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 STRATEGIC VALUE 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 STRATEGIC VALUE FUND, INC.
383 Madison Avenue
New York, New York 10179
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on Friday, April 11, 2003
Dear Stockholder:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Cornerstone Strategic Value Fund, Inc. (the "Fund" or "CLM "), a
Maryland corporation, will be held at One West Pack Square, 5th Floor Conference
Room, Asheville, NC 28801 on Friday, April 11, 2003, at 12:00 a.m., Eastern
Time, for the following purposes:
1. To consider and vote upon the election of three (3) Class
II nominees standing for reelection to CLM's Board of
Directors, Messrs. Gary A. Bentz, Thomas H. Lenagh, and
Scott B. Rogers;
2. To transact such other business as may properly come before
the Meeting and any adjournment or postponement thereof.
The appointed proxies will vote in their discretion on any other
business that may properly come before the Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on February
18, 2003 as the Record Date for the determination of stockholders entitled to
vote at the Meeting and at any postponements or adjournments thereof. The stock
transfer books will not be closed. Copies of the Fund's most recent annual or
semi-annual report may be ordered free of charge to any stockholder by writing
to the Fund at c/o Bear Stearns Funds Management Inc., 383 Madison Avenue, 23rd
Floor, New York, NY 10179, or by calling the Fund collect at (212) 272-2093.
The persons named as proxies may propose one or more adjournments of
the Meeting if the necessary quorum to transact business or the vote required to
approve or reject any proposal is not obtained at the meeting. Any such
adjournment will require the affirmative vote of the holders of a majority of
CLM's shares present in person or by proxy at the Meeting. The persons named as
proxies will vote those proxies which they are entitled to vote on any such
proposal in accordance with their best judgment in the interest of CLM.
The enclosed proxy is being solicited on behalf of the Board of
Directors of CLM.
By Order of the Board of Directors,
Thomas R. Westle, Secretary
March 3, 2003
THE BOARD OF DIRECTORS OF CLM BELIEVES THAT THE ELECTION OF MESSRS. BENTZ,
LENAGH, AND ROGERS AS DIRECTORS IS IN THE BEST INTERESTS OF CLM AND ITS
STOCKHOLDERS AND RECOMMENDS THAT YOU READ THE ENCLOSED MATERIALS CAREFULLY AND
THEN VOTE "FOR" THE ELECTION OF THESE NOMINEES.
Important -- We urge you to sign and date the enclosed proxy card(s) and return
the card(s) in the enclosed addressed envelope which requires no postage and is
intended for your convenience. Your prompt return of the enclosed proxy card(s)
may save the necessity and expense of further solicitations to ensure a quorum
at the Meeting. If you can attend the Meeting and wish to vote your shares in
person at that time, you will be able to do so.
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 STRATEGIC VALUE FUND, INC.
383 Madison Avenue New York, New York 10179
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
To be held on Friday, April 11, 2003
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Cornerstone Strategic Value Fund, Inc.,
a Maryland corporation (the "Fund" or "CLM") for use at the Annual Meeting of
Stockholders for the year 2003 (the "Meeting") to be held at One West Pack
Square, 5th Floor Conference Room, Asheville, NC 28801 on Friday, April 11,
2003, at 12:00 a.m., Eastern time, and at any and all adjournments thereof. A
form of proxy is enclosed herewith.
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. Gary A. Bentz, Thomas H.
Lenagh, and Scott B. Rogers 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.
Under the By-Laws of the Fund, a quorum is constituted by the
presence in person or by proxy of the holders of record of one-third of the
outstanding shares of common stock of the Fund entitled to vote at the Meeting.
In the event that a quorum is not present at the Meeting, the persons named as
proxies may propose one or more adjournments of the Meeting to a date not more
than one hundred twenty (120) days after the original record date to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies which
they are entitled to vote FOR or AGAINST any such proposal in their discretion.
The cost of soliciting the proxies will be borne by the Fund. Proxy
solicitations will be made primarily by mail, but solicitations may also be made
by telephone, telegraph or personal interviews conducted by officers or
employees of the Fund or Bear Stearns Funds Management Inc., the administrator
to the Fund (the "Administrator").
Only holders of issued and outstanding shares of the Fund's common
stock of record at the close of business on February 18, 2003 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 18, 2003 was 3,806,900. The Fund is a closed-end,
diversified management investment company.
Copies of the Fund's most recent annual or semi-annual report may be
ordered free of charge to any stockholder by writing to the Fund at c/o Bear
Stearns Funds Management Inc., 383 Madison Avenue, New York, New York 10179, or
by calling collect (212) 272-2093. This report is not to be regarded as proxy
soliciting material. This Proxy Statement is first being mailed to Stockholders
on or about March 3, 2003.
PROPOSAL 1: ELECTION OF DIRECTORS
In accordance with the Fund's By-Laws, the Fund's Board of Directors
is divided into three classes: Class I, Class II and Class III. Each class has a
term of three years and each year the term of office of one class expires. The
effect of these staggered terms is to limit the ability of other entities or
persons to acquire control of the Fund by delaying the replacement of a majority
of the Board of Directors. At a meeting on December 2, 2002, the Board increased
the number of Directors to seven and elected Mr. Gary A. Bentz to fill the
additional director position until the year 2003 Annual Meeting of Shareholders.
At the Meeting, stockholders will be asked to elect three Class II
Directors to hold office until the year 2006 Annual Meeting of Stockholders or
thereafter until each of their respective successors is duly elected and
qualified. The term of office of the Class I Directors, currently consisting of
Messrs. Ralph W. Bradshaw and Edwin Meese III, expires at the year 2005 Annual
Meeting of Stockholders or thereafter in each case until their successors are
duly elected and qualified. The term of office of the Class III Directors,
Messrs. Glenn W. Wilcox, Sr. and Andrew A. Strauss, expires at the year 2004
Annual Meeting of Stockholders or thereafter in each case until their successors
are duly elected and qualified.
At the Meeting, stockholders will be asked to vote for the election
of Messrs. Thomas H. Lenagh, Scott B. Rogers, and Gary A. Bentz as Class II
Directors to serve until the year 2006 Annual Meeting of Stockholders or
thereafter until each of their successors is duly elected and qualified. If
elected, each nominee has consented to serve as a director of the Fund until his
successor is duly elected and qualified.
The persons named in the accompanying form of proxy intend to vote at
the Meeting (unless directed not to vote) FOR the election of Messrs. Thomas H.
Lenagh, Scott B. Rogers, and Gary A. Bentz. Each nominee has indicated that he
will serve if elected, and the Board of Directors has no reason to believe that
any of the nominees named above will become unavailable for election as a
director, but if any nominee should be unable to serve, the proxy will be voted
for any other person determined by the persons named in the proxy in accordance
with their judgment.
The following table sets forth the names, addresses, ages and
principal occupations of each of the nominees for election as Directors:
NOMINEES
Directorships held by
Term of Nominee for Director
Name, Address Position Office Principal Occupation during Outside of Fund
and Age with Fund Since past 5 years Complex*
CLASS II NON-INTERESTED NOMINEES TO SERVE UNTIL THE YEAR 2006 ANNUAL MEETING OF
STOCKHOLDERS:
Scott B. Rogers (47) Director 2000 Chief Executive Officer, Director of A-B
30 Cumberland Ave. Asheville Buncombe Vision Board;
Asheville, NC 28801 Community Christian Chairman and
Ministry; and President, Director, Recycling
ABCCM Doctor's Medical Unlimited and
Clinic; Appointee, NC Interdenominational
Governor's Commission on Ministerial Alliance;
Welfare to Work. and Director,
Southeastern
Jurisdiction Urban
Networkers.
DIRECTORSHIPS HELD BY
TERM OF NOMINEE FOR DIRECTOR
NAME, ADDRESS POSITION OFFICE PRINCIPAL OCCUPATION DURING OUTSIDE OF FUND
AND AGE WITH FUND SINCE PAST 5 YEARS COMPLEX*
------- --------- ----- ------------ --------
Thomas H. Lenagh Director 1987 Chairman of the Board of Director of Gintel
(80) Inrad Corp. and Independent Fund, The Adams
13 Allen's Corner Financial Adviser. Express Company
Road and Petroleum and
Flemington, NJ Resources
08822 Corporation.
Interested Nominee to serve until the Year 2006 Annual Meeting of Stockholders:
Gary A. Bentz (46)** Director, 2002 Chief Financial Officer of
One West Pack Square Vice Cornerstone Advisors,
Suite 1650 President Inc.; Director, Vice
Asheville, NC 28801 and President and Treasurer of
Treasurer the Funds in the Fund
Complex; Financial
Consultant; CPA; Chief
Financial Officer of Deep
Discount Advisors, Inc.
(1993-2000).
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* The Fund Complex consists of Progressive Return Fund, Inc., Cornerstone
Strategic Value Fund, Inc. and Cornerstone Total Return Fund, Inc. (f/k/a
EIS Fund, Inc.), all of which were advised by Cornerstone Advisors, Inc.
during the year ended December 31, 2002. Prior to October 31, 2002, the
Fund Complex included The Cornerstone Strategic Return Fund, Inc.
** Mr. Bentz is an "interested person" as defined in the Investment Company
Act of 1940 as amended ("Investment Company Act") because he is a director,
officer and 50% shareholder in Cornerstone Advisors, Inc., the Fund's
investment manager.
REMAINING BOARD OF DIRECTORS
The following tables set forth the names, addresses, ages and principal
occupations of each of the remaining Directors of the Fund:
Directorships held by
Term of Nominee for Director
Position Office Principal Occupation Outside of Fund
Name, Address and Age with Fund Since during past 5 years Complex*
CLASS I NON-INTERESTED DIRECTOR SERVING UNTIL THE YEAR 2005 ANNUAL MEETING OF
STOCKHOLDERS:
Edwin Meese III (71) Director 2001 Distinguished Fellow,
The Heritage Foundation The Heritage
214 Massachusetts Ave. Foundation,
NE Washington, D.C.;
Washington D.C. 20002 Distinguished Visiting
Fellow at the Hoover
Institution, Stanford
University;
Distinguished Senior
Fellow at the Institute of
United States Studies,
University of London;
and Formerly U.S.
Attorney General under
President Reagan
CLASS I INTERESTED DIRECTOR SERVING UNTIL THE YEAR 2005 ANNUAL MEETING OF
STOCKHOLDERS:
Ralph W. Bradshaw Chairman of 1998 President and Director of Director of The
(52)** the Board Cornerstone Advisors, SMALLCap Fund
One West Pack Square and Inc., and of the Funds
Suite 1650 President within the Fund Complex;
Asheville, NC 28801 Financial Consultant;
Vice President, Deep
Discount Advisors, Inc.
(1993-1999).
CLASS III NON-INTERESTED DIRECTORS SERVING UNTIL THE YEAR 2004 ANNUAL MEETING OF
STOCKHOLDERS:
Glenn W. Wilcox, Sr. Director 2000 Chairman of the Board Director of The
(71) and Chief Executive SMALLCap Fund,
One West Pack Square Officer of Wilcox Travel Inc.; Wachovia Corp.;
Suite 1700 Agency. Board Trustee and
Asheville, NC 28801 Chairman of
Appalachian State
University; Board
Trustee and Director,
Mars Hill College;
Director, Champion
Industries, Inc.; and
Chairman, Tower
Associates, Inc. (a real
estate venture).
Directorships held by
Term of Nominee for Director
Position Office Principal Occupation Outside of Fund
Name, Address and Age with Fund Since during past 5 years Complex*
Andrew A. Strauss (49) Director 2000 Attorney and senior Director of The
77 Central Avenue member of Strauss & SMALLCap Fund,
Suite F Associates, P.A., Inc.; Memorial
Asheville, NC 28801 Attorneys, Asheville Mission Hospital
and Hendersonville, Foundation,
NC; previous Deerfield Episcopal
President of White Retirement
Knight Healthcare, Community, and
Inc. and LMV Asheville Symphony.
Leasing, Inc., a
wholly owned
subsidiary of Xerox
Credit Corporation.
--------------------------------------------------------------------------------
* The Fund Complex consists of Progressive Return Fund, Inc, Cornerstone
Strategic Value Fund, Inc. and Cornerstone Total Return Fund, Inc. (f/k/a
EIS Fund, Inc.), all of which were advised by Cornerstone Advisors, Inc.
during the year ended December 31, 2002. Prior to October 31, 2002, the
Fund Complex also included The Cornerstone Strategic Return Fund, Inc.
** Mr. Bradshaw is an "interested person" as defined in the Investment Company
Act of 1940 ("Investment Company Act") because he is a director, officer
and 50% shareholder in Cornerstone Advisors, Inc., the Fund's investment
manager.
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, 2002. The information as to
beneficial ownership is based on statements furnished to the Fund by each
Director.
Aggregate Dollar Range of
Equity Securities in All
Dollar Range of Equity Funds Overseen by
Name Securities in CLM. Directors in Fund Complex.
---- ------------------ --------------------------
Edwin Meese III - -
Andrew A. Strauss $1-$10,000 $10,001-$50,000
Thomas H. Lenagh - -
Glenn W. Wilcox Sr. $1-$10,000 $10,001-$50,000
Scott B. Rogers - -
INTERESTED DIRECTORS:
Ralph W. Bradshaw $10,001-$50,000 $50,001-$100,000
Gary A. Bentz $10,001-$50,000 Over $100,000
EXECUTIVE OFFICERS
In addition to Mr. Bradshaw and Mr. Bentz, the other current officer of CLM is:
TERM OF
NAME, ADDRESS AND POSITION(S) OFFICE PRINCIPAL OCCUPATION DIRECTORSHIPS HELD
AGE WITH FUND SINCE DURING PAST 5 YEARS BY OFFICER
Thomas R. Westle Secretary 2001 Partner of Spitzer & Feldman P.C.,
405 Park Avenue a law firm; Secretary of Funds
New York, NY 10022 within the Complex
Under the federal securities laws, the Fund is required to provide to
stockholders in connection with the Meeting, information regarding compensation
paid to Directors by the Fund as well as by the various other U.S. registered
investment companies advised by the Fund's investment manager during its prior
fiscal year. The following table provides information concerning the
compensation paid during the year ended December 31, 2002, to each Director of
the Fund. This information does not reflect any additional monies received for a
named individual serving in any other capacity to the Fund. Please note that the
Fund has no bonus, profit sharing, pension or retirement plans.
Aggregate Total Compensation From
Director Compensation Fund and Fund Complex*
Name of Director Since From CLM Paid to Director
Ralph W. Bradshaw 1998 - -
Glenn W. Wilcox, Sr. 2000 $9100 $36700
Andrew A. Strauss 2000 $8900 $35900
Edwin Meese III 2001 $8800 $27000
Scott B. Rogers 2000 $8900 $35900
Thomas H. Lenagh 1987 $8300 $25300
Gary A. Bentz 2002 - -
---------------
* For compensation purposes, Fund Complex refers to CLM, Cornerstone Total
Return Fund, Inc., The Cornerstone Strategic Return Fund, Inc. (which
merged into Cornerstone Total Return Fund on October 31, 2002), and
Progressive Return Fund, Inc. all of which were managed by Cornerstone
Advisors, Inc. during the year ended December 31, 2002.
Each Director attended at least seventy-five percent or more of the
seven meetings in 2002 of the Board of Directors (including regularly scheduled
and special meetings) held during the period for which he was a Director.
The Fund has a nominating committee which is comprised of the all of
the Non-interested directors. The Fund has no compensation committee.
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, will be
considered votes cast, and will affect the plurality vote required for
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION
OF MESSRS. GARY A. BENTZ, THOMAS H. LENAGH, AND SCOTT B. ROGERS AS CLASS II
DIRECTORS OF THE FUND.
AUDIT COMMITTEE
The Fund's Audit Committee is currently composed of five
Non-Interested directors, Messrs. Wilcox, Strauss, Meese, Lenagh and Rogers. The
principal functions of the Audit Committee include but are not limited to: (i)
recommendations to the Board for the appointment of the Fund's independent
accountants; (ii) review of the scope and anticipated cost of the independent
accountant's audit; and (iii) consideration of the independent accountant's
reports concerning their conduct of the audit, including any comments or
recommendations the Board of Directors might make in connection thereto. Each
member of the Audit Committee attended at least seventy-five percent (75%) of
the two meetings during the fiscal year ended December 31, 2002.
On June 1, 2000, the Audit Committee, followed by the full Board of
Directors, adopted a written charter setting forth the duties and
responsibilities of the Audit Committee, and such charter was last re-approved
by the Board of Directors on February 21, 2003, respectively.
On February 25, 2002, the Board of Directors and the Audit Committee
determined to replace PricewaterhouseCoopers LLP ("PwC") as the Fund's
independent accountants. This action was affirmed by the Shareholders at the
2002 Annual Meeting. PwC's accountant report for the past two years did not
contain any adverse opinion or any qualification as to uncertainty, audit scope
or accounting principles. Further, the Board's decision to replace PwC was not
due to any disagreement on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
The following table sets forth the aggregate fees billed by PwC and
by Tait, Weller and Baker, ("TWB"), the independent accountants for the Fund's
most recent fiscal year, for professional services rendered for: (i) the audit
of the Fund's annual financial statements and the review of financial statements
included in the Fund's reports to stockholders ("Audit Fees"); (ii) financial
information systems design and implementation services provided to the Fund, its
investment manager and entities that control, are controlled by or under common
control with the Fund's investment manager that provides services to the Fund
("Financial Information Systems Design"); and (iii) all other services provided
to the Fund, its investment manager and entities that control, are controlled by
or under common control with the Fund's investment manager that provides
services to the Fund ("All Other Fees").
AUDIT FEES FINANCIAL INFORMATION SYSTEMS ALL OTHER FEES DESIGN
TWB $11,000 - $4,500
PwC - - $1,925
AUDIT COMMITTEE REPORT
The Audit Committee has met and held discussions with the Fund's
Administrator, Bear Stearns Funds Management Inc., and the Fund's independent
accountants. The independent accountants represented to the Audit Committee that
the Fund's financial statements were prepared in accordance with U.S. generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the financial statements with the Fund's Administrator and its
independent accountants. The Audit Committee also discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61.
The Fund's independent accountants also provided to the Audit
Committee the written disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent accountants' their independence, in
light of the services they were providing.
Based upon the Audit Committee's discussion with the Fund's
Administrator and the independent accountants and the Audit Committee's review
of the representations of the independent accountants to the Audit Committee,
the Audit Committee recommended that the Board of Directors include the audited
financial statements in the Fund's Annual Report for the fiscal year ended
December 31, 2002 filed with the Securities and Exchange Commission.
Respectfully submitted,
Edwin Meese III
Glenn W. Wilcox, Sr.
Andrew A. Strauss
Thomas H. Lenagh
Scott B. Rogers
INFORMATION PERTAINING TO THE FUND'S INVESTMENT MANAGER AND ADMINISTRATOR
The Investment Manager
Cornerstone Advisors, Inc., which has its principal office at One
West Pack Square, Suite 1650, Asheville, North Carolina 28801, has provided
investment management services to the Fund since 2001 and is registered with the
Securities and Exchange Commission ("SEC") under the Investment Advisers Act of
1940, as amended. Cornerstone Advisors is the investment manager to two other
closed-end funds, Cornerstone Total Return Fund, Inc and Progressive Return
Fund, Inc.
Mr. Bradshaw owns fifty percent (50%) of the total outstanding shares
of common stock of Cornerstone Advisors, Inc. and is President and Chairman of
the Board of Directors of the Fund. Mr. Bentz, who is the Vice President and
Treasurer of the Fund, also owns fifty percent (50%) of the total outstanding
shares of common stock of Cornerstone Advisors, Inc. The address of Messrs.
Bradshaw and Bentz is One West Pack Square, Suite 1650, Asheville, NC 28801.
THE ADMINISTRATOR
Bear Stearns Funds Management Inc. (the "Administrator"), whose
address is 383 Madison Avenue, 23rd Floor, New York, NY 10179, currently acts as
the administrator of the Fund.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Section 30(h) of the 1940 Act in combination require the Fund's
directors and officers, persons who own more than 10% of the Fund's common
stock, and the Fund's investment manager and its directors and officers, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange, Inc. The Fund believes that the
Fund's directors and officers, the Fund's investment manager and its directors
and officers have complied with all applicable filing requirements during the
year ended December 31, 2002.
INFORMATION CONCERNING CERTAIN SHAREHOLDERS
The following table shows certain information based on filings made
with the SEC concerning persons who may be deemed beneficial owners of 5% or
more of the shares of common stock of the Fund because they possessed or shared
voting or investment power with respect to the shares of that Fund:
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT %
--------------------------------------------------------------------------------
Deep Discount Advisors, Inc. (1) 749,656 19.7%
One West Pack Square
Suite 777
Asheville, NC 28801
711,808 18.7%
Ron Olin Investment Management Company (1)
One West Pack Square
Suite 777
Asheville, NC 28801
462,680 12.2%
Karpus Management, Inc. (2)
D/b/a Karpus Investment Management
183 Sullys Trail
Pittsford, NY 14534
(1) Based solely upon information presented in a Schedule 13G/A, dated February
6, 2003, filed jointly by Deep Discount Advisors, Inc. and Ron Olin
Investment Management Company.
(2) Based solely upon information presented in a Schedule 13D/A, dated February
7, 2003, filed by Karpus Management, Inc. The Fund does not have any
knowledge of who the ultimate beneficiaries are of the Fund's shares.
Additionally, on February 18, 2003, Cede & Co., a nominee for participants in
the Depository Trust Company, held of record 3,734,918 shares of the Fund, or
approximately 98.1% of the shares outstanding. All the directors and executive
officers of CLM, as of the date of this proxy, owned less than 1% of the
outstanding shares of CLM.
ADDITIONAL INFORMATION
The Proxy Statement/Prospectus does not contain all of the
information set forth in the registration statements and the exhibits relating
thereto which the Funds have filed with the Commission, under the Securities Act
and the Investment Company Act, to which reference is hereby made.
The Funds are subject to the informational requirements of the
Exchange Act and in accordance therewith, file reports and other information
with the SEC. Reports, proxy statements, registration statements and other
information filed by the Funds can be inspected and copied at the public
reference facilities of the SEC in Washington, D.C. Copies of such materials
also can be obtained by mail from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20594, at prescribed rates.
Other Matters to Come Before the Meeting.
The Board of Directors of the Fund is not aware of any matters that
will be presented for action at the Meeting other than the matters set forth
herein. Should any other matters requiring a vote of Stockholders arise, the
proxy in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy the discretionary authority to vote
the shares as to any such other matters in their discretion in the interest of
the Fund.
The Fund's Bylaws currently provide that in order for a stockholder
to nominate a candidate for election as a director at an annual meeting of
stockholders or propose business for consideration at such meeting, notice must
generally be given in writing to the Secretary of the Fund at the principal
executive office of the Fund not later than the close of business on the 90th
day nor earlier than the close of business on the 120th day prior to the first
anniversary of the date of the notice for the preceding year's annual meeting.
Accordingly, a stockholder nomination or proposal intended to be considered at
the 2004 Annual Meeting must be received by the Secretary after the close of
business on November 4, 2003, and prior to the close of business on December 4,
2003. In addition, if you wish to have your proposal considered for inclusion in
the Fund's 2004 Proxy Statement for the Annual Meeting, we must receive it on or
before November 4, 2003.
By order of the Boards of Directors of Cornerstone Strategic Value Fund, Inc.
CORNERSTONE STRATEGIC VALUE FUND, INC.
Thomas R. Westle, Secretary
PROXY CARD FOR THE ANNUAL MEETING OF STOCKHOLDERS
CORNERSTONE STRATEGIC VALUE FUND, INC.
The undersigned stockholder of Cornerstone Strategic Value Fund, Inc.
(the "Fund") hereby constitutes and appoints Messrs. Ralph W. Bradshaw, Andrew
A. Strauss, and Glenn W. Wilcox, 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 represent the undersigned at the meeting and to cast all votes
that the undersigned is entitled to cast at the Annual Meeting of Stockholders
of the Fund to be held on Friday, April 11, 2003 at 12:00 a.m., Eastern time,
One West Pack Square, 5th Floor Conference Room, Asheville, NC 28801, 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 the election of three Class II Directors. If no
such specification is made, the above named proxies will vote FOR proposal 1 and
will vote in their discretion with respect to such other matters as may properly
come before the Annual Meeting of Stockholders or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF CORNERSTONE STRATEGIC VALUE
FUND, INC.'S BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON APRIL 11, 2003
(To be dated and signed on reverse side)
Please mark boxes / / or /X/ in blue or black ink.
1. To elect three (3) Class II Directors: FOR WITHHELD
Gary A. Bentz [ ] [ ]
Thomas H. Lenagh [ ] [ ]
Scott B. Rogers [ ] [ ]
In their discretion, the proxies are authorized to consider and vote upon
such other matters as may properly come before said Meeting or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE STOCKHOLDER.
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, AND DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
SIGNATURE(S)____________________________ DATE___________________
NOTE: Please sign exactly as name appears. When shares are held as joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer and if a
partnership, please sign in full partnership name by authorized person.