Edgar Filing: PROGRESSIVE RETURN FUND INC

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:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant toss.240.14a-11(c) orss.240.14a-12

PROGRESSIVE RETURN FUND, INC.
Name of Registrant as Specified In Its Charter

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

[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:

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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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4) Proposed maximum aggregate value of transaction:

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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 such 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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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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THIS PRELIMINARY PROXY MATERIAL IS FILED
FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY.

PROGRESSIVE RETURN FUND, INC.
383 Madison Avenue
New York, New York 10179

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On Thursday, April 18, 2002

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Progressive Return Fund, Inc. (the "Fund"), a Maryland
corporation, will be held at the executive offices of Bear Stearns Funds
Management Inc., 383 Madison Avenue, 13th Floor, Conference Room 301, New York,
New York 10179 on Thursday, April 18, 2002, at 11:00 a.m., for the following
purposes:

1. To elect two Class II Directors to hold office until the year 2005
Annual Meeting of Stockholders (Proposal 1);

2. To ratify the selection of Tait, Weller & Baker as the Fund's
independent accountants for the year ending December 31, 2002
(Proposal 2);

3. To approve a one-for-four reverse stock split of the Fund's issued and
outstanding shares of common stock and the amendment to the Articles
of Incorporation (Proposal 3); and

4. 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 15, 2002 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 to any stockholder by writing to the Fund at c/o Bear Stearns Funds
Management Inc., 383 Madison Avenue, 23rd Floor, New York, New York 10179, or by
calling collect (212) 272-2093.

By Order of the Board of Directors,

Thomas R. Westle
Secretary
Dated March 25, 2002

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

PROGRESSIVE 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 Thursday, April 18, 2002

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GENERAL

This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Progressive Return Fund, Inc., a
Maryland corporation (the "Fund") for use at the Annual Meeting of Stockholders
for the year 2002 (the "Meeting") to be held at the executive offices of Bear
Stearns Funds Management Inc., 383 Madison Avenue, 13th Floor, Conference Room
301, New York, New York 10179 on Thursday, April 18, 2002, at 11:00 a.m., New
York time, 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 on or about March 21, 2002.

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. Edwin Meese III and Ralph W.
Bradshaw as the nominees for Director, FOR the ratification of the selection of
Tait, Weller & Baker as the independent accountants of the Fund for the year
ending December 31, 2002, and FOR the approval of the one-for-four reverse stock
split of the Fund's issued and outstanding shares of common stock and the
amendment to the Articles of Incorporation.

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.

-1-

Under the By-Laws of the Fund, a quorum is constituted by the presence
in person or by proxy of the holders of record one-third of the outstanding
shares of common stock of the Fund entitled to vote at the Meeting. 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 to a date not more than one
hundred twenty (120) days after the original record date to permit further
solicitation of proxies. 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 15, 2002 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 15, 2002 was _________. The Fund is a closed-end,
non-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 at c/o Bear Stearns Funds
Management Inc., 383 Madison Avenue, New York, New York 10179, or by telephone
by calling the Fund collect. This report is not to be regarded as
proxy-soliciting material.

This Proxy Statement is first being mailed to stockholders on or about
March 25, 2002.

-2-

PROPOSAL NO. 1

ELECTION OF DIRECTORS

In accordance with the Fund's By-laws, the Fund's Board of Directors is
divided into three classes: Class I, Class II and Class III. Each class has a
term of three years and each year the term of office of one class expires. The
effect of these staggered terms is to limit the ability of other entities or
persons to acquire control of the Fund by delaying the replacement of a majority
of the Board of Directors.

At the Meeting, stockholders will be asked to elect two Class II
Directors to hold office until the year 2005 Annual Meeting of Stockholders or
thereafter until each of their respective successors is duly elected and
qualified. The term of office of the Class I Directors, currently consisting of
Messrs. Thomas H. Lenagh and Andrew A. Strauss, expires at the year 2004 Annual
Meeting of Stockholders or thereafter in each case until their successors are
duly elected and qualified. The term of office of the Class III Directors,
Messrs. Glenn W. Wilcox, Sr. and Scott B. Rogers, expires at the year 2003
Annual Meeting of Stockholders or thereafter in each case until their successors
are duly elected and qualified.

At the Meeting, stockholders will be asked to vote for the election of
Messrs. Ralph W. Bradshaw and Edwin Meese III as Class II Directors to serve
until the year 2005 Annual Meeting of Stockholders or thereafter until each of
their successors is 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.

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 and Edwin Meese III. 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 Class II Directors, and the
number of shares of common stock of the Fund beneficially owned by each of them,
directly or indirectly, as of March 15, 2002:

-3-

NOMINEES

Class II Directors to serve until the Year 2005 Annual Meeting of Stockholders:

POSITION
WITH THE SHARES OF COMMON STOCK
PRINCIPAL OCCUPATION FUND BENEFICIALLY OWNED*
NOMINEE OVER LAST 5 YEARS SINCE AGE AMOUNT %
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Edwin Meese III Distinguished Fellow, The Heritage 2001 70 --** --%
The Heritage Foundation Foundation, Washington D.C.;
214 Massachusetts Ave NE Distinguished Visiting Fellow at the
Washington D.C. 20002 Hoover Institution, Stanford
University; Distinguished Senior
Fellow at the Institute of United
States Studies, University of
London; Formerly U.S. Attorney
General under President Ronald
Reagan; Director of Cornerstone
Strategic Value Fund, Inc., The
Cornerstone Strategic Return Fund,
Inc. and Perrigrine Corporation
(2001).

Ralph W. Bradshaw*** Chairman of the Board of Directors 1999 51 2,500** --%
One West Pack Square and President of the Fund;
Suite 1650 President, Director and Shareholder
Asheville, NC 28801 of Cornerstone Advisors, Inc.; Vice
President, Deep Discount Advisors,
Inc. (1993-1999); Director of The
Austria Fund, Inc., The SmallCap
Fund, Inc., Cornerstone Strategic
Value Fund, Inc., EIS Fund, Inc. and
The Cornerstone Strategic Return
Fund, Inc.

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* Unless otherwise noted, each nominee directly owns and has sole voting
and investment power with respect to the listed shares.

** For this purpose "beneficial ownership" is defined under Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The information as to beneficial ownership is based upon
information furnished to the Fund by the directors.

*** Mr. Bradshaw is an "interested person" as defined in the Investment
Company Act of 1940 ("Investment Company Act").

-4-

REMAINING BOARD OF DIRECTORS

The following tables set forth the names, ages and principal
occupations of each of the remaining Directors of the Fund, and the number of
shares of common stock of the Fund beneficially owned by them, directly or
indirectly, as of March 15, 2002:

Class I Directors serving until the Year 2004 Annual Meeting of Stockholders:

Andrew A. Strauss Attorney and senior member of 2000 48 400** --%
77 Central Avenue Strauss & Associates, P.A.,
Suite F Attorneys, Asheville, N.C.; previous
Asheville, NC 28801 President of White Knight
Healthcare, Inc. and LMV Leasing,
Inc., a wholly owned subsidiary of
Xerox Credit Corporation; Director
of The Cornerstone Strategic Return
Fund, Inc., Cornerstone Strategic
Value Fund, Inc. and EIS Fund, Inc.,
Memorial Mission Hospital Foundation
and Deerfield Episcopal Retirement
Community.

Thomas H. Lenagh Chairman of the Board of Inrad 2001 79 --** --%
13 Allen's Corner Road Corp.; Independent Financial
Flemington, NJ 08822 Adviser; Director of Cornerstone
Strategic Value Fund, Inc., The
Cornerstone Strategic Return Fund,
Inc., Gintel Fund, The Adams Express
Corp. and Petroleum and Resources
Corporation, and ICN Pharmaceuticals

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* Unless otherwise noted, each director directly owns and has sole voting
and investment power with respect to the listed shares.

-5-

Class III Directors serving until the Year 2003 Annual Meeting of Stockholders:

POSITION SHARES OF COMMON STOCK
WITH THE BENEFICIALLY OWNED ON*
PRINCIPAL OCCUPATION FUND
DIRECTOR OVER LAST 5 YEARS SINCE AGE AMOUNT %
----------------------------------------------------------------------------------------------------------------

Glenn W. Wilcox, Sr. Chairman of the Board and Chief 2000 70 1,000** --%
One West Pack Square Executive Officer of Wilcox Travel
Suite 1700 Agency; Director, Champion
Asheville, NC 28801 Industries, Inc.; Chairman, Tower
Associates, Inc. (a real estate
venture); Member of the Board of
Wachovia Corp.; Board Trustee and
Chairman, Appalachian State
University; Board Trustee and
Director, Mars Hill College;
Director of Cornerstone Strategic
Value Fund, Inc., The Cornerstone
Strategic Return Fund, Inc. and EIS
Fund, Inc.

Scott B. Rogers Chief Executive Officer, Asheville 2000 46 --** --%
30 Cumberland Ave. Buncombe Community Christian
Asheville, NC 28801 Ministry; President, ABCCM Doctor's
Medical Clinic; Director of
Southeastern Jurisdiction Urban
Networkers; Director, A-B Vision
Board, Appointee, NC Governor's
Commission on Welfare to Work;
Chairman and Director, Recycling
Unlimited; Director,
Interdenominational Ministerial
Alliance; Director of Cornerstone
Strategic Value Fund, Inc., The
Cornerstone Strategic Return Fund,
Inc. and EIS Fund, Inc.

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* Unless otherwise noted, each director directly owns and has sole voting
and investment power with respect to the listed shares.

-6-

EXECUTIVE OFFICERS

In addition to Mr. Bradshaw, the current officers of the Fund are:

OFFICER
OFFICER TITLE AGE SINCE
------- ----- --- -----
Gary A. Bentz Vice President 45 2001
One West Pack Square and Treasurer
Suite 1650
Asheville, NC 28801

Thomas R. Westle Secretary 48 2001
405 Park Avenue
New York, New York 10022

Mr. Bentz, currently serves as the Vice President of Cornerstone
Advisors, Inc. ("Cornerstone Advisors"), the Fund's investment manager; as a
Director to The Austria Fund, Inc. and EIS Fund, Inc.; and as Treasurer and Vice
President of Cornerstone Strategic Value Fund, Inc., The Cornerstone Strategic
Return Fund, Inc. and EIS Fund, Inc., three other funds which Cornerstone
Advisors serves as investment manager. From 1993-2000, Mr. Bentz served as the
Chief Financial Officer of Deep Discount Advisors, Inc., a registered investment
adviser.

Mr. Westle has served as a partner of Spitzer & Feldman P.C., a law firm,
since 1998. Prior to this, Mr. Westle was a partner at Battle Fowler LLP. Mr.
Westle also serves as the Secretary for Cornerstone Strategic Value Fund, Inc.,
The Cornerstone Strategic Return Fund, Inc. and EIS Fund, Inc.

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 manager during its prior
fiscal year. The following table provides information concerning the
compensation paid during the year ended December 31, 2001, to each Director of
the Fund. All of the Directors received compensation for serving as a Director
of Cornerstone Strategic Value Fund, Inc. and The Cornerstone Strategic Return
Fund, Inc., which were also managed by Cornerstone Advisors during the year
ended December 31, 2001. Please note that the Fund has no bonus, profit sharing,
pension or retirement plans.

-7-

Aggregate
Compensation Total Compensation From Other Total Compensation From All
Director From Fund for Funds Advised by Cornerstone Funds Advised by Cornerstone
Name of Director Since 2001 Advisors for 2001 Advisors for 2001
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Ralph W. Bradshaw 1999 $24,671 $33,950 $58,621

Glenn W. Wilcox, Sr. 2000 $7,850 $18,300 $26,150

Andrew A. Strauss 2000 $7,850 $18,300 $26,150

Edwin Meese III 2001 $6,650 $15,800 $22,450

Scott B. Rogers 2000 $7,850 $18,300 $26,150

Thomas H. Lenagh 2001 $6,650 $16,350 $23,000

William A. Clark* 2000 $7,295 $24,450 $31,745

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* Mr. Clark resigned from his position as a member of the Board of Directors of
the Fund on January 31, 2001.

Each Director attended at least seventy-five (75%) percent or more of
the six (6) meetings of the Board of Directors (including regularly scheduled
and special meetings) held during the period for which he was a Director.

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 manager and its directors and officers, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange, Inc. The Fund believes that the
Fund's directors and officers, the Fund's investment manager and its directors
and officers have complied with all applicable filing requirements during the
year ended December 31, 2001.

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. EDWIN MEESE III AND RALPH W. BRADSHAW AS CLASS II
DIRECTORS OF THE FUND.

-8-

PROPOSAL NO. 2

RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

The second proposal to be submitted will be the ratification or
rejection of the selection by the Board of Directors of Tait, Weller & Baker as
independent public accountants of the Fund for the year ending December 31,
2002. At a meeting held on February 25, 2002, the Board of Directors, including
those directors who are not "interested persons" of the Fund, approved the
selection of Tait, Weller & Baker for the year ending December 31, 2002. Such
selection is being submitted to the stockholders for ratification. The
engagement of Tait, Weller & Baker is conditioned on the right of the Fund, by
majority vote of its stockholders, to terminate such employment.

Tait Weller & Baker has informed the Fund that neither it nor any of
its partners has any direct or indirect financial interest in the Fund. A
representative of Tait Weller & Baker will be available by telephone at the
Meeting and will have the opportunity to make a statement if the representative
so desires and will be available to respond to appropriate questions.

REQUIRED VOTE

Ratification of the selection of Tait Weller & Baker as independent
accountants of the Fund requires the affirmative vote of the holders of a simple
majority, defined as a majority of the votes cast by 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 this proposal, abstentions and broker non-votes
will be counted as shares present at the Meeting for quorum purposes and may be
considered votes cast for the foregoing purpose.

THE BOARD OF DIRECTORS, INCLUDING THE "NON-INTERESTED" DIRECTORS, RECOMMENDS
THAT THE STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF TAIT, WELLER & BAKER AS THE
FUND'S INDEPENDENT PUBLIC ACCOUNTANTS.

-9-

PROPOSAL NO. 3

APPROVAL OF ONE-FOR-FOUR REVERSE STOCK SPLIT OF
THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK
AND THE AMENDMENT TO THE ARTICLES OF INCORPORATION

The Board of Directors has determined that it is in the best interests
of the Fund and the stockholders to approve an amendment to Article V of the
Fund's Articles of Incorporation to effect a reverse stock split of the Fund's
common stock on the basis of one new share of common stock for each four shares
(1-for-4) of presently outstanding common stock.

The Articles of Amendment to the Articles of Incorporation will not
reduce the total number of authorized shares of capital stock of 100,000,000
shares, or the par value of the Fund's common stock. As of March 15, 2002,
________ shares of common stock were issued and outstanding, ______ shares were
held in treasury and _____ shares remained unissued.

The text of the proposed amendment is attached to this Proxy Statement
as Exhibit A.

POTENTIAL EFFECTS OF THE REVERSE STOCK SPLIT

The immediate effect of a reverse stock split would be to reduce the
number of shares of common stock outstanding, thereby, increasing the net asset
value ("NAV") per share. A reduction of the number of shares outstanding could
potentially impact the liquidity of the Fund's common stock on the NYSE,
especially in the case of larger block trades. A reverse stock split may also
result in an increase in the market price of the Fund's common stock. However,
the effect of any reverse stock split upon the market price of the Fund's common
stock cannot be predicted. The Fund cannot assure stockholders that the market
price of its common stock after the reverse stock split will rise in exact
proportion to the reduction in the number of shares of common stock outstanding.
Also, as stated above, there can be no assurance that a reverse stock split
would lead to a sustained increase in the market price of the Fund's common
stock, that the market price would remain above the thresholds required by the
NYSE, or that the Fund will be able to continue to meet the other continued
listing requirements of the NYSE.

EFFECTS ON OWNERSHIP BY INDIVIDUAL STOCKHOLDERS. If the Fund implements a
reverse stock split, the number of shares of common stock held by each
stockholder would be reduced by dividing the number of shares held immediately
before the reverse split by the exchange ratio. Any shares below one whole share
shall receive fractional shares.

-10-

The Fund will issue fractional shares for any fractional interest in a
share to which such stockholder would otherwise be entitled as a result of the
reverse split, as described below. The reverse stock split would affect the
Fund's common stock uniformly and would not affect any stockholder's percentage
ownership interests in the Company or proportionate voting power.

OTHER EFFECTS ON OUTSTANDING SHARES. The reverse stock split may result in some
stockholders owning "odd-lots" of less than 100 shares of common stock.
Brokerage commissions and other costs of transactions in odd-lots may be higher
than the costs of transactions in "round-lots" of even multiples of 100 shares.

PROCEDURE FOR EFFECTING THE REVERSE STOCK SPLIT AND EXCHANGE OF STOCK
CERTIFICATES

If the Stockholders approve the proposed amendment to the Fund's
Articles of Incorporation, the Board of Directors may elect whether or not to
declare the reverse stock split at any time after the Meeting. The reverse stock
split would be implemented by filing the Articles of Amendment to the Articles
of Incorporation with the Maryland Department of Assessments and Taxation, and
the reverse stock split would become effective on the date of the filing.

As of the effective date of a reverse stock split, each certificate
representing shares of the Fund's common stock before the reverse stock split
would be deemed, for all corporate purposes, to evidence ownership of the
reduced number of shares of common stock resulting from the reverse stock split.

The Fund expects that its transfer agent would act as the exchange
agent for purposes of implementing the exchange of stock certificates. As soon
as practicable after the effective date, stockholders would be notified of the
effectiveness of the reverse split. Stockholders of record would receive a
letter of transmittal requesting them to surrender their stock certificates for
stock certificates reflecting the adjusted number of shares as a result of the
reverse stock split. Persons who hold their shares in brokerage accounts or
"street name" would not be required to take any further actions to effect the
exchange of their certificates. No new certificates would be issued to a
stockholder until the stockholder has surrendered the stockholder's outstanding
certificate(s) together with the properly completed and executed letter of
transmittal to the exchange agent. Until surrender, each certificate
representing shares before the reverse stock split would continue to be valid
and would represent the adjusted number of shares based on the exchange ratio of
the reverse stock split. Stockholders should not destroy any stock certificate
and should not submit any certificates until they receive a letter of
transmittal.

-11-

FRACTIONAL SHARES

The Fund will issue fractional shares in connection with a reverse
stock split. Stockholders will receive fractional shares if they hold a number
of shares not evenly divisible by the exchange ratio.

NO APPRAISAL RIGHTS

No appraisal rights are available under the Maryland General
Corporation Law with respect to the reverse stock split, and we will not
independently provide stockholders with any such rights. There may exist other
rights or actions under state law for stockholders who are aggrieved by reverse
stock splits generally.

ACCOUNTING CONSEQUENCES

The reverse stock split will not affect the par value of our common
stock. As a result, on the effective date of the reverse stock split, the stated
capital on our balance sheet attributable to our common stock will be reduced in
proportion with the exchange ratio, and the additional paid-in capital account
will be credited with the amount by which the stated capital is reduced. The per
share net income or loss and net book value of our common stock will be
increased because there will be fewer shares of our common stock outstanding.

U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of material U.S. federal income tax
consequences of the reverse stock split and does not purport to be complete. It
does not discuss any state, local, foreign or minimum income or other tax
consequences. Also, it does not address the tax consequences to holders that are
subject to special tax rules, including banks, insurance companies, regulated
investment companies, personal holding companies, foreign entities, nonresident
alien individuals, broker-dealers and tax-exempt entities. The discussion is
based on the provisions of the United States federal income tax law as of the
date hereof, which is subject to change retroactively as well as prospectively.
This summary also assumes that the shares are held as a "capital asset," as
defined in the Internal Revenue Code of 1986, as amended (generally, property
held for investment). The tax treatment of a stockholder may vary depending upon
the particular facts and circumstances of the stockholder. Each stockholder is
urged to consult with the stockholder's own tax advisor with respect to the
consequences of the reverse stock split.

-12-

No gain or loss should be recognized by a stockholder upon the
stockholder's exchange of shares pursuant to the reverse stock split. The
aggregate tax basis of the shares received in the reverse stock split, including
any fraction of a share deemed to have been received, would be the same as the
stockholder's aggregate tax basis in the shares exchanged. The stockholder's
holding period for the shares would include the period during which the
stockholder held the pre-split shares surrendered in the reverse stock split.

Our view regarding the tax consequence of the reverse stock split are
not binding upon the Internal Revenue Service or the courts, and there can be no
assurance that the Internal Revenue Service or the courts will accept the
positions expressed above. The state and local tax consequences of the reverse
stock split may vary significantly as to each stockholder, depending upon the
state in which he or she resides. Accordingly, each stockholder should consult
with his or her own tax advisor with respect to all of the potential tax
consequences of the reverse stock split.

Required Vote

The affirmative vote of a majority of all outstanding shares of common
stock of the Company entitled to vote at the Meeting is required for approval of
the reverse stock split and the amendment to the Articles of Incorporation.
Abstentions and broker non-votes will have the same effect as a vote against the
proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
PROPOSED REVERSE STOCK SPLIT AND THE AMENDMENT TO THE ARTICLES OF INCORPORATION.

-13-

AUDIT COMMITTEE

The Fund's Audit Committee is currently composed of five independent
directors, Messrs. Wilcox, Strauss, Meese, Lenagh and Rogers. The principal
functions of the Audit Committee include but are not limited to: (i)
recommendations to the Board for the appointment of the Fund's independent
accountants; (ii) review of the scope and anticipated cost of the independent
accountant's audit; and (iii) consideration of the independent accountant's
reports concerning their conduct of the audit, including any comments or
recommendations the Board of Directors might make in connection thereto. The
Audit Committee convened three times during the fiscal year ended December 31,
2001. Each member of the Audit Committee attended at least seventy-five percent
(75%) or more of the three meetings of the Audit Committee.

On June 1, 2000, the Audit Committee, followed by the full Board of
Directors, adopted a written charter setting forth the duties and
responsibilities of the Audit Committee, and such charter was reapproved by the
Board of Directors on February 9, 2001 and February 14, 2002, respectively. The
Audit Committee recommends to the Board of Directors, subject to stockholder
approval, the selection of Tait, Weller & Baker, as the Fund's independent
accountants.

Since inception, PricewaterhouseCoopers LLP had acted as the Fund's
independent public accountants. The following table sets forth the aggregate
fees billed by PricewaterhouseCoopers LLP, the independent accountants for the
Fund's most recent fiscal year, for professional services rendered for: (i) the
audit of the Fund's annual financial statements and the review of financial
statements included in the Fund's reports to stockholders ("Audit Fees"); (ii)
financial information systems design and implementation services provided to the
Fund, its investment manager and entities that control, are controlled by or
under common control with the investment manager that provides services to the
Fund ("Financial Information Systems Design"); and (iii) all other services
provided to the Fund, its investment manager and entities that control, are
controlled by or under common control with the Fund's investment manager that
provides services to the Fund ("All Other Fees").

---------------- --------------------------------------- -----------------------
AUDIT FEES FINANCIAL INFORMATION SYSTEMS DESIGN ALL OTHER FEES
---------------- --------------------------------------- -----------------------
$ $ $
---------------- --------------------------------------- -----------------------

The Fund has no nominating or compensation committees.

-14-

AUDIT COMMITTEE REPORT

The Audit Committee has met and held discussions with the Fund's
Administrator, Bear Stearns Funds Management Inc., and the Fund's independent
accountants. 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, 2001 filed with the
Securities and Exchange Commission.

Respectfully submitted,

Glenn W. Wilcox, Sr.
Andrew A. Strauss
Edwin Meese III
Thomas H. Lenagh
Scott B. Rogers

-15-

INFORMATION PERTAINING TO THE FUND'S
INVESTMENT ADVISER AND ADMINISTRATOR

THE INVESTMENT ADVISER

Cornerstone Advisors, Inc., which has its principal office at One West
Pack Square, Suite 1650, Asheville, North Carolina 28801, 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, Inc. is the investment manager to three other closed-end funds,
Cornerstone Strategic Value Fund, Inc., EIS Fund, Inc. and The Cornerstone
Strategic Return Fund, Inc.

Mr. Bradshaw owns fifty percent (50%) of the total outstanding shares
of common stock of Cornerstone Advisors, Inc. and is Chairman of the Board,
President and Director of the Fund. Mr. Bentz, who is the Vice President and
Treasurer of the Fund, also owns fifty percent (50%) of the total outstanding
shares of common stock of Cornerstone Advisors, Inc. The address of Messrs.
Bradshaw and Bentz are 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.

INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS

The following table sets forth the beneficial ownership of shares of
the Fund, as of February 13, 2002, by each person known to the Fund to be deemed
a beneficial owner of more than five (5%) percent of the total outstanding
shares of common stock of the Fund:

-16-

NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF COMMON STOCK % OF FUND'S OUTSTANDING
BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED

Deep Discount Advisors, Inc.(1) 721,900 --%
One West Pack Square, Suite 777
Asheville, NC 28801

Ron Olin Investment(1) 544,500 --%
Management Company
One West Pack Square, Suite 777
Asheville, NC 28801

Ron Olin(2) 1,268,100 --%
One West Pack Square, Suite 777
Asheville, NC 28801

------------------------------------------------------------------------------------------------------------------------------------
(1) Based solely upon information presented in a Schedule 13G/A, dated
February 15, 2002, filed jointly by Deep Discount Advisors, Inc. and
Ron Olin Investment Management Company. Pursuant to that Schedule 13G,
each respective entity has both sole voting and dispositive power, as
well as shared voting and dispositive power, over the shares
beneficially owned. The Fund does not have any knowledge of who the
ultimate beneficiaries are of the Fund's Shares.

(2) Based solely upon information presented in Schedule 13D, dated November
23, 2001.

Additionally, on March 15, 2002, Cede & Co., a nominee for participants
in the Depository Trust Company, held of record _________ shares of the Fund,
equal to approximately ____% of the outstanding shares of the Fund.

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.

-17-

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 2003, must be received by the Fund addressed to Progressive Return Fund,
Inc. c/o Bear Stearns Funds Management Inc., 383 Madison Avenue, 23rd Floor, New
York, New York 10179 for inclusion in the Fund's proxy statement and proxy
relating to that meeting in advance of the meeting as set forth below. Any
stockholder who desires to bring a proposal at the Fund's 2003 Annual Meeting of
Stockholders without including such proposal in the Fund's proxy statement must
deliver (via the U.S. Post Office or such other means that guarantees delivery)
written notice thereof to the Secretary of the Fund c/o Bear Stearns Funds
Management Inc., 383 Madison Avenue, 13th Floor, New York, New York 10179 no
earlier than one hundred twenty (120) calendar days and no later than ninety
(90) days prior to the anniversary of the date of the Notice of the preceding
year's Annual Meeting of Stockholders.

PROGRESSIVE RETURN FUND, INC.

Thomas R. Westle
Secretary

Dated: March 25, 2002

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.

-18-

ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
OF
PROGRESSIVE RETURN FUND, INC.

Progressive Return Fund, Inc. (hereinafter referred to as the
"Corporation"), a Maryland corporation, hereby certifies to the State Department
of Assessments and Taxation of Maryland:

FIRST: Article V Section (1) of the Articles of Incorporation is hereby amended
in its entirety to read as follows:

(1) The total number of shares of capital stock that the
Corporation shall have authority to issue is one hundred
million (100,000,000) shares, of the par value of one tenth of
one percent ($0.001) per share and of the aggregate par value
of one hundred thousand dollars ($100,000), all of which one
hundred million (100,000,000) shares are designated Common
Stock.

Simultaneously with the effective date of this amendment (the
"Effective Date"), each share of the Corporation's common
stock par value $0.001 per share, issued and outstanding
immediately prior to the Effective Date (the "Pre-Split Common
Stock") shall automatically and without any action on the part
of the holder thereof be reclassified as and changed (the
"Reverse Stock Split") into 0.25 of one share of common stock
par value $0.001 per share (the "Post Split Common Stock").

SECOND: The foregoing amendment to the Articles of Incorporation of the
Corporation has been approved by the Board of Directors of the Corporation.

IN WITNESS THEREOF, the Corporation has caused these presents to be signed in
its name and on its behalf by its President and witnessed by its Secretary on
this ____ day of April, 2002.

PROGRESSIVE RETURN FUND, INC.

By: ______________________________
Name: Ralph W. Bradshaw
Title: President
WITNESS:

By: _________________________
Name: Thomas R. Westle
Title: Secretary

A-1

FORM OF PROXY CARD

PROGRESSIVE RETURN FUND, INC.

The undersigned stockholder of Progressive Return Fund, Inc. (the
"Fund") hereby constitutes and appoints Messrs. Ralph W. Bradshaw, Thomas R.
Westle and Frank J. Maresca, 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 on Thursday, April 18, 2002 at 11:00 a.m., New York time, at the
offices of Bear Stearns Funds Management Inc., 383 Madison Avenue, 13th Floor,
Conference Room 301, New York, New York 10179, 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 (a) the election of two Class II Directors; (b) the ratification of
the selection by the Board of Directors of the Fund's independent accountants;
(c) approve the one-for-four reverse stock split of the Fund's issued and
outstanding shares of common stock and the amendment to the Articles of
Incorporation; and (d) the consideration and vote of such other matters as may
properly come before the Annual Meeting of Stockholders or any adjournment
thereof. If no such specification is made, the undersigned will vote FOR each of
the proposals set forth above, and in their discretion with respect to such
other matters as may properly come before the Annual Meeting of Stockholders.

--------------------------------------------------------------------------------

THIS PROXY IS SOLICITED ON BEHALF OF PROGRESSIVE RETURN FUND,
INC.'S BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON

April 18, 2002

(To be dated and signed on reverse side)

B-1

Please mark boxes / / or /X/ in blue or black ink.

PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE:

--------
X
--------

--------------------------------------------------------------------------------
1. To elect two (2) Class III Directors: FOR WITHHELD
Edwin Meese III [ ] [ ]

Ralph W. Bradshaw [ ] [ ]

2. To ratify the selection by the Board of Directors of Tait, Weller &
Baker as the Fund's independent accountants for the year ending
December 31, 2002:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To approve the one-for-four reverse stock split of the issued and
outstanding shares of common stock and the amendment to the Articles of
Incorporation:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

In their discretion, the proxies are authorized to consider and vote upon
such matters as may properly come before said Meeting or any adjournment
thereof.

B-2

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE STOCKHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN
FAVOR OF EACH PROPOSAL.

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 effect 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(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.

B-3