CORNERSTONE TOTAL RETURN FUND, INC.
383 Madison Avenue
New York, New York 10179
-------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 16, 2007
-------------------------------------
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 April 16, 2007 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 2008 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 February 16, 2007
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: March 1, 2007
UNLESS YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN AND
MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED REPLY ENVELOPE. YOUR PROMPT
RESPONSE WILL ASSURE A QUORUM AT THE MEETING.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Fund involved in validating your vote
if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
REGISTRATION
CORPORATE ACCOUNTS VALID SIGNATURE
(1) ABC Corp ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d/ 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA. John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
CORNERSTONE TOTAL RETURN FUND, INC.
383 Madison Avenue
New York, New York 10179
-------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
to be held on April 16, 2007
-------------------------------------
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 2007 (the "Meeting") to be held at 11:00 a.m., eastern time, on April
16, 2007 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 March 1,
2007.
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 February 16, 2007 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
February 16, 2007 was 5,186,446. 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
March 1, 2007.
-1-
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 2006 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 2008 Annual Meeting of Stockholders or thereafter until each of
their successors are 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, birth dates and
principal occupations of each of the nominees for election as Directors:
NOMINEES
NAME AND POSITION(S) TERM OF DIRECTORSHIPS HELD BY
ADDRESS(1) WITH OFFICE PRINCIPAL OCCUPATION OVER NOMINEE FOR DIRECTOR
(BIRTH DATE) FUND SINCE PAST 5 YEARS OUTSIDE OF FUND COMPLEX*
-----------------------------------------------------------------------------------------------------------------------
Thomas H. Lenagh Director; 2002 Independent Financial Advisor; Director of The Adams
(Nov. 1924) Audit, Director of Photonics Products Groups; Express Company and
Nominating Director of Cornerstone Strategic Value Petroleum and Resources
and Corporate Fund, Inc.; Director of Adams Express Corporation
Governance and Petroleum and Resources; Retired
Committee Treasurer and Investment Manager of
Member Ford Foundation
Edwin Meese III Director; 2001 Distinguished Fellow, The Heritage Director of Carrington,
(Dec. 1931) Audit, Foundation Washington D.C.; Laboratories Inc.
Nominating Distinguished Visiting Fellow at the
and Corporate Hoover Institution, Stanford
Governance University; Senior Adviser,
Committee Revelation L.P.; formerly U.S.
Member Attorney General under President
Ronald Reagan; Director of
Cornerstone Strategic Value Fund, Inc.
Scott B. Rogers Director; 2001 Chairman, Board of Health Partners, Chairman and Director,
(July 1955) Audit, Inc.; Chief Executive Officer, Recycling Unlimited;
Nominating Asheville Buncombe Community Director of A-B Vision
and Corporate Christian Ministry; and President, Board, Interdenominational
Governance ABCCM Doctor's Medical Clinic; Ministerial Faith Alliance,
Committee Appointee, NC Governor's Commission on Partnerships, Inc.
Member Welfare to Work; Director of
Cornerstone Strategic Value Fund, Inc.
-2-
NAME AND POSITION(S) TERM OF DIRECTORSHIPS HELD BY
ADDRESS(1) WITH OFFICE PRINCIPAL OCCUPATION OVER NOMINEE FOR DIRECTOR
(BIRTH DATE) FUND SINCE PAST 5 YEARS OUTSIDE OF FUND COMPLEX*
-----------------------------------------------------------------------------------------------------------------------
Andrew A. Strauss Director; 2001 Attorney and senior member of Director of Memorial
(Nov.1953) Chairman of Strauss & Associates, Mission Hospital
Nominating P.A., Attorneys, Asheville and Foundation, Deerfield
and Corporate Hendersonville, NC; previous Episcopal Retirement
Governance President of White Knight Community and Asheville
Committee and Healthcare, Inc. and LMV Symphony
Audit Committee Leasing, Inc., a wholly owned
Member subsidiary of Xerox Credit
Corporation; Director of Cornerstone
Strategic Value Fund, Inc.
Glenn W. Wilcox, Sr. Director; 2001 Chairman of the Board and Chief Director of Wachovia
(Dec. 1931) Audit Committee Executive Officer of Wilcox Travel Corp. WNC Regional
Chairman, Agency, Inc.; Director of Advisory Board;
Nominating Cornerstone Strategic Value Director of Champion
and Corporate Fund, Inc. Industries, Inc.;
Governance and Chairman of Tower
Committee Member Associates, Inc.
(a real-estate venture)
INTERESTED NOMINEES
Ralph W. Bradshaw Chairman 2001 President, Cornerstone Advisors, Previous Director of The
(Dec. 1950)** of the Board Inc.; Financial Consultant; President Austria Fund, Inc.
of Directors and Director of Cornerstone Strategic
and Value Fund, Inc.
President
William A. Clark Director 2004 Director of Cornerstone Advisors, Previous Director of The
(Oct. 1945)** and Vice Inc.; Director and Vice President Austria Fund, Inc.
President of Cornerstone Strategic Value Fund,
Inc.; former financial consultant of
Deep Discount Advisors, Inc.
------------
(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, 2006, the Fund Complex is comprised of the Fund and
Cornerstone Strategic Value Fund, Inc., both of which are managed by
Cornerstone Advisors, Inc. Each of the above Nominees oversee both of the
Funds in the Fund Complex.
** Mr. Bradshaw and Mr. Clark are "interested persons" as defined in the
Investment Company Act of 1940 because of their affiliation with
Cornerstone Advisors, Inc.
-3-
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, 2006. 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 ALL FUNDS OVERSEEN BY
NAME SECURITIES IN THE FUND DIRECTORS IN FUND COMPLEX
---------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
Edwin Meese III 0 0
Andrew A. Strauss 0 $1-$10,000
Thomas H. Lenagh 0 0
Glenn W. Wilcox Sr. $10,001-$50,000 $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:
NAME AND
ADDRESS TERM OF
(BIRTH DATE) POSITION WITH FUND OFFICE SINCE PRINCIPAL OCCUPATION OVER PAST 5 YEARS
------------------------------------------------------------------------------------------------------------
Gary A. Bentz Chief Compliance 2004 Chairman and Chief Financial Officer
(June 1956)(1) Officer of Cornerstone Advisors, Inc.;
previous Director, Vice President and
Treasurer of the Fund and Cornerstone
Strategic Value Fund, Inc.; Financial
Consultant, C.P.A.; Chief Compliance
Officer of Cornerstone Strategic Value
Fund, Inc.
Thomas R. Westle Secretary 2001 Partner, Blank Rome LLP, a law firm;
405 Lexington Ave. previous partner at Spitzer & Feldman P.C.,
New York, NY 10174 a law firm; Secretary of Cornerstone
(Dec. 1953) Strategic Value Fund, Inc.
Jodi B. Levine Treasurer 2004 Associate Director, Bear, Stearns & Co. Inc.;
(Aug. 1969)(1) Treasurer of Cornerstone Strategic Value
Fund, Inc.
------------
(1) The officers' address is the same as the Fund's.
-4-
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
calendar year. The following table provides information concerning the
compensation paid during the year ended December 31, 2006, 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
NAME OF DIRECTOR SINCE FROM FUND FUND COMPLEX* PAID TO DIRECTOR
-------------------------------------------------------------------------------------------------
Glenn W. Wilcox, Sr. 2001 $10,000 $30,000
Andrew A. Strauss 2001 $10,000 $30,000
Edwin Meese III 2002 $10,000 $30,000
Scott B. Rogers 2001 $10,000 $30,000
Thomas H. Lenagh 2002 $10,000 $30,000
----------------
* For compensation purposes, Fund Complex refers to the Fund and Cornerstone
Strategic Value Fund, Inc., both of which were managed by Cornerstone
Advisors, Inc. during the year ended December 31, 2006.
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.
THE AUDIT COMMITTEE
During the calendar year ended December 31, 2006, 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 Board of
Directors has adopted an Audit Committee Charter. 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 four
(4) times during the 2006 calendar 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,
-5-
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 2008 annual
meeting of Stockholders pursuant to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, is November 1, 2007. 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 December 1,
2007 nor earlier than the close of business on November 1, 2007. 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, 2006, the Nominating Committee
met and discussed the nomination of all directors for the 2006 Annual Meeting of
Stockholders. In 2007, the Committee met and discussed the nomination of all of
the Directors of the Fund for the 2007 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
In 2007, 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 LLP, to discuss and review the Fund's
audited financial statements for the calendar year ended December 31, 2006. 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 calendar year ended December 31,
2006 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.
-6-
The Audit Committee of the Board of Directors has selected Tait, Weller
& Baker LLP 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, 2006, was the firm of Tait, Weller & Baker LLP.
The Audit Committee has selected Tait, Weller & Baker LLP to be the Fund's
registered public accounting firm for the calendar year ended December 31, 2007.
A representative of Tait, Weller & Baker LLP 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 LLP as of or for the year ended December 31, 2006 and 2005 were:
SERVICE 2006 2005
--------------------------------------------------------------------------------
Audit Fees $ 13,000 $12,300
Audit-Related Fees 0 0
Tax Fees (1) 2,500 2,300
All Other Fees 0 0
-------- -------
Total $ 15,500 $14,600
======== =======
------------
(1) Tax services in connection with the Fund's excise tax calculations and
review of the Fund's applicable tax returns.
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, 2006 and 2005, 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, 2006 and
2005, 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 LLP are compatible with maintaining Tait,
Weller & Baker LLP'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, 2006, 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 LLP did not perform any services
on behalf of Cornerstone Advisors, Inc.
-7-
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, 2006.
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 SHARES OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED
--------------------------------------------------------------------------------
None
Additionally, on February 16, 2007, Cede & Co., a nominee for participants
in the Depository Trust Company, held of record 4,844,394 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.
-8-
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 2008, 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: March 1, 2007
-9-
CORNERSTONE TOTAL RETURN FUND, INC.
PROXY CARD FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 2007
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. William A. Clark, Andrew A.
Strauss, and Glenn W. Wilcox, Sr., 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 April 16, 2007 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 STOCKHOLDERS OF
CORNERSTONE TOTAL RETURN FUND, INC.
April 16, 2007
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1 (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 / / / /
Thomas H. Lenagh / / / /
Edwin Meese III / / / /
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 STOCKHOLDER____________________________ DATE___________________
SIGNATURE OF STOCKHOLDER____________________________ 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.