Edgar Filing: CORNERSTONE TOTAL RETURN FUND INC

CORNERSTONE TOTAL RETURN FUND, INC.
383 Madison Avenue New York, New York 10179
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 10, 2005
--------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Cornerstone Total Return Fund, Inc., a New York corporation (the
"Fund"), will be held at 11:00 a.m., eastern time, on May 10, 2005 at Fifth
Floor Conference Room, One West Pack Square, Asheville, NC 28801, for the
following purposes:

1. To approve the election of seven directors to hold office until the
year 2006 Annual Meeting of Stockholders (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 30, 2005
as the record date for the determination of stockholders 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 by any stockholder 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 7, 2005

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
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
to be held on May 10, 2005
--------------------------

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 Stockholders for
the year 2005 (the "Meeting") to be held at 11:00 a.m., eastern time, on May 10,
2005 at the Fifth Floor Conference Room, One West Pack Square, Asheville, NC
28801, 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 stockholders of the Fund ("Stockholder(s)") on or about April 7,
2005.

Any Stockholder 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 Stockholders 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 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 30, 2005 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 30, 2005 was 4,822,203. 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 Stockholders on or about April 7,
2005.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The Board of Directors currently consists of seven members. All of the
members were approved by the Stockholders at the Year 2004 Annual Meeting.

At the Meeting, Stockholders 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 2006 Annual Meeting of Stockholders 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 and Corporate Governance Committee.

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

Position(s) Term of Directorships Held by
with Office Principal Occupation Over Nominee for Director
Name and Address (1) (Age) Fund Since Past 5 Years Outside of Fund Complex*
----------------------------------------------------------------------------------------------------------------------------------

Thomas H. Lenagh (82) Director 2002 Chairman of the Board of Photonics Director of The Adams
Products Group; Independent Express Company and
Financial Adviser; Director of Petroleum and Resources
Cornerstone Strategic Value Fund, Corporation
Inc.

Edwin Meese III (73) Director 2001 Distinguished Fellow, The Heritage Director of Carrington,
Foundation Washington D.C.; Laboratories Inc.
Distinguished Visiting Fellow at the
Hoover Institution, Stanford
University; Senior Adviser,
Revelation L.P.; formerly U.S.
Attorney General under President
Ronald Reagan; Director of
Cornerstone Strategic Value Fund,
Inc.

Scott B. Rogers (49) Director 2001 Chief Executive Officer, Asheville Chairman and Director,
Buncombe Community Christian Recycling Unlimited;
Ministry; and President, ABCCM Director of A-B Vision
Doctor's Medical Clinic; Appointee, Board,
NC Governor's Commission on Interdenominational
Welfare to Work; Director of Ministerial Alliance, and
Cornerstone Strategic Value Fund, Faith Partnerships, Inc.
Inc.

NOMINEES

Andrew A. Strauss (51) Director 2001 Attorney and senior member of Director of Memorial
Strauss & Associates, P.A., Mission Hospital
Attorneys, Asheville and Foundation, Deerfield
Hendersonville, NC; previous Episcopal Retirement
President of White Knight Community and
Healthcare, Inc. and LMV Leasing, Asheville
Inc., a wholly owned Symphony
subsidiary of Xerox Credit
Corporation; Director of Cornerstone
Strategic Value Fund, Inc.

Glenn W. Wilcox, Sr. (73) Director 2001 Chairman of the Board and Chief Director of Wachovia
Executive Officer of Wilcox Travel Corp.; Board Trustee of
Agency, Inc.; Director of Appalachian State
Cornerstone Strategic Value Fund, University; Director of
Inc. Champion
Industries, Inc.; and
Chairman of Tower
Associates, Inc. (a real
estate venture)

INTERESTED NOMINEES

Ralph W. Bradshaw (54)** Chairman of 2001 President, Cornerstone Advisors, Previous Director of The
the Board of Inc.; Financial Consultant; President Austria Fund, Inc.
Directors and Director of Cornerstone Strategic

and Value Fund, Inc.; Vice President,
President Deep Discount Advisors, Inc.
(1993-1999)

William A. Clark (59)** Director and 2004 Director and Stockholder of Previous Director of The
Vice Cornerstone Advisors, Inc.; Director Austria Fund, Inc.
President of Cornerstone Strategic Value Fund,
Inc.; former financial consultant of
Deep Discount Advisors, Inc.

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(1) The mailing address of each Nominee/Director with respect to Fund
operations is 383 Madison Avenue, 23rd Floor, New York, NY 10179.
* As of December 31, 2004, the Fund Complex is comprised of the Fund
and Cornerstone Strategic Value Fund, Inc., both of which are
managed by Cornerstone Advisors, Inc.
** Mr. Bradshaw and Mr. Clark are "interested persons" as defined in
the Investment Company Act because of their affiliation with
Cornerstone Advisors, Inc.

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, 2004. The information as to beneficial
ownership is based on statements furnished to the Fund by each Director.

Aggregate Dollar Range of Equity
Dollar Range of Equity Securities in Securities in All Funds Overseen by
Name the Fund Directors in Fund Complex
-----------------------------------------------------------------------------------------------------------------

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

EXECUTIVE OFFICERS

In addition to Messrs. Bradshaw and Clark, the current officers of the Fund are:

Term of
Name and Address (Age) Position with Fund Office Since Principal Occupation Over Past 5 Years
------------------------------------------------------------------------------------------------------------------------------

Gary A. Bentz (48) (1) Chief Compliance 2004 Chief Financial Officer, Chairman and
Officer Stockholder of Cornerstone Advisors, Inc.;
previous Director, Vice President and Treasurer of
the Fund and Cornerstone Strategic Value Fund,
Inc.; previous Director of The Austria Fund, Inc.;
Financial Consultant, C.P.A.; CFO of Deep
Discount Advisors, Inc. (1993-2000); Chief
Compliance Officer of Cornerstone Strategic
Value Fund, Inc.

Thomas R. Westle (51) Secretary 2001 Partner, Blank Rome LLP, a law firm; previous
405 Lexington Ave. partner at Spitzer & Feldman P.C., a law firm
New York, NY 10174

Jodi B. Levine (35) (1) Treasurer 2004 Associate Director, Bear, Stearns & Co. Inc.

(1) The officers' address is the same as the Fund's.

Under the federal securities laws, the Fund is required to provide to
Stockholders 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, 2004, 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.

Director Aggregate Compensation Total Compensation From Fund and Fund
Name of Director Since From Fund Complex* Paid to Director
----------------------------------------------------------------------------------------------------------------------

Glenn W. Wilcox, Sr. 2001 $8,000 $18,845
Andrew A. Strauss 2001 $8,000 $18,845
Edwin Meese III 2002 $8,000 $18,845
Scott B. Rogers 2001 $8,000 $18,845
Thomas H. Lenagh 2002 $8,000 $18,845

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* For compensation purposes, Fund Complex refers to the Fund,
Cornerstone Strategic Value Fund, Inc. and Progressive Return Fund,
Inc. ("PGF"), all of which were managed by Cornerstone Advisors,
Inc. during the year ended December 31, 2004. On June 25, 2004, PGF
merged with and into Cornerstone Strategic Value Fund, Inc.

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, 2004, 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 registered public accounting firm and, in connection therewith, to
review and evaluate the qualifications, independence and performance of the
Fund's independent registered public accounting firm. 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 and Corporate Governance Committee

The Fund has a standing Nominating and Corporate Governance Committee (the
"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 Committee has a written charter. The 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
Committee seeks candidates that have experience and knowledge involving all of
the service providers of a registered investment company.

The 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. The
Committee will seek candidates for the Board that have exhibited strong
decision-making ability, substantial business experience, relevant knowledge,
skills or technological expertise, and exemplary personal integrity and
reputation. Specifically, the Committee assesses all director nominees taking
into account several factors, including, but not limited to, issues such as the
current needs of the Board and the nominee's: (i) integrity, honesty, and
accountability; (ii) successful leadership experience and strong business
acumen; (iii) forward-looking, strategic focus; (iv) collegiality; (v)
independence and absence of conflicts of interests; and (vi) ability to devote
necessary time to meet director responsibilities. The Committee will ultimately
recommend nominees that it believes will enhance the Board's ability to oversee,
in an effective manner, the affairs and business of the Fund. The Committee will
consider and evaluate Stockholder-recommended candidates by applying the same
criteria used to evaluate director-recommended candidates. Currently, the
By-laws provide that the deadline for submitting a Stockholder proposal for
inclusion in the Fund's proxy statement and proxy for the Fund's 2006 annual
meeting of Stockholders pursuant to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, is January 7, 2006. 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 no later than the close of business on February 6,
2006 nor earlier than the close of business on January 7, 2006. Stockholders 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, 2004, the Nominating Committee
met and discussed the nomination of all directors for the 2004 Annual Meeting of
Stockholders. The Committee met and discussed the nomination of all of the
Directors of the Fund for the 2005 Annual Meeting of Stockholders. 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 STOCKHOLDERS 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 25, 2005, the Audit Committee met with the Fund's
Administrator, Bear Stearns Funds Management Inc., and the Fund's independent
registered public accounting firm, Tait, Weller & Baker, to discuss and review
the Fund's audited financial statements for the fiscal year ended December 31,
2004. 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
registered public accounting firm. The Audit Committee also discussed with the
independent registered public accounting firm matters required to be discussed
by Statement on Auditing Standards No. 61.

The Fund's independent registered public accounting firm 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 registered public accounting firm
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 registered public accounting firm and the Audit Committee's
review of the representations of the Fund's Administrator and the report of the
independent registered public accounting firm 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,
2004 filed with the Securities and Exchange Commission ("SEC").

This Audit Committee report shall not be deemed incorporated by reference
in any document previously or subsequently filed with the SEC 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 registered public accounting firm
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 SEC 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 REGISTERED PUBLIC ACCOUNTING FIRM

The Fund's independent registered public accounting firm for the calendar
year ended December 31, 2004, was the firm of Tait, Weller & Baker. The Audit
Committee has selected Tait, Weller & Baker to be the Fund's registered public
accounting firm for the calendar year ended December 31, 2005.

A representative of Tait, Weller & Baker is not expected to be present at
the Annual Meeting of Stockholders but may be available by telephone to respond
to appropriate questions from Stockholders.

Principal Accountant Fees and Services

Aggregate fees for professional services rendered for the Fund by Tait,
Weller & Baker as of or for the year ended December 31, 2004 and 2003 were:

Service 2004 2003
-------------------------------------------------------------------
Audit Fees $11,800 $11,000
Audit-Related Fees 0 0
Tax Fees $ 2,200 $ 2,000
All Other Fees 0 0

Total $14,000 $13,000

All of the services performed by the Fund's independent registered public
accounting firm, 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, 2004 and 2003, 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, 2004 and
2003, were for services performed in connection with income tax services other
than those directly related to the audit of the income and excise 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 independent registered public accounting firm
to audit the Fund's financial statements for the calendar year ended December
31, 2004, less than 50% of such time involved work performed by persons other
than the independent registered public accounting firm'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
("Investment Adviser") since January 2, 2002, and has its principal office at
One West Pack Square, Suite 1650, Asheville, North Carolina 28801. Cornerstone
Advisors, Inc. was organized in February of 2001, to provide investment
management services to closed-end investment companies and is registered with
the SEC under the Investment Advisers Act of 1940, as amended. Cornerstone
Advisors, Inc. is the Investment Adviser to one other closed-end fund,
Cornerstone Strategic Value Fund, Inc. Messrs. Bradshaw, Bentz and Clark are the
only stockholders of the Investment Adviser.

Mr. Bradshaw, an owner of Cornerstone Advisors, Inc., 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 currently Chief Compliance
Officer of the Fund, and Mr. Clark, Vice President and a Director of the Fund,
are also owners of Cornerstone Advisors, Inc. 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., 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 Investment Company 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 SEC 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, 2004.

INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS

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 Shares of Common Stock Beneficially Owned
------------------------------------------------------------------------------------------------
Amount %

Deep Discount Advisors, Inc. (1)
One West Pack Square, Suite 777

Asheville, NC 28801 266,549 5.6%

Ron Olin Investment Management Company (1)
One West Pack Square, Suite 777

Asheville, NC 28801 441,553 9.3%

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(1) Based solely upon information presented in a Schedule 13G/A, dated
February 3, 2005, filed jointly by Deep Discount Advisors, Inc. and Ron
Olin Investment Management Company.

Additionally, on March 30, 2005, Cede & Co., a nominee for participants in
the Depository Trust Company, held of record 4,504,749 shares of the Fund, equal
to approximately 93.4% 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 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 SEC, under the Exchange Act and the Investment Company Act,
to which reference is hereby made.

The Fund is 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, SEC, 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
Stockholders 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 STOCKHOLDERS

All proposals by Stockholders of the Fund which are intended to be
presented at the Fund's next Annual Meeting of Stockholders, to be held in the
year 2006, 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 7, 2005

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS 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.

APPENDIX A

AUDIT COMMITTEE CHARTER

I. Audit Committee Membership and Qualifications

The Audit Committees of the Cornerstone Strategic Value Fund, Inc. and the
Cornerstone Total Return Fund, Inc., each shall consist of at least three
members appointed by the respective Boards. The Boards may replace members of
the respective Audit Committees for any reason.

No member of a Fund's Audit Committee shall be an "interested person" of that
Fund, as that term is defined in Section 2(a)(19) of the Investment Company Act
of 1940, nor shall any member receive any compensation from the Fund except
compensation for service as a member of the Fund's Board of Directors (the
"Boards") or a committee of the Board.

The Boards shall determine annually whether any member of the Audit Committees
is an "audit committee financial expert" as defined in Item 3 of Form N-CSR.

II. Purposes of the Audit Committee

The purposes of the Audit Committees are:

(a) to oversee the accounting and financial reporting processes of the
respective Fund and its internal control over financial reporting and, as the
Committee deems appropriate, to inquire into the internal control over financial
reporting of certain third-party service providers;

(b) to oversee, or, as appropriate, assist Board oversight of, the quality and
integrity of a Fund's financial statements and the independent audit thereof;

(c) to oversee, or, as appropriate, assist Board oversight of, a Fund's
compliance with legal and regulatory requirements that relate to a Fund's
accounting and financial reporting, internal control over financial reporting
and independent audits;

(d) to approve prior to appointment the engagement of a Fund's independent
auditors and, in connection therewith, to review and evaluate the
qualifications, independence and performance of a Fund's independent auditors;
and

(e) to act as a liaison between a Fund's independent auditors and the full
Board. The independent auditors for a Fund shall report directly to the
respective Audit Committee.

III. Duties and Powers of the Audit Committees

To carry out its purposes, the Audit Committees shall have the following duties
and powers:

(a) to approve prior to appointment the engagement of auditors to annually audit
and provide their opinion on a Fund's financial statements, to recommend to
those Board members who are not "interested persons" (as that term is defined in
Section 2(a)(19) of the Investment Company Act) the selection, retention or
termination of a Fund's independent auditors and, in connection therewith, to
review and evaluate matters potentially affecting the independence and
capabilities of the auditors. In evaluating the auditor's qualifications,
performance and independence, the Audit Committee must, among other things,
obtain and review a report by the auditor, at least annually, describing the
following items:

(i) all relationships between the independent auditor and a Fund, as well
as a Fund's investment adviser or any control affiliate of the adviser
that provides ongoing services to a Fund;

(ii) any material issues raised by the most recent internal quality
control review, or peer review, of the audit firm, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried
out by the firm, and any steps taken to deal with any such issues; and

(iii) the audit firm's internal quality-control procedures.

It is a responsibility of each Audit Committee to engage actively in a dialogue
with the auditors with respect to any disclosed relationship or services that
may impact the objectivity and independence of the auditor and to take, or
recommend that the full Board take, appropriate action to oversee the
independence of the auditor.

(b) to approve prior to appointment the engagement of the auditor to provide
other audit services to a Fund or to provide non-audit services to a Fund, its
investment adviser or any entity controlling, controlled by, or under common
control with the investment adviser ("adviser affiliate") that provides ongoing
services to a Fund, if the engagement relates directly to the operations and
financial reporting of a Fund;

(c) to develop, to the extent deemed appropriate by an Audit Committee, policies
and procedures for pre-approval of the engagement of a Fund's auditors to
provide any of the services described in (b) above;

(d) to consider the controls applied by the auditors and any measures taken by
management in an effort to assure that all items requiring preapproval by an
Audit Committee are identified and referred to the Committee in a timely
fashion;

(e) to consider whether the non-audit services provided by a Fund's auditor to
the Fund's investment adviser or any adviser affiliate that provides ongoing
services to a Fund, which services were not pre approved by an Audit Committee,
are compatible with maintaining the auditor's independence;

(f) to review the arrangements for and scope of the annual audit and any special
audits;

(g) to review and approve the fees proposed to be charged to a Fund by the
auditors for each audit and non-audit service;

(h) to consider information and comments from the auditors with respect to a
Fund's accounting and financial reporting policies, procedures and internal
control over financial reporting (including a Fund's critical accounting
policies and practices), to consider management's responses to any such comments
and, to the extent an Audit Committee deems necessary or appropriate, to promote
improvements in the quality of a Fund's accounting and financial reporting;

(i) to consider information and comments from the auditors with respect to, and
meet with the auditors to discuss any matters of concern relating to, a Fund's
financial statements, including any adjustments to such statements recommended
by the auditors, and to review the auditors' opinion on a Fund's financial
statements

(j) to resolve disagreements between management and the auditors regarding
financial reporting;

(k) to consider any reports of difficulties that may have arisen in the course
of the audit, including any limitations on the scope of the audit, and
management's response thereto;

(l) to review with a Fund's principal executive officer and/or principal
financial officer in connection with required certifications on Form N-CSR any
significant deficiencies in the design or operation of internal control over
financial reporting or material weaknesses therein and any reported evidence of
fraud involving management or other employees who have a significant role in a
Fund's internal control over financial reporting;

(m) to establish procedures for the receipt, retention and treatment of
complaints received by a Fund relating to accounting, internal accounting
controls, or auditing matters, and the confidential, anonymous submission by
employees of a Fund, its investment adviser, administrator, principal
underwriter, or any other provider of accounting related services for the Fund
of concerns about accounting or auditing matters, and to address reports from
attorneys or auditors of possible violations of federal or state law or
fiduciary duty;

(n) to set clear policies relating to the hiring by entities within a Fund's
investment company complex of employees or former employees of the independent
auditors;

(o) to investigate or initiate an investigation of reports of improprieties or
suspected improprieties in connection with a Fund's accounting or financial
reporting;

(p) to report its activities to the full Board 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

(q) to perform such other functions and to have such powers as may be necessary
or appropriate in the efficient and lawful discharge of the powers provided in
this Charter.

The Audit Committees shall have the resources and authority appropriate to
discharge its responsibilities, including appropriate funding, as determined by
the Committee, for payment of compensation to the auditors for the purpose of
conducting the audit and rendering their audit report, the authority to retain
and compensate special counsel and other experts or consultants as the Committee
deems necessary, and the authority to obtain specialized training for Audit
Committee members, at the expense of a Fund, as appropriate. The Audit
Committees may delegate any portion of its authority, including the authority to
grant pre-approvals of audit and permitted non-audit services, to a subcommittee
of one or more members. Any decisions of the subcommittee to grant pre-approvals
shall be presented to the full Audit Committee at its next regularly scheduled
meeting.

IV. Role and Responsibilities of the Audit Committees

The function of the Audit Committees is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control over financial reporting, and the auditor's responsibility to plan and
carry out a proper audit. Specifically, each Fund's management is responsible
for: (1) the preparation, presentation and integrity of the Fund's financial
statements; (2) the maintenance of appropriate accounting and financial
reporting principles and policies; and (3) the maintenance of internal control
over financial reporting and other procedures designed to assure compliance with
accounting standards and related laws and regulations. The independent auditors
are responsible for planning and carrying out an audit consistent with
applicable legal and professional standards and the terms of their engagement
letter. Nothing in this Charter shall be construed to reduce the
responsibilities or liabilities of a Fund's service providers, including the
auditors.

Although the Audit Committees are expected to take a detached and questioning
approach to the matters that come before it, the review of a Fund's financial
statements by the Audit Committee is not an audit, nor does the Committee's
review substitute for the responsibilities of a Fund's management for preparing,
or the independent auditors for auditing, the financial statements. Members of
the Audit Committee are not full-time employees of a Fund and, in serving on a
Committee, are not, and do not hold themselves out to be, acting as accountants
or auditors. As such, it is not the duty or responsibility of the Committee or
its members to conduct "field work" or other types of auditing or accounting
reviews or procedures.

In discharging their duties the members of the Audit Committees are entitled to
rely on information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by: (1) one or
more officers of the Fund whom the director reasonably believes to be reliable
and competent in the matters presented; (2) legal counsel, public accountants,
or other persons as to matters the director reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the director is not a member.

V. Operations of the Audit Committees

(a) Each Audit Committee shall meet on a regular basis as often as necessary to
fulfill its responsibilities, including at least annually in connection with the
issuance of the Funds' audited financial statements. The chair or a majority of
the members shall be authorized to call a meeting of the Audit Committee and
send notice thereof.

(b) Each Audit Committee shall ordinarily meet in person; however, members may
attend telephonically, and the Committee may act by written consent, to the
extent permitted by law and by the Fund's bylaws.

(d) Each Audit Committee shall regularly meet, in separate executive sessions,
with representatives of Fund management, a Fund's internal auditors or other
personnel responsible for a Fund's internal audit function (if any) and the
Fund's independent auditors. The Committee may also request to meet with
internal legal counsel and compliance personnel of a Fund's investment adviser
and with entities that provide significant accounting or administrative services
to a Fund to discuss matters relating to the Fund's accounting and compliance as
well as other Fund-related matters.

(e) Each Audit Committee shall prepare and retain minutes of its meetings and
appropriate documentation of decisions made outside of meetings by delegated
authority.

(f) Each Audit Committee may select one of its members to be the chair and may
select a vice chair.

(g) A majority of the members of each Audit Committee shall constitute a quorum
for the transaction of business at any meeting of the Committee. The action of a
majority of the members of an Audit Committee present at a meeting at which a
quorum is present shall be the action of the Committee.

(h) The Board shall adopt and approve this Charter and may amend it on the Each
Audit Committee shall Board's own motion. review this Charter at least annually
and recommend to the full Board any changes the Committee deems appropriate.

APPENDIX B

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER

Purpose

The Nominating and Corporate Governance Committee (the "Committee") of
Cornerstone Strategic Value Fund, Inc. and Cornerstone Total Return Fund, Inc.
(each a "Corporation" or collectively the "Corporations") is appointed by each
Corporation's Board to assist in carrying out its responsibilities relating to
(i) the identification and selection of qualified individuals to become Board
members and members of Board committees; and (ii) the development, adoption and
periodic monitoring/updating of corporate governance principles and policies.

Each Committee is also responsible for producing a report to enable the
respective Corporation to make the required disclosures in the Corporation's
proxy statement, in accordance with applicable rules and regulations, regarding
the nominations process and the work of this Committee.

Composition

Each Committee will consist of no fewer than two members. All members of the
Committee must satisfy the independence requirements of the American Stock
Exchange LLC ("AMEX") and other applicable regulatory requirements.

Each Board shall appoint the members of the Committee. Subject to earlier
removal by the Board, each member shall serve until he or she is no longer a
director of the Corporation, and until his or her successor shall have been duly
elected and qualified. A Committee member may be removed by the Corporation's
Board at any time in its discretion, whereupon the resulting vacancy shall be
filled by the Board. The Committee members shall elect a chairperson by a vote
of a majority of the full Committee, or, if the members have failed to do so,
then the Board shall designate a chairperson.

Each Committee may form and delegate authority to subcommittees of this
Committee when appropriate.

Structure and Meetings

The chairperson shall, after consultation with the other members of the
Committee,

(i) determine the dates, times and places for meetings of the Committee, and

(ii) set the agenda for each meeting. The Committee shall hold at least one
meeting each year, and such additional meetings as the chairperson determines
are warranted under the circumstances in order for the Committee to fulfill its
mandate. The chairperson of the respective Committee shall preside at each
meeting of the Committee, except that in the absence of the chairperson at any
particular meeting, then the Committee member designated by the chairperson
shall preside at such meeting. A majority of the total number of Committee
members then in office shall constitute a quorum for the transaction of
committee business and all matters to be decided by the Committee shall be
decided by the affirmative vote of a majority of the members present in person
or by proxy at a duly called meeting of the Committee.

Duties and Responsibilities

Each Committee shall have the following power, authority and responsibilities:

1. Identify individuals qualified to become Board members and members of Board
committees (including members to fill vacancies), consistent with criteria
approved by the Board, and to recommend particular director nominees to the
Board (including nominations for re-election of continuing/incumbent directors)
for the next annual meeting of stockholders, except if and to the extent the
Corporation is legally required by contract or otherwise to provide third
parties with the ability to nominate directors (in which case the selection and
nomination of such directors need not be subject to action by this Committee).
Each Committee will seek candidates for the Board that have exhibited strong
decision-making ability, substantial business experience, relevant knowledge,
skills or technological expertise and exemplary personal integrity and
reputation. Each Committee will have the sole authority to retain and terminate
any search firm to be used to assist the Committee, and will have sole authority
to approve the firm's fees and other retention terms. Each Committee will also
have authority to obtain advice and assistance from internal or external legal,
accounting or other advisors at the Corporation's expense and will have sole
authority to approve the any such advisor's fees and other retention terms.

2. Develop and recommend to the respective Corporation's Board a set of
corporate governance guidelines and principles applicable to the Corporation,
including, without limitation, (i) a requirement that the Corporation's
non-management directors meet at regularly scheduled executive sessions without
Corporation management, (ii) director qualification standards (including
qualification standards for service on Board committees), including
independence, (iii) director responsibilities, including attendance at meetings
and advance review of materials, (iv) director access to management and
independent advisors, (v) director orientation and continuing education; (vi)
management succession, including principles for CEO selection and performance
review; and (vii) annual evaluation of Board and committee performance.

3. Monitor data submitted to the Board by individual directors that may impact
independence and make recommendations to the Board regarding action, if any,
that may be required in view of such data.

4. Consider and make recommendations to the Board on membership of Board
committees and the responsibilities of those committees to enhance overall Board
performance.

5. Periodically evaluate and make recommendations with respect to: (i) director
qualifications and selection criteria; and (ii) board size and composition.

6. Periodically review and make recommendations with respect to the corporate
governance guidelines and code of ethics.

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

8. Perform such other duties and responsibilities as may be assigned to the
Committee from time to time by the Board.

Operating Policies

1. Each Committee may, at its discretion, keep the minutes of all Committee
meetings (designating in its discretion such individuals to record the minutes)
and approve them by subsequent action. Each Committee will circulate the
approved minutes, if any are taken, of the Committee meetings to the full Board
for review.

2. Each Committee will determine its rules of procedure in accordance with the
Corporation's principles of corporate governance and the Corporation's By-laws.

At each regular Board meeting held following a Committee meeting, the
chairperson of the Committee will report to the Board regarding the actions
taken by and the activities and findings of the Committee since the last Board
meeting, as well as any recommendations for action by the Board when
appropriate.

CORNERSTONE TOTAL RETURN FUND, INC.
PROXY CARD FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of Cornerstone Total Return Fund, Inc. (the
"Fund") hereby constitutes and appoints Messrs. Ralph W. Bradshaw, William A.
Clark, 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 Stockholders of the Fund to be
held at Fifth Floor Conference Room, One West Pack Square, Asheville, NC 28801 ,
on May 10, 2005 at 11:00 a.m., Eastern 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
Stockholders 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 Stockholders, in the interest of the
Fund.

(Continued and to be dated and signed on reverse side)
--------------------------------------------------------------------------------

ANNUAL MEETING OF SHAREHOLDERS OF
CORNERSTONE TOTAL RETURN FUND, INC.

May 10, 2005

PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]

1. To approve the election of seven (7) Directors: FOR WITHHOLD

Ralph W. Bradshaw / / / /

William A. Clark / / / /

Edwin Meese III / / / /

Thomas H. Lenagh / / / /

Scott B. Rogers / / / /

Andrew A. Strauss / / / /

Glenn W. Wilcox, Sr. / / / /

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.

FOR AGAINST ABSTAIN

/ / / / / /

Your proxy is important to assure a quorum at the Annual Meeting of Stockholders
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 Stockholders and vote in person.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

SIGNATURE OF SHAREHOLDER____________________________ DATE___________________

NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.