
Based upon the Audit Committee's discussion with the Fund's
Administrator and the independent accountants and the Audit Committee's review
of the representations of the Fund's Administrator and the report of the
independent accountants to the Audit Committee, the Audit Committee recommended
that the Board of Directors include the audited financial statements in the
Fund's Annual Report for the fiscal year ended December 31, 2003 filed with the
Securities and Exchange Commission.
This Audit Committee report shall not be deemed incorporated by
reference in any document previously or subsequently filed with the Securities
and Exchange Commission that incorporates by reference all or any portion of
this proxy statement except to the extent that the Fund specifically requests
that the report be specifically incorporated by reference.
The Audit Committee of the Board of Directors has selected Tait, Weller
& Baker to be employed as the Fund's independent certified public accountants to
make the annual audit and to report on, as may be required, the financial
statements which may be filed by the Fund with the Securities and Exchange
Commission during the ensuing year.
Respectfully submitted,
Glenn W. Wilcox, Sr.
Andrew A. Strauss
Scott B. Rogers
Edwin Meese III
Thomas H. Lenagh
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Fund's independent public accountants for the calendar year ended
December 31, 2003, was the firm Tait, Weller & Baker. The Audit Committee has
selected Tait, Weller & Baker to be the Fund's independent auditor for 2004. The
selection of the Fund's independent auditor is not being submitted to
Shareholders because there is no legal requirement to do so.
A representative of Tait, Weller & Baker is not expected to be present
at the Annual Meeting of shareholders but may be available by telephone to
respond to appropriate questions from shareholders.
Principal Accountant Fees and Services
Aggregate fees for professional services rendered for the Fund by Tait,
Weller & Baker and PricewaterhouseCoopers LLP as of or for the year ended
December 31, 2003 and 2002 were:
Service 2003 2002
------- ---- ----
Audit Fees $11,000 $11,000
Audit Related Fees 0 0
Tax Fees $ 2,000 $ 2,000
All Other Fees 0 $ 8,850
All of the services performed by the Fund's independent auditors,
including audit related and non-audit related services, were pre-approved by the
Audit Committee, as required under the Audit Committee Charter. The Audit Fees
for the years ended December 31, 2003 and 2002 were for professional services
rendered for the audits of the financial statements of the Fund, reviews, and
issuances of consents, and assistance with review of documents filed with the
SEC. Tax Fees for the years ended December 31, 2003 and 2002 were for services
performed in connection with income tax services other than those directly
related to the audit of the income tax accrual. The amount listed above for "All
Other Fees", includes fees incurred related to accounting research and other
special projects.
The Audit Committee has considered and determined that the services
provided by Tait, Weller & Baker are compatible with maintaining Tait, Weller &
Baker's independence. The aggregate fees included in Audit Fees are fees billed
for the calendar year for the audit of the Fund's annual financial statements.
Of the time expended by the Fund's principal accountant to audit the Fund's
financial statements for the calendar year ended December 31, 2003, less than
50% of such time involved work performed by persons other than the principal
accountant's full time, permanent employees. Tait, Weller & Baker did not
perform any services on behalf of Cornerstone Advisors, Inc.
INFORMATION PERTAINING TO THE FUND'S INVESTMENT ADVISER AND ADMINISTRATOR
THE INVESTMENT ADVISER
Cornerstone Advisors, Inc. has acted as the Fund's investment adviser
since January 2, 2002, and has its principal office at One West Pack Square,
Suite 1650, Asheville, North Carolina 28801. Cornerstone Advisors was organized
in February of 2001, to provide investment management services to closed-end
investment companies and is registered with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended. Cornerstone
Advisors is the investment manager to two other closed-end funds, Cornerstone
Strategic Value Fund, Inc. and Progressive Return Fund, Inc. Messrs. Bradshaw,
Bentz and Clark are the only stockholders of the Adviser. During the calendar
year ended December 31, 2003, Messrs. Bradshaw and Bentz each sold a portion of
their common stock of the Adviser to Mr. Clark.
Mr. Bradshaw, an owner of Cornerstone Advisors, is President and
Chairman of the Board of Directors of the Fund. Mr. Bentz, formerly the Vice
President, Treasurer and a Director of the Fund, and Mr. Clark, Vice President
and a Director of the Fund, are also owners of Cornerstone Advisors. The address
of Messrs. Bradshaw, Bentz, and Clark is One West Pack Square, Suite 1650,
Asheville, North Carolina 28801.
THE ADMINISTRATOR
Bear Stearns Funds Management Inc. (the "Administrator"), whose address
is 383 Madison Avenue, 23rd Floor, New York, New York 10179, currently acts as
the administrator of the Fund.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Section 30(h) of the 1940 Act in combination require the Fund's
directors and officers, persons who own more than ten (10%) of the Fund's common
stock, and the Fund's investment adviser and its directors and officers, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the AMEX. The Fund believes that the Fund's directors and
officers, the Fund's investment adviser and its directors and officers have
complied with all applicable filing requirements during the year ended December
31, 2003.
INFORMATION PERTAINING TO CERTAIN SHAREHOLDERS
The following table sets forth the beneficial ownership of shares of
the Fund by each person known to the Fund to be deemed the beneficial owner of
more than five (5%) percent of the outstanding shares of the Fund:
Name and Address of Beneficial Owner CRF Shares of Common Stock
------------------------------------ Beneficially Owned
Amount %
Deep Discount Advisors, Inc. (1)
One West Pack Square
Suite 777
Asheville, NC 28801 532,899 11.4%
Ron Olin Investment Management Company (1)
One West Pack Square
Suite 777
Asheville, NC 28801 842,616 17.9%
Ronald G. Olin (2)
One West Pack Square
Suite 777
Asheville, NC 28801 280,280 6.0%
----------
(1) Based solely upon information presented in a Schedule 13G/A, dated March 9,
2004, filed jointly by Deep Discount Advisors, Inc. and Ron Olin Investment
Management Company.
(2) Based solely upon information presented in a Schedule 13G/A, dated March
18, 2004, filed by Ronald G. Olin.
Additionally, on March 24, 2004, Cede & Co., a nominee for participants
in the Depository Trust Company, held of record 4,433,880 shares of the Fund,
equal to approximately 93.6% of the outstanding shares of the Fund. All the
directors and executive officers of the Fund, as of the date of this proxy,
owned less than 1% of the outstanding shares of the Fund.
ADDITIONAL INFORMATION
The Proxy Statement/Prospectus does not contain all of the information
set forth in the registration statements and the exhibits relating thereto which
the Funds have filed with the Commission, under the Securities Act and the
Investment Company Act, to which reference is hereby made.
The Funds are subject to the informational requirements of the Exchange
Act and in accordance therewith, file reports and other information with the
SEC. Reports, proxy statements, registration statements and other information
filed by the Funds can be inspected and copied at the public reference
facilities of the SEC in Washington, DC. Copies of such materials also can be
obtained by mail from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, DC
20594, at prescribed rates.
OTHER BUSINESS
The Board of Directors of the Fund does not know of any other matter
which may come before the Meeting, but should any other matter requiring a vote
of Shareholders arise, including any questions as to the adjournment of the
Meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter in the interest of the
Fund.
PROPOSALS TO BE SUBMITTED BY SHAREHOLDERS
All proposals by Shareholders of the Fund which are intended to be
presented at the Fund's next Annual Meeting of Shareholders, to be held in the
year 2005, must be received by the Fund addressed to Cornerstone Total Return
Fund, Inc. c/o Bear Stearns Funds Management Inc., 383 Madison Avenue, 23rd
Floor, New York, New York 10179 in advance of the meeting as set forth in this
document.
CORNERSTONE TOTAL RETURN FUND, INC.
Thomas R. Westle, Secretary
Dated: April 28, 2004
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
PROXY CARD FOR THE ANNUAL MEETING OF SHAREHOLDERS
CORNERSTONE TOTAL RETURN FUND, INC.
The undersigned shareholder of Cornerstone Total Return Fund, Inc.
(the "Fund") hereby constitutes and appoints Messrs. Ralph W. Bradshaw, Frank J.
Maresca, Thomas R. Westle, or any of them, the action of a majority of them
voting to be controlling, as proxy of the undersigned, with full power of
substitution, to vote all shares of common stock of the Fund standing in his or
her name on the books of the Fund at the Annual Meeting of Shareholders of the
Fund to be held at the offices of Bear Stearns Funds Management, Inc., 383
Madison Avenue, 13th Floor, Conference Room P, New York, NY 10179, on June 10,
2004 at 9:00 a.m., New York time, or at any adjournment thereof, with all the
powers which the undersigned would possess if personally present, as designated
on the reverse hereof.
The undersigned hereby revokes any proxy previously given and
instructs the said proxies to vote in accordance with the aforementioned
instructions with respect to (1) the election of seven Directors; and (2) the
consideration and vote of such other matters as may properly come before the
Annual Meeting of Shareholders or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the stockholder. If no such direction is made, the said proxies will vote FOR
Proposal 1, and in their discretion with respect to such other matters as may
properly come before the Annual Meeting of Shareholders, in the interest of the
Fund.
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF CORNERSTONE TOTAL RETURN FUND, INC.'S
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
June 10, 2004
(To be dated and signed on reverse side)
Please mark boxes / / or /X/ in blue or black ink.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE:
[ X ]
1. To approve the election of seven (7) Directors: FOR WITHHELD
Ralph W. Bradshaw / / / /
William A. Clark / / / /
Andrew A. Strauss / / / /
Glenn W. Wilcox, Sr. / / / /
Scott B. Rogers / / / /
Edwin Meese III / / / /
Thomas H. Lenagh / / / /
2. In their discretion, the proxies are authorized to consider and vote upon
such matters as may properly come before the said Meeting or any
adjournment thereof.
Your proxy is important to assure a quorum at the Annual Meeting of Shareholders
whether or not you plan to attend the meeting in person. You may revoke this
proxy at anytime, and the giving of it will not affect your right to attend the
Annual Meeting of Shareholders and vote in person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE(S)____________________________ DATE___________________
NOTE: Please sign exactly as name appears. When shares are held as joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer and if a
partnership, please sign in full partnership name by authorized person.