SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
Cornerstone Total Return Fund, Inc.
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(set forth the amount on which the
filing fee is calculated and state how it was determined): (4)
Proposed maximum aggregate value of transaction: (5) Total fee paid:
[ ] Fee paid previously with preliminary materials. [ ] Check box if any
part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CORNERSTONE TOTAL RETURN FUND, INC.
260 Madison Avenue
New York, NY 10016
------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 20, 2010
------------------------------------
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 20, 2010: THE NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS AND PROXY STATEMENT ARE AVAILABLE ON THE INTERNET AT
WWW.PROXYVOTE.COM.
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 July 20, 2010 at Fifth
Floor Conference Room, One West Pack Square, Asheville, NC 28801, for the
following purposes:
1. To approve the election of six directors to hold office until the
year 2011 Annual Meeting of Stockholders (Proposal 1); and
2. To consider and vote upon an advisory proposal from the Board of
Directors regarding the Fund's managed distribution plan (Proposal
2); and
3. To consider and vote upon such other matters as may properly come
before said Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on June 1, 2010, as
the record date for the determination of stockholders entitled to notice of, and
to vote at, this Meeting or any adjournment or postponement thereof. The stock
transfer books will not be closed.
Copies of the Fund's most recent report may be ordered free of charge by
any stockholder by writing to the Fund, c/o Ultimus Fund Solutions, LLC, 260
Madison Avenue, New York, NY 10016, or by calling collect (513) 326-3597.
By Order of the Board of Directors
Gary A. Bentz
Secretary
Dated: June 9, 2010
WHETHER OR NOT 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.
260 Madison Avenue
New York, NY 10016
-----------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS to be held on
July 20, 2010
-----------------------------------
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 2010 (the "Meeting") to be held at 11:00 a.m., eastern time, on July
20, 2010 at the Fifth Floor Conference Room, One West Pack Square, Asheville, NC
28801, and at any and all adjournments or postponements 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 June 9, 2010.
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. Attendance by a Stockholder at the Meeting does
not, in itself, revoke a proxy. 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, Thomas H. Lenagh, Edwin
Meese III, Scott B. Rogers, Andrew A. Strauss, and Glenn W. Wilcox, Sr. as
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 requiring that the broker has 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. The Fund
expects that the solicitation will be primarily by mail, but also may include
telephone, electronic, oral or other means of communication, including personal
interviews conducted by officers of the Fund or Ultimus Fund Solutions, LLC, the
administrator to the Fund (the "Administrator").
-1-
Only holders of issued and outstanding shares of the Fund's common stock of
record at the close of business on June 1, 2010 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 June
1, 2010 was 2,854,588. The Fund is a diversified closed-end management
investment company.
Copies of the Fund's most recent report may be ordered free of charge to
any Stockholder by writing to the Fund, c/o Ultimus Fund Solutions, LLC, 260
Madison Avenue, New York, NY 10016, or by telephone (513) 326-3597. This report
is not to be regarded as proxy-soliciting material.
This Proxy Statement is first being mailed to Stockholders on or about June
9, 2010.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors currently consists of six members. All of the
members were approved by the Stockholders at the Year 2009 Annual Meeting.
At the Meeting, Stockholders will be asked to vote for the election of
Messrs. Ralph W. Bradshaw, Thomas H. Lenagh, Edwin Meese III, Scott B. Rogers,
Andrew A. Strauss, and Glenn W. Wilcox, Sr., as directors to serve until the
year 2011 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, Thomas H. Lenagh, Edwin Meese III, Scott B. Rogers, Andrew A. Strauss,
and Glenn W. Wilcox, Sr. 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.
-2-
The following table sets forth the names, addresses, birth dates and
principal occupations of each of the nominees for election as Directors:
NOMINEES
NUMBER OF
PORTFOLIOS
IN FUND DIRECTORSHIPS HELD
NAME AND POSITION(S) TERM OF COMPLEX BY NOMINEE FOR
ADDRESS(1) WITH OFFICE PRINCIPAL OCCUPATION OVER OVERSEEN DIRECTOR OUTSIDE OF
(BIRTH DATE) FUND SINCE PAST 5 YEARS BY DIRECTOR FUND COMPLEX*
-------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED NOMINEES
Thomas H. Lenagh Director; 2002 Independent Financial Advisor; 3 Director of Adams
(Nov. 1924) Audit, Director of Photonics Products Group; Express Company,
Nominating Director/Trustee of Cornerstone Petroleum and
and Corporate Strategic Value Fund, Inc. and Resources
Governance Cornerstone Progressive Return Fund Corporation, and
Committee PPGI Industries
Member
Edwin Meese III Director; 2001 Distinguished Fellow, The Heritage 3
(Dec. 1931) Audit, Foundation Washington D.C.;
Nominating Distinguished Visiting Fellow at the
and Corporate Hoover Institution, Stanford
Governance University; Senior Adviser,
Committee Revelation L.P.; Director/Trustee of
Member Cornerstone Strategic Value Fund, Inc.
and Cornerstone Progressive Return Fund
Scott B. Rogers Director; 2001 Chairman, Board of Health Partners, 3 Chairman and Director,
(July 1955) Audit, Inc.; Chief Executive Officer, Recycling Unlimited;
Nominating Asheville Buncombe Community Director of A-B
and Corporate Christian Ministry; and President, Vision Board,
Governance ABCCM Doctor's Medical Clinic; Interdenominational
Committee Appointee, NC Governor's Commission on Ministerial Faith
Member Welfare to Work; Director/Trustee of Alliance
Cornerstone Strategic Value Fund, Inc. Partnerships, Inc.
and Cornerstone Progressive Return Fund
-3-
NUMBER OF
PORTFOLIOS
IN FUND DIRECTORSHIPS HELD
NAME AND POSITION(S) TERM OF COMPLEX BY NOMINEE FOR
ADDRESS(1) WITH OFFICE PRINCIPAL OCCUPATION OVER OVERSEEN DIRECTOR OUTSIDE OF
(BIRTH DATE) FUND SINCE PAST 5 YEARS BY DIRECTOR FUND COMPLEX*
-----------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED NOMINEES (continued)
Andrew A. Strauss Director; 2001 Attorney and senior member of 3 Director of Deerfield
(Nov. 1953) Chairman of Strauss & Associates, Episcopal Retirement
Nominating P.A., Attorneys, Asheville and Community
and Corporate Hendersonville, NC; previous
Governance President of White Knight
Committee and Healthcare, Inc. and LMV
Audit Committee Leasing, Inc., a wholly owned
Member subsidiary of Xerox Credit Corporation;
Director/Trustee of Cornerstone Strategic
Value Fund, Inc. and Cornerstone
Progressive Return Fund
Glenn W. Wilcox, Sr. Director; 2001 Chairman of the Board of Tower 3 Director of Wachovia/
(Dec. 1931) Chairman of Associates, Inc.; Chairman of Wells Fargo WNC
Audit Committee the Board and Chief Executive Regional Advisory
and Nominating Officer of Wilcox Travel Agency, Board;
and Corporate Inc.; Director/Trustee of Director of Champion
Governance Cornerstone Strategic Value Industries, Inc.
Committee Member Fund, Inc. and Cornerstone
Progressive Return Fund
INTERESTED NOMINEE
Ralph W. Bradshaw Chairman 2001 President, Cornerstone Advisors, 3
(Dec. 1950)** of the Board Inc.; Financial Consultant; President
of Directors and Director/Trustee of Cornerstone
and Strategic Value Fund, Inc. and
President Cornerstone Progressive Return Fund
----------------
(1) The mailing address of each Nominee/Director with respect to Fund
operations is 260 Madison Avenue, New York, NY 10016.
* As of December 31, 2009, the Fund Complex is comprised of the Fund,
Cornerstone Strategic Value Fund, Inc., and Cornerstone Progressive
Return Fund, all of which are managed by Cornerstone Advisors, Inc.
Each of the above Nominees oversee all of the Funds in the Fund
Complex.
** Mr. Bradshaw is an "interested person" as defined in the Investment
Company Act of 1940 because of his affiliation with Cornerstone
Advisors, Inc.
-4-
The Board believes that the significance of each Director's experience,
qualifications, attributes or skills is an individual matter (meaning that
experience that is important for one Director may not have the same value for
another) and that these factors are best evaluated at the Board level, with no
single Director, or particular factor, being indicative of the Board's
effectiveness. The Board determined that each of the Directors is qualified to
serve as a Director of the Fund based on a review of the experience,
qualifications, attributes and skills of each Director. In reaching this
determination, the Board has considered a variety of criteria, including, among
other things: character and integrity; ability to review critically, evaluate,
question and discuss information provided, to exercise effective business
judgment in protecting shareholder interests and to interact effectively with
the other Directors, the Investment Adviser, other service providers, counsel
and the independent registered accounting firm ("independent auditors"); and
willingness and ability to commit the time necessary to perform the duties of a
Director. Each Director's ability to perform his duties effectively is evidenced
by his experience or achievements in the following areas: management or board
experience in the investment management industry or companies or organizations
in other fields, educational background and professional training; and
experience as a Director of the Fund. In addition, the Board values the diverse
skill sets and experiences that each Trustee contributes. The Board considers
that its diversity as a whole is as a result of a combination of Trustees who
are working in the private, as opposed to public, sector, those that are retired
from professional work and the various perspectives that each Director provides
as a result of his present experiences and his background. Information as of
June 1, 2010 discussing the specific experience, skills, attributes and
qualifications of each Director which led to the Board's determination that the
Director should serve in this capacity is provided below.
Ralph W. Bradshaw. Mr. Bradshaw is co-founder of Cornerstone Advisors, Inc. and
has served as its President since its inception in 2001. He brings over 18 years
of extensive investment management experience and also formerly served as a
Director of several other closed-end funds. Prior to founding the Adviser, he
served in consulting and management capacities for registered investment
advisory firms specializing in closed-end fund investments. His experiences
included developing and implementing successful trading strategies with a
variety of underlying portfolios containing domestic and international equity
and fixed-income investments. In addition, he has been a financial consultant
and has held managerial positions or operated small businesses in several
industries. Mr. Bradshaw holds a B.S. in Chemical Engineering and an M.B.A. Mr.
Bradshaw provides the Board with effective business judgment and an ability to
interact effectively with the other Directors, as well as with the Investment
Adviser, other service providers, counsel and the Fund's independent auditor.
Mr. Bradshaw commits a significant amount of time to the Fund as a Director, in
addition to in his capacity as President of the Investment Adviser. The Board
values his strong moral character and integrity.
-5-
Thomas H. Lenagh. Mr. Lenagh has been involved in the investment company and
financial industry for over 40 years, including as a member of the Board of
Directors of the Merrill Lynch Funds for over ten years. Earlier in his career,
Mr. Lenagh served as the Chief Executive Officer of a public company for
approximately five years. In addition, to the Cornerstone Funds Boards, he
serves on the Boards of three other public companies. Mr. Lenagh is a Chartered
Financial Analyst. Mr. Lenagh provides the Board with effective business
judgment and an ability to interact effectively with the other Directors, as
well as with the Investment Adviser, other service providers, counsel and the
Fund's independent auditor. Mr. Lenagh has demonstrated a willingness to commit
the time necessary to serve as an effective Director. The Board values his
strong moral character and integrity.
Edwin Meese III. Mr. Meese holds the Ronald Reagan Chair in Public Policy at The
Heritage Foundation and is also the Chairman of The Heritage Foundation's Center
for Legal and Judicial Studies. He is the former chairman of the governing board
of George Mason University in Virginia and serves on the board of several civic
and educational organizations. Previously, Mr. Meese served as the 75th Attorney
General of the United States and immediately prior to that as Counsellor to the
President of the United States for Ronald Reagan. Mr. Meese provides the Board
with effective business judgment and an ability to interact effectively with the
other Directors, as well as with the Investment Adviser, other service
providers, counsel and the Fund's independent auditor. Mr. Meese has
demonstrated a willingness to commit the time necessary to serve as an effective
Director. The Board values his strong moral character and integrity.
Scott B. Rogers. Reverend Rogers has been the Executive Director of a regional
community ministry organization for over 30 years. In addition to the leadership
and management skills obtained through this work, he contributes a non-profit
perspective and community insight to the Board's discussions and deliberations,
which provides desirable diversity. Mr. Rogers provides the Board with effective
business judgment and an ability to interact effectively with the other
Directors, as well as with the Investment Adviser, other service providers,
counsel and the Fund's independent auditor. Mr. Rogers has demonstrated a
willingness to commit the time necessary to serve as an effective Director. The
Board values his strong moral character and integrity.
Andrew A. Strauss. Mr. Strauss is an experienced attorney with a securities law
background. He currently manages a law firm specializing in estate planning,
probate and estate administration. In addition, Mr. Strauss served in an
executive capacity with a large public company for over nine years. He is a
graduate of the Wharton School of the University of Pennsylvania and Georgetown
University Law Center. Mr. Strauss provides the Board with effective business
judgment and an ability to interact effectively with the other Directors, as
well as with the Investment Adviser, other service providers, counsel and the
Fund's independent auditor. Mr. Strauss has demonstrated a willingness to commit
the time necessary to serve as an effective Director. The Board values his
strong moral character and integrity.
Glenn W. Wilcox, Sr. Mr. Wilcox has been a business owner for over 55 years. He
has previous business experience in the real estate development, radio and oil
and gas exploration industries. He serves on the Board of Directors and Audit
Committee of another public company. From 1996 until 2004, Mr. Wilcox was a
member of the Board of Appalachian State University, and was Chairman of the
Board from 2001-2003. He has been a private investor in public equities for over
50 years. Mr. Wilcox provides the Board with effective business judgment and an
ability to interact effectively with the other Directors, as well as with the
Investment Adviser, other service providers, counsel and the Fund's independent
auditor. Mr. Wilcox has demonstrated a willingness to commit the time necessary
to serve as an effective Director. The Board values his strong moral character
and integrity.
-6-
Specific details regarding each Director's principal occupations during the
past five years are included in the table above. The summaries set forth above
as to the experience, qualifications, attributes and/or skills of the Directors
do not constitute holding out the Board or any Director as having any special
expertise or experience, and do not impose any greater responsibility or
liability on any such person or on the Board as a whole than would otherwise be
the case.
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, 2009. 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 IN THE FUND DIRECTORS IN FUND COMPLEX
------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
Thomas H. Lenagh 0 $1-$10,000
Edwin Meese III 0 0
Scott B. Rogers 0 Over $100,000
Andrew A. Strauss $1-$10,000 $1-$10,000
Glenn W. Wilcox Sr. $1-$10,000 $10,001-$50,000
INTERESTED DIRECTOR
Ralph W. Bradshaw $10,001-$50,000 Over $100,000
EXECUTIVE OFFICERS
In addition to Mr. Bradshaw, the current principal officers of the Fund are:
NAME AND
ADDRESS (1) TERM OF
(BIRTH DATE) POSITION WITH FUND OFFICE SINCE PRINCIPAL OCCUPATION OVER PAST 5 YEARS
--------------------------------------------------------------------------------
Gary A. Bentz Chief 2004, 2008, Chairman and Chief Financial Officer
(June 1956) Compliance 2009 of Cornerstone Advisors, Inc.; previous
Officer; Secretary, Director, Vice President and Treasurer of the
and Fund and Cornerstone Total Return Fund, Inc.;
Assistant Financial Consultant, C.P.A.; Chief Compliance
Treasurer Officer, Secretary, and Assistant Treasurer of
Cornerstone Strategic Value Fund, Inc. and
Cornerstone Progressive Return Fund
Frank J. Maresca Treasurer 2009 Executive Vice President of Ultimus Fund
(October 1958) Solutions, LLC (since March 2009) previous
Executive Director, JP Morgan Chase & Co.; Previous
President of Bear Stearns Funds Management Inc.;
Previous Senior Managing Director of Bear
Stearns & Co. Inc.; Treasurer of Cornerstone
Total Return Fund, Inc. and Cornerstone
Progressive Return Fund (since May 2009)
------------
(1) The officers' address with respect to Fund operations is the same as the
Fund's.
-7-
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, 2009, 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 $12,000 $49,000.00
Andrew A. Strauss 2001 $11,000 $47,000.00
Edwin Meese III 2001 $11,500 $48,000.00
Scott B. Rogers 2001 $12,000 $49,000.00
Thomas H. Lenagh 2002 $11,000 $47,000.00
Ralph W. Bradshaw 2001 0 0
-----------------
* For compensation purposes, Fund Complex refers to the Fund,
Cornerstone Strategic Value Fund, Inc., and Cornerstone Progressive
Return Fund, all of which were managed by Cornerstone Advisors, Inc.
during the year ended December 31, 2009.
DIRECTOR TRANSACTIONS WITH FUND AFFILIATES. As of December 31, 2009,
neither the Independent Directors nor members of their immediate family owned
securities beneficially or of record in Cornerstone Advisers, Inc., or an
affiliate of Cornerstone Advisors, Inc. Furthermore, over the past five years,
neither the Independent Directors nor members of their immediate family have any
direct or indirect interest, the value of which exceeds $120,000, in Cornerstone
Advisors, Inc. or any of its affiliates. In addition, since the beginning of the
last two fiscal years, neither the Independent Directors nor members of their
immediate family have conducted any transactions (or series of transactions) or
maintained any direct or indirect relationship in which the amount involved
exceeds $120,000 and to which Cornerstone Advisors, Inc. or any affiliate
thereof was a party.
BOARD COMPOSITION AND LEADERSHIP STRUCTURE
The Board consists of six individuals, one of whom is an Interested
Director. The Chairman of the Board, Mr. Bradshaw, is the Interested Director
and is the President of the Fund, the President of the Investment Adviser, and
is the President and a director or trustee of Cornerstone Strategic Value Fund,
Inc. and Cornerstone Progressive Return Fund, respectively. The Board does not
have a lead independent director.
-8-
The Board believes that its structure facilitates the orderly and efficient
flow of information to the Directors from the Investment Adviser and other
service providers with respect to services provided to the Fund, potential
conflicts of interest that could arise from these relationships and other risks
that the Fund may face. The Board further believes that its structure allows all
of the Directors to participate in the full range of the Board's oversight
responsibilities. The Board believes that the orderly and efficient flow of
information and the ability to bring each Director's talents to bear in
overseeing the Fund's operations is important, in light of the size and
complexity of the Fund and the risks that the Fund faces. The Board and its
committees review their structure regularly, to help ensure that it remains
appropriate as the business and operations of the Fund and the environment in
which the Fund operates changes.
Currently, the Board has an Audit Committee and a Nominating and Corporate
Governance Committee. The responsibilities of each committee and its members are
described below. Each of the Directors attended at least seventy-five (75%)
percent of the five (5) meetings of the Board of Directors and four (4) meetings
of its committees(including regularly scheduled and special meetings) held
during the period for which he was a member.
THE AUDIT COMMITTEE
The Fund has a standing Audit Committee (the "Committee"), which is
comprised of Messrs. Wilcox, Sr., Lenagh, Meese, Rogers and Strauss, all of whom
are directors who are not interested persons of the Fund, as such term is
defined in Section 2(a)(19) of the Investment Company Act. The Committee has a
written 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 2009 calendar year.
The Audit Committee currently does not have an Audit Committee Financial
Expert, as such term is defined in Section 407 of the Sarbanes-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.
-9-
THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Fund has a standing Nominating and Corporate Governance Committee (the
"Committee"), which is comprised of Messrs. Wilcox, Sr., Lenagh, Meese, Rogers
and Strauss, all of whom are directors who are not interested persons of the
Fund, as such term is defined in Section 2(a)(19) of the Investment Company Act.
The Committee has a written charter. In addition to its responsibility to
oversee the corporate governance of the Fund, the Committee is appointed to
identify and select qualified candidates that have exhibited strong decision
making ability, substantial business experience, relevant knowledge of the
investment company 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 2011 annual
meeting of Stockholders pursuant to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, is April 21, 2011. Stockholders wishing to submit
proposals or director nominations that are 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 April 21,
2011 nor earlier than the close of business on May 21, 2011. 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.
In 2010, the Committee met and discussed the nomination of the Directors of
the Fund for the 2010 Annual Meeting of Shareholders. Each Nominee was
recommended by the non-interested Directors. The Nominating and Corporate
Governance Committee convened four (4) times during the 2009 calendar year.
-10-
BOARD'S ROLE IN RISK OVERSIGHT OF THE FUND
The Board oversees risk management for the Fund directly and, as to certain
matters, through its Audit and Nominating and Corporate Governance Committees.
The Board exercises its oversight in this regard primarily through requesting
and receiving reports from and otherwise working with the Fund's senior officers
(including the Fund's Chief Compliance Officer), portfolio management personnel
of the Adviser, the Fund's independent auditors, legal counsel and personnel
from the Fund's other service providers. The Board has adopted, on behalf of the
Fund, and periodically reviews with the assistance of the Fund's Chief
Compliance Officer, policies and procedures designed to address certain risks
associated with the Fund's activities. In addition, the Adviser and the Fund's
other service providers also have adopted policies, processes and procedures
designed to identify, assess and manage certain risks associated with the Fund's
activities, and the Board receives reports from service providers with respect
to the operation of these policies, processes and procedures as required and/or
as the Board deems appropriate. The Board does not believe that a separate Risk
Oversight Committee is necessary for effective risk oversight at this time, but
intends to continuously evaluate how it assesses risk and will consider again in
the future whether any changes to their current structure are prudent.
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, THOMAS H. LENAGH, EDWIN MEESE III, SCOTT
B. ROGERS, ANDREW A. STRAUSS, AND GLENN W. WILCOX, SR. AS DIRECTORS OF THE FUND.
PROPOSAL NO. 2
SEEKING STOCKHOLDER ADVISORY INPUT ON THE STRUCTURE AND CONTINUATION OF
THE FUND'S MANAGED DISTRIBUTION PLAN ("MDP")
Why are stockholders being asked to provide advisory input regarding the Fund's
MDP?
Generally, a closed-end investment company's distributions would fall into one
of three broad categories:
1. No MDP - distributions by closed-end investment companies would be limited to
those required by Internal Revenue Code ("IRC") regulation to consist of net
income, along with realized net short-term and long-term capital gains ("Net
Earnings").
2. Low-level MDP - regular distributions by closed-end investment companies
representing less than 10% of net assets per year including those required by
IRC regulation that consist of Net Earnings and tax-free return-of-capital, if
necessary, to maintain the desired level of distributions.
3. High-level MDP - regular distributions by closed-end investment companies
representing 10% or more of net assets per year including those required by IRC
regulation that consist of Net Earnings and tax-free return-of-capital, if
necessary, to maintain the desired level of distributions.
The Fund initiated a fixed, monthly distribution to stockholders in 2002 which,
with interim adjustments and extensive disclosure, continues to be a high- level
MDP. This MDP has been maintained through the historic economic volatility,
increased regulatory scrutiny and challenging markets of the intervening years.
The Board continues to believe that the MDP is in the best interests of the Fund
and its Stockholders, however, the Board has determined that it is appropriate
at this time to poll Stockholders for their preferences regarding the
continuation and structure of the MDP.
-11-
What are features of the Fund's MDP?
The Fund's MDP provides a regular monthly distribution to stockholders that is
adjusted through an annual resetting of the monthly distribution amount per
share based on the Fund's net asset value on the last business day in each
October. The terms of the MDP have been reviewed and approved at least annually
by the Fund's Board and can be modified at their discretion. To the extent that
distributions exceed the current Net Earnings of the Fund, the balance of the
amounts paid out will be generated from sales of portfolio securities held by
the Fund, which will be characterized under the IRC either as short-term or
long-term capital gains or a tax-free return-of-capital. To the extent these
distributions are not represented by net investment income and capital gains,
they will not represent yield or investment return on the Fund's investment
portfolio. A return-of-capital distribution reduces the cost basis of an
investor's shares in the Fund. The Board currently plans to maintain the MDP
policy even if regulatory requirements would make part of a return-of-capital,
necessary to maintain the distribution, taxable to stockholders and to disclose
that portion of the distribution that is classified as ordinary income. Although
it has no current intention to do so, the Board may terminate the MDP at any
time and such termination may have an adverse effect on the market price for the
Fund's common shares.
What are benefits of the MDP?
The Fund's MDP historically has maintained a stable, high rate of distribution.
The Fund's Board remains convinced that its Stockholders are well served by a
policy of regular distributions which increase liquidity and provide flexibility
to individual stockholders in managing their investment. Stockholders have the
option of reinvesting all or a portion of these distributions in additional
shares of the Fund through the Fund's reinvestment plan or receiving them in
cash. For more information regarding the Fund's reinvestment plan, stockholders
should carefully read the description of the dividend reinvestment plan
contained in the Fund's Reports to Stockholders.
What are risks of the MDP?
The Fund makes level distributions on a monthly basis and these distributions
are not tied to the Fund's net investment income and capital gains, and may not
represent yield or investment return on the Fund's portfolio. Under the MDP, the
Fund makes monthly distributions to stockholders at a rate that may include
periodic distributions of its Net Earnings or return-of-capital. As noted above,
Stockholders have the option of reinvesting all or a portion of these
distributions in additional shares of the Fund through the Fund's reinvestment
plan or receiving them in cash. In any fiscal year where total cash
distributions exceed Net Earnings and unrealized gain or loss for the year, such
excess will decrease the Fund's total assets and, as a result, will have the
likely effect of increasing the Fund's expense ratio. There is a risk that the
total Net Earnings and unrealized gain or loss for years from the Fund's
portfolio would not be great enough to fully offset the amount of cash
distributions paid to Fund stockholders. If this were to be the case, the Fund's
assets would be partially reduced by an equal amount, and there is no guarantee
that the Fund would be able to replace the assets. In addition, in order to make
such distributions, the Fund may need to sell a portion of its investment
portfolio at a time when independent investment judgment might not dictate such
action. Furthermore, the cash used to make distributions will not be available
for investment pursuant to the Fund's investment objective.
-12-
Funds maintain varying degrees of cash levels pursuant to market conditions and
the judgment of the portfolio manager. In addition, portfolio managers must
raise cash periodically to cover operating expenses. For any fund, to the extent
that cash is held at any given time for operating expenses or other purposes, it
will not be available for investment pursuant to that fund's investment
objective. In addition to these general cash requirements, a fund's MDP may also
require that securities be sold to raise cash for those stockholders who elect
to take cash distributions rather than reinvest in shares of the fund, in which
case, it will also not be available for investment pursuant to the fund's
investment objective. It is possible that a situation will occur where the MDP
contributes to a reduction of assets over an extended period of time such that
the assets of the Fund are reduced to a point where the Fund would no longer be
economically viable. In such event, the Fund would then need to take additional
actions, which might include, for example, liquidation or merger, to address the
situation. While this is one of the risk factors of any managed distribution
plan, including the MDP, it is important to note that the Fund's MDP was not
designed to be a mechanism for the dissolution of the Fund or a short-term
liquidation policy, and it is not the intention of the Board to allow the Fund
to self-liquidate through the unsupervised effects of the MDP. The Board
monitors the MDP and the Fund's asset levels regularly, and remains ready to
modify the terms of the MDP if, in its judgment, the Board believes it is in the
best interests of the Fund and its Stockholders.
A return-of-capital distribution reduces the cost basis of an investor's shares
in the Fund, which may make record-keeping by certain Stockholders more
difficult.
The Fund discloses the characterization of its distributions in notices to
Stockholders and press releases to the public. Notwithstanding these
communications, it is possible that the MDP may create potential confusion in
the marketplace as to whether the Fund's distributions are comprised of income
or return of capital and how such characterization may influence the market
price of the Fund's shares.
For the years 2005-2009, the Fund's distributions under the MDP were
characterized, on an annual basis, as set forth on the table below:
Cornerstone Total Return Fund, Inc.
Dividend and Distributions Paid from 2005 through 2009
Total Dividend ORDINARY INCOME CAPITAL GAINS RETURN-OF-CAPITAL
YEARS AND DISTRIBUTIONS AMOUNT ($) PERCENT AMOUNT ($) PERCENT AMOUNT ($) PERCENT
----------------------------------------------------------------------------------------------------------------
2005 $10,295,523 $ 299,210 2.91% $ - 0.00% $ 9,996,313 97.09%
2006 10,676,313 428,197 4.01% - 0.00% 10,248,116 95.99%
2007 11,211,715 513,683 4.58% - 0.00% 10,698,032 95.42%
2008 10,553,136 334,663 3.17% - 0.00% 10,218,473 96.83%
2009 5,317,678 - 0.00% - 0.00% 5,317,678 100.00%
THE BOARD OF DIRECTORS, INCLUDING THE INDEPENDENT DIRECTORS, REQUESTS THAT
STOCKHOLDERS PROVIDE INPUT REGARDING PROPOSAL 2 BY MARKING THE PROXY CARD
ACCORDINGLY.
-13-
AUDIT COMMITTEE REPORT
In 2010, the Audit Committee met with the Fund's Administrator Ultimus Fund
Solutions, LLC, 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, 2009. The Fund's independent
registered public accounting firm 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 and 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, 2009 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 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
-14-
RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Fund's independent registered public accounting firm for the calendar
year ended December 31, 2009, 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 ending December 31,
2010.
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, 2009 and 2008 were:
SERVICE 2009 2008
--------------------------------------------------------------------------------
Audit Fees $14,100 $14,100
Audit-Related Fees 0 0
Tax Fees (1) 3,000 3,000
All Other Fees 0 0
------- -------
Total $17,100 $17,100
======= =======
--------
(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. "Audit Fees" for the years ended December 31, 2009 and 2008, 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, 2009
and 2008, were for services performed in connection with income and excise tax
services other than those directly related to the audit of the income tax
accrual.
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, 2009, 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.
-15-
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
1075 Hendersonville Road, Suite 250, Asheville, NC 28803. 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 two other closed-end funds, Cornerstone Strategic
Value Fund, Inc. and Cornerstone Progressive Return Fund. Messrs. Bradshaw and
Bentz are the only stockholders of the Investment Adviser.
Mr. Bradshaw is President and Chairman of the Board of Directors of the
Fund. Mr. Bentz is Chief Compliance Officer, Secretary, and Assistant Treasurer
of the Fund.
THE ADMINISTRATOR
Ultimus Fund Solutions, LLC, whose address is 260 Madison Avenue, New York,
New York 10016, 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. 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, 2009.
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 at the close of
business on June 1, 2010:
NAME AND ADDRESS OF SHARES OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED
--------------------------------------------------------------------------------
None
-16-
Additionally, on June 1, 2010 Cede & Co., a nominee for participants in the
Depository Trust Company, held of record 2,644,470 shares of the Fund, equal to
approximately 92.64% 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, files reports and other information with the SEC.
Reports, proxy statements, registration statements and other information filed
by the Fund 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, 100 F Street, NE, 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 2011, must be received by the Fund addressed to Cornerstone Total Return
Fund, Inc., c/o Ultimus Fund Solutions, LLC, 260 Madison Avenue, New York, NY
10016,in advance of the meeting as set forth in this document.
CORNERSTONE TOTAL RETURN FUND, INC.
Gary A. Bentz, Secretary
Dated: June 9, 2010
-17-
CORNERSTONE TOTAL RETURN FUND, INC. PROXY CARD FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON July 20, 2010
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. Andrew A. Strauss, Scott B.
Rogers, 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 July 20, 2010 at 11:00 a.m., Eastern Time, or at any adjournment or
postponement 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 instructions with respect to the
election of the directors and the consideration and vote of such other matters
as may properly come before the Annual Meeting of Stockholders or any
adjournment or postponement 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.
_____
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 3 AND MAKES NO RECOMMENDATION ON 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 six (6) Directors:
NOMINEES:
/ / FOR ALL NOMINEES / / Ralph W. Bradshaw
/ / Thomas H. Lenagh
WITHHOLD AUTHORITY / / Edwin Meese III
/ / FOR ALL NOMINEES / / Scott B. Rogers
/ / Andrew A. Strauss
/ / FOR ALL EXCEPT / / Glenn W. Wilcox, Sr.
(See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: o
2. Regarding the Fund's Managed Distribution Plan, I believe it is best
that the Fund conduct which of the following:
(Mark One)
No Managed Distribution Plan / /
A Low-Level Managed Distribution Plan / /
A High-Level Managed Distribution Plan / /
Abstain / /
3. In their discretion, the proxies are authorized to consider and vote
upon such other 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.
To change the address on your account, please check the box at right and
indicate your new address in the address space above. [ ] Please note that
changes to the registered name(s) on the account may not be submitted by this
method.
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.