<SEC-DOCUMENT>0000909012-11-000211.txt : 20110308
<SEC-HEADER>0000909012-11-000211.hdr.sgml : 20110308
<ACCEPTANCE-DATETIME>20110308131159
ACCESSION NUMBER:		0000909012-11-000211
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20101231
FILED AS OF DATE:		20110308
DATE AS OF CHANGE:		20110308
EFFECTIVENESS DATE:		20110308

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CORNERSTONE TOTAL RETURN FUND INC
		CENTRAL INDEX KEY:			0000033934
		IRS NUMBER:				132727013
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-02363
		FILM NUMBER:		11671289

	BUSINESS ADDRESS:	
		STREET 1:		C/O ULTIMUS FUND SOLUTIONS, LLC
		STREET 2:		350 JERICHO TURNPIKE, SUITE 206
		CITY:			JERICHO
		STATE:			NY
		ZIP:			11753
		BUSINESS PHONE:		(646) 881-4985

	MAIL ADDRESS:	
		STREET 1:		C/O ULTIMUS FUND SOLUTIONS, LLC
		STREET 2:		350 JERICHO TURNPIKE, SUITE 206
		CITY:			JERICHO
		STATE:			NY
		ZIP:			11753

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EIS FUND INC
		DATE OF NAME CHANGE:	20020109

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EXCELSIOR INCOME SHARES INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>t306288.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-02363

                       Cornerstone Total Return Fund, Inc.
--------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

350 Jericho Turnpike, Suite 206     Jericho, New York              11753
--------------------------------------------------------------------------------
      (Address of principal executive offices)                   (Zip code)

                                Frank J. Maresca

           Ultimus Fund Solutions, LLC 350 Jericho Turnpike, Suite 206
                            Jericho, New York 11753
--------------------------------------------------------------------------------
                     (Name and address of agent for service)

Registrant's telephone number, including area code: (513) 326-3597

Date of fiscal year end: December 31, 2010

Date of reporting period: December 31, 2010

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
<PAGE>

ITEM 1. REPORTS TO STOCKHOLDERS.


CONTENTS

Portfolio Summary                                                              1
Summary Schedule of Investments                                                2
Statement of Assets and Liabilities                                            4
Statement of Operations                                                        5
Statement of Changes in Net Assets                                             6
Financial Highlights                                                           7
Notes to Financial Statements                                                  8
Report of Independent Registered Public Accounting Firm                       14
Tax Information                                                               15
Additional Information Regarding the Fund's Directors and Corporate Officers  16
Description of Dividend Reinvestment Plan                                     19
Proxy Voting and Portfolio Holdings Information                               21
Privacy Policy Notice                                                         22
Summary of General Information                                                25
Shareholder Information                                                       25
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

PORTFOLIO SUMMARY - AS OF DECEMBER 31, 2010 (UNAUDITED)

SECTOR ALLOCATION
                                                                      Percent of
Sector                                                                Net Assets
--------------------------------------------------------------------------------
Information Technology                                                      16.4
--------------------------------------------------------------------------------
Financials                                                                  12.5
--------------------------------------------------------------------------------
Energy                                                                      10.8
--------------------------------------------------------------------------------
Consumer Staples                                                             9.6
--------------------------------------------------------------------------------
Healthcare                                                                   9.6
--------------------------------------------------------------------------------
Closed-End Funds                                                             9.4
--------------------------------------------------------------------------------
Industrials                                                                  8.9
--------------------------------------------------------------------------------
Consumer Discretionary                                                       8.8
--------------------------------------------------------------------------------
Materials                                                                    3.2
--------------------------------------------------------------------------------
Telecommunication Services                                                   2.7
--------------------------------------------------------------------------------
Other                                                                        8.1
--------------------------------------------------------------------------------

TOP TEN HOLDINGS, BY ISSUER

                                                                      Percent of
Holding                                  Sector                       Net Assets
--------------------------------------------------------------------------------
1. Exxon Mobil Corporation               Energy                              3.4
--------------------------------------------------------------------------------
2. Microsoft Corporation                 Information Technology              2.6
--------------------------------------------------------------------------------
3. Apple, Inc.                           Information Technology              2.5
--------------------------------------------------------------------------------
4. Adams Express Company (The)           Closed-End Funds                    2.5
--------------------------------------------------------------------------------
5. Google, Inc. - Class A                Information Technology              2.3
--------------------------------------------------------------------------------
6. W al-Mart Stores, Inc.                Consumer Staples                    2.3
--------------------------------------------------------------------------------
7. International Business Machines
   Corporation                           Information Technology              2.3
--------------------------------------------------------------------------------
8. JPMorgan Chase & Company              Financials                          2.0
--------------------------------------------------------------------------------
9. A T&T, Inc.                           Telecommunications Service          1.9
--------------------------------------------------------------------------------
10. Johnson & Johnson                    Healthcare                          1.8
--------------------------------------------------------------------------------


                                                                               1
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

SUMMARY SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010

                                                No. of
Description                                     Shares                    Value
--------------------------------------------------------------------------------
EQUITY SECURITIES - 94.13%
 CLOSED-END FUNDS - 9.41%
 CORE - 3.71%
  Adams Express Company
   (The) (a)                                    59,400              $   636,768
  Other Core (b)                                                        322,600
                                                                    -----------
                                                                        959,368
                                                                    -----------
CORPORATE DEBT FUNDS INVESTMENT
GRADE-RATED - 0.39%
 Other Corporate Debt Funds
  Investment Grade-Rated (b)                                            101,980
                                                                    -----------
DEVELOPED MARKET - 0.12%
 Other Developed Market (b)                                              31,858
                                                                    -----------
GLOBAL INCOME - 0.83%
 Nuveen Multi-Currency
  Short-Term Government
  Income Fund                                   15,656                  215,583
                                                                    -----------
HIGH CURRENT YIELD (LEVERAGED) - 0.25%
 Other High Current Yield
  (Leveraged) (b)                                                        65,870
                                                                    -----------
INCOME & PREFERRED STOCK - 0.34%
 Total Income & Preferred
  Stock (b)                                                              87,988
                                                                    -----------
OPTION ARBITRAGE/OPTIONS
 STRATEGIES - 2.29%
 Eaton Vance Risk-Managed
  Diversified Equity
  Income Fund                                   28,800                  382,464
 NFJ Dividend, Interest &
  Premium Strategy Fund                         12,000                  210,120
                                                                    -----------
                                                                        592,584
                                                                    -----------
REAL ESTATE - 0.12%
 Total Real Estate (b)                                                   30,300
                                                                    -----------
SECTOR EQUITY - 1.10%
 Petroleum & Resource
  Corporaion (a)                                 3,000                   81,030
 Other Sector Equity (b)                                                205,130
                                                                    -----------
                                                                        286,160
                                                                    -----------
U.S. MORTGAGE - 0.26%
 Total U.S. Mortgage (b)                                                 67,689
                                                                    -----------
 TOTAL CLOSED-END FUNDS                                               2,439,380
                                                                    -----------
CONSUMER DISCRETIONARY - 8.75%
 DIRECTV Group, Inc.
  (The) - Class A *                              4,000                  159,720
 Ford Motor Company *                           10,000                  167,900
 Home Depot, Inc. (The)                          5,000                  175,300
 McDonald's Corporation                          2,000                  153,520
 NIKE, Inc. - Class B                            2,500                  213,550
 Time Warner, Inc.                               4,666                  150,105
 Walt Disney Company (The)                       5,000                  187,549
 Other Consumer
  Discretionary (b)                                                   1,059,217
                                                                    -----------
                                                                      2,266,861
                                                                    -----------
CONSUMER STAPLES - 9.55%
 Coca-Cola Company (The)                         5,000                  328,850
 PepsiCo, Inc.                                   4,000                  261,320
 Philip Morris International, Inc.               5,000                  292,650
 Procter & Gamble
  Company (The)                                  6,972                  448,509
 Wal-Mart Stores, Inc.                          11,000                  593,230
 Other Consumer Staples (b)                                             550,132
                                                                    -----------
                                                                      2,474,691
                                                                    -----------
ENERGY - 10.75%
 Apache Corporation                              2,000                  238,460
 Chevron Corporation                             3,500                  319,375
 ConocoPhillips                                  5,000                  340,500
 Exxon Mobil Corporation                        12,000                  877,440
 Occidental Petroleum
  Corporation                                    4,000                  392,400
 Schlumberger Ltd.                               3,000                  250,500
 Other Energy (b)                                                       367,870
                                                                    -----------
                                                                      2,786,545
                                                                    -----------
FINANCIALS - 12.49%
 American Express Company                        4,000                  171,680
 Bank of America Corporation                    16,521                  220,390
 Goldman Sachs Group,
  Inc. (The)                                     2,500                  420,400
 JPMorgan Chase & Company                       12,200                  517,524


See accompanying notes to financial statements.
2
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

SUMMARY SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010 (CONCLUDED)

                                                No. of
Description                                     Shares                    Value
--------------------------------------------------------------------------------
FINANCIALS (CONTINUED)
 Travelers Companies,
  Inc. (The)                                     3,092              $   172,255
 Wells Fargo & Company                          10,000                  309,900
 Other Financials (b)                                                 1,423,920
                                                                    -----------
                                                                      3,236,069
                                                                    -----------
HEALTHCARE - 9.57%
 Abbott Laboratories                             3,000                  143,730
 Amgen, Inc. *                                   3,000                  164,700
 Bristol-Myers Squibb
  Company                                        6,000                  158,880
 Johnson & Johnson                               7,500                  463,875
 McKesson Corporation                            2,500                  175,950
 Medtronic, Inc.                                 4,500                  166,905
 Other Health Care (b)                                                1,204,785
                                                                    -----------
                                                                      2,478,825
                                                                    -----------
INDUSTRIALS - 8.86%
 3M Company                                      2,500                  215,750
 General Electric Company                       24,000                  438,960
 Lockheed Martin Corporation                     2,500                  174,775
 Union Pacific Corporation                       2,500                  231,650
 United Parcel Service, Inc. -
  Class B                                        2,000                  145,160
 Other Industrials (b)                                                1,090,638
                                                                    -----------
                                                                      2,296,933
                                                                    -----------
INFORMATION TECHNOLOGY - 16.43%
 Apple, Inc. *                                   2,000                  645,119
 Google, Inc. - Class A *                        1,000                  593,970
 Hewlett-Packard Company                         8,000                  336,800
 Intel Corporation                              17,000                  357,510
 International Business
  Machines Corporation                           4,000                  587,040
 Microsoft Corporation                          24,000                  670,080
 Oracle Corporation                             12,600                  394,380
 Other Information
  Technology (b)                                                        675,288
                                                                    -----------
                                                                      4,260,187
                                                                    -----------
MATERIALS - 3.18%
 E.I. Du Pont de Nemours
  & Company                                      4,800                  239,424
 Freeport-McMoRan Copper
  & Gold, Inc.                                   2,500                  300,225
 Other Materials (b)                                                    283,205
                                                                        822,854
REAL ESTATE INVESTMENT TRUST - 0.01%
 Total Real Estate
  Investment Trust (b)                                              $     1,592
                                                                    -----------
TELECOMMUNICATION SERVICES - 2.65%
 AT&T, Inc.                                     17,089                  502,075
 Centurytel, Inc.                                4,000                  184,680
                                                                    -----------
                                                                        686,755
                                                                    -----------
UTILITIES - 2.48%
 Other Utilities (b)                                                    643,216
                                                                    -----------
TOTAL EQUITY SECURITIES
 (cost - $23,055,479)                                                24,393,908
                                                                    -----------
SHORT-TERM INVESTMENTS - 8.02%
 MONEY MARKET SECURITY - 8.02%
  JPMorgan U.S. Government
   Money Market Fund
   (cost - $2,077,580)                       2,077,580                2,077,580
                                                                    -----------
TOTAL INVESTMENTS - 102.15%
 (cost - $25,133,059)                                                26,471,488
                                                                    -----------
LIABILITIES IN EXCESS OF
 OTHER ASSETS - (2.15)%                                                (558,268)
                                                                    -----------
NET ASSETS - 100.00%                                                $25,913,220
                                                                    ===========

----------
(a)   Affiliated investment. The Fund holds 2.46% and 0.31% (based on net
      assets) of Adams Express Company and Petroleum & Resources Corporation,
      respectively. A director of the Fund also serves as a director to such
      companies. During the year ended December 31, 2010 there were purchases
      totaling 3,000 shares of Petroleum & Resources Corporation with a cost of
      $63,070. There were no purchases or sales of Adams Express Company during
      the year.
(b)   Represents issuers not identified as a top 50 holding in terms of market
      value and issues or issuers not exceeding 1% of net assets individually or
      in the aggregate, respectively, as December 31, 2010.
*     Non-income producing security.


                                 See accompanying notes to financial statements.
                                                                               3
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 2010

<TABLE>
<S>                                                                       <C>
ASSETS
Investments, at value:
  Unaffiliated issuers (cost - $24,377,299)                               $ 25,753,690
  Affiliated issuers (cost - $755,760)                                         717,798
                                                                          ------------
  Total investments (cost - $25,133,059)                                    26,471,488
Receivables:
  Dividends                                                                     29,555
  Prepaid expenses                                                               1,013
                                                                          ------------
  Total Assets                                                              26,502,056
                                                                          ------------
LIABILITIES
Payables:
  Securities purchased                                                         472,926
  Investment management fees                                                    23,577
  Directors' fees                                                               13,500
  Administration fees                                                            2,500
  Other accrued expenses                                                        76,333
                                                                          ------------
Total Liabilities                                                              588,836
                                                                          ------------
NET ASSETS (applicable to 3,896,958 shares of common stock outstanding)   $ 25,913,220
                                                                          ============
NET ASSET VALUE PER SHARE ($25,913,220 / 3,896,958)                       $       6.65
                                                                          ============
NET ASSETS CONSISTS OF
Common stock, $0.01 par value; 3,896,958 shares issued and outstanding
  (15,000,000 shares authorized)                                          $      3,897
Paid-in capital                                                             28,569,711
Accumulated net realized loss on investments                                (3,998,817)
Net unrealized appreciation in value of investments                          1,338,429
                                                                          ------------
Net assets applicable to shares outstanding                               $ 25,913,220
                                                                          ============
</TABLE>


See accompanying notes to financial statements.
4
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2010

<TABLE>
<S>                                                                         <C>
INVESTMENT INCOME
Income:
  Dividends from non-affiliated investments                                 $   425,679
  Dividends from affiliated investments                                           9,774
  Securities lending                                                                290
                                                                            -----------
  Total Investment Income                                                       435,743
                                                                            -----------
Expenses:
  Investment management fees                                                    190,388
  Directors' fees                                                                56,865
  Legal and audit fees                                                           55,764
  Accounting fees                                                                37,432
  Printing                                                                       37,000
  Administration fees                                                            29,818
  Transfer agent fees                                                            24,262
  Custodian fees                                                                  6,872
  Insurance                                                                       5,665
  Stock exchange listing fees                                                     3,974
  Miscellaneous                                                                   2,700
                                                                            -----------
  Total Expenses                                                                450,740
  Less: Fees paid indirectly                                                     (6,872)
                                                                            -----------
    Net Expenses                                                                443,868
                                                                            -----------
  Net Investment Loss                                                            (8,125)
                                                                            -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized loss from unaffilated investments                                 (114,358)
Capital gain distributions from regulated investment companies                   15,989
Capital gain distributions from affiliated regulated investment companies        23,430
Net change in unrealized depreciation in value of investments                 2,089,762
                                                                            -----------
Net realized and unrealized gain on investments                               2,014,823
                                                                            -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                        $ 2,006,698
                                                                            ===========
</TABLE>


                                 See accompanying notes to financial statements.
                                                                               5
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                                                    For the Years Ended December 31,
                                                                    --------------------------------
                                                                          2010            2009
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
INCREASE/(DECREASE) IN NET ASSETS
Operations:
  Net investment loss                                                 $     (8,125)   $    (46,373)
  Net realized loss from investments                                       (74,939)        (12,396)
  Net change in unrealized depreciation in value of investments          2,089,762       3,681,512
                                                                      ------------    ------------
    Net increase in net assets resulting from operations                 2,006,698       3,622,743
                                                                      ------------    ------------
Dividends and distributions to shareholders:
  Net investment income                                                         --              --
  Return-of-capital                                                     (4,164,904)     (5,317,678)
                                                                      ------------    ------------
    Total dividends and distributions to shareholders                   (4,164,904)     (5,317,678)
                                                                      ------------    ------------
Common stock transactions:
  Proceeds from rights offerings of 1,006,384 and 0 shares of newly
    issued common stock, respectively                                    7,275,425              --
  Offering expenses associated with the rights offering                    (79,196)             --
  Proceeds from 52,016 and 64,854 shares newly issued in
    reinvestment of dividends and distributions, respectively              475,258         590,254
                                                                      ------------    ------------
  Net increase in net assets from captial stock transactions             7,671,487         590,254
                                                                      ------------    ------------
    Total increase/(decrease) in net assets                              5,513,281      (1,104,681)
                                                                      ------------    ------------
NET ASSETS
Beginning of year                                                       20,399,939      21,504,620
                                                                      ------------    ------------
End of year                                                           $ 25,913,220    $ 20,399,939
                                                                      ============    ============
</TABLE>


See accompanying notes to financial statements.
6
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each year indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.

<TABLE>
<CAPTION>
                                                                          For the Years Ended December 31,*
                                                         ----------------------------------------------------------------------
                                                            2010           2009           2008           2007           2006
                                                         ----------     ----------     ----------     ----------     ----------
<S>                                                      <C>            <C>            <C>            <C>            <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of year                       $     7.19     $     7.75     $    17.00     $    20.28     $    21.82
                                                         ----------     ----------     ----------     ----------     ----------
Net investment income/(loss) #                                (0.00)         (0.02)          0.12           0.14           0.18
Net realized and unrealized gain/(loss) on investments         0.68           1.31          (5.64)          0.64           2.50
                                                         ----------     ----------     ----------     ----------     ----------
Net increase/(decrease) in net assets resulting
  from operations                                              0.68           1.29          (5.52)          0.78           2.68
                                                         ----------     ----------     ----------     ----------     ----------
Dividends and distributions to shareholders:
  Net investment income                                          --             --          (0.12)         (0.14)         (0.18)
  Net realized capital gains                                     --             --             --          (0.06)            --
  Return-of-capital                                           (1.46)         (1.90)         (3.77)         (4.08)         (4.04)
                                                         ----------     ----------     ----------     ----------     ----------
  Total dividends and distributions to shareholders           (1.46)         (1.90)         (3.89)         (4.28)         (4.22)
                                                         ----------     ----------     ----------     ----------     ----------
Common stock transactions:
  Anti-dilutive effect due to shares issued:
    Rights offering                                            0.19             --             --             --             --
    Reinvestment of dividends and distributions                0.05           0.05           0.16           0.22             --
                                                         ----------     ----------     ----------     ----------     ----------
  Total anti-dilutive effect due to shares issued              0.24           0.05           0.16           0.22           0.00
                                                         ----------     ----------     ----------     ----------     ----------
Net asset value, end of year                             $     6.65     $     7.19     $     7.75     $    17.00     $    20.28
                                                         ==========     ==========     ==========     ==========     ==========
Market value, end of year                                $     7.88     $    10.29     $     7.60     $    19.60     $    39.24
                                                         ==========     ==========     ==========     ==========     ==========
Total investment return (a)                                  (10.28)%        66.98%        (49.30)%       (40.97)%        64.15%
                                                         ==========     ==========     ==========     ==========     ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000 omitted)                    $   25,913     $   20,400     $   21,505     $   45,411     $   52,379
Ratio of expenses to average net assets,
  net of fee waivers, if any (b)(c)                            2.33%          2.76%          1.67%          1.49%          1.44%
Ratio of expenses to average net assets,
  excluding fee waivers, if any (c)(d)                         2.37%          3.20%          1.94%          1.53%          1.50%
Ratio of expenses to average net assets,
  net of fee waivers, if any (c)(d)                            2.37%          2.88%          1.77%          1.52%          1.50%
Ratio of net investment income/(loss) to
  average net assets                                          (0.04)%        (0.24)%         0.98%          0.74%          0.82%
Portfolio turnover rate                                       34.39%         13.24%         15.61%         11.00%         11.29%
</TABLE>

----------
*     Effective December 23, 2008, a reverse stock split of 1:2 occurred. All
      per share amounts have been restated according to the terms of the split
#     Based on average shares outstanding.
(a)   Total investment return at market value is based on the changes in market
      price of a share during the period and assumes reinvestment of dividends
      and distributions, if any, at actual prices pursuant to the Fund's
      dividend reinvestment plan. Total investment return does not reflect
      brokerage commissions.
(b)   Expenses are net of fees paid indirectly.
(c)   Expenses do not include expenses of investments companies in which the
      Fund invests.
(d)   Expenses exclude the reduction for fees paid indirectly.


                                 See accompanying notes to financial statements.
                                                                               7
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE A. ORGANIZATION

Cornerstone Total Return Fund, Inc. (the "Fund") was incorporated in New York on
March 16, 1973 and commenced investment operations on May 15, 1973. Its
investment objective is to seek capital appreciation with current income as a
secondary objective. The Fund is registered under the Investment Company Act of
1940, as amended, as a closed-end, diversified management investment company.

NOTE B. SIGNIFICANT ACCOUNTING POLICIES

MANAGEMENT ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make certain estimates and assumptions that may
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.

SUBSEQUENT EVENTS: The Fund has evaluated the need for additional disclosures
and/or adjustments resulting from subsequent events through the date its
financial statements were issued. Based on this evaluation, no additional
disclosures or adjustments were required to such financial statements.

PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. Readily marketable portfolio securities listed on the NYSE
are valued, except as indicated below, at the last sale price reflected on the
consolidated tape at the close of the NYSE on the business day as of which such
value is being determined. If there has been no sale on such day, the securities
are valued at the mean of the closing bid and asked prices on such day. If no
bid or asked prices are quoted on such day or if market prices may be unreliable
because of events occurring after the close of trading, then the security is
valued by such method as the Board of Directors shall determine in good faith to
reflect its fair market value. Readily marketable securities not listed on the
NYSE but listed on other domestic or foreign securities exchanges are valued in
a like manner. Portfolio securities traded on more than one securities exchange
are valued at the last sale price on the business day as of which such value is
being determined as reflected on the consolidated tape at the close of the
exchange representing the principal market for such securities. Securities
trading on the Nasdaq Stock Market, Inc. ("NASDAQ") are valued at the closing
price.

Readily marketable securities traded in the over-the counter market, including
listed securities whose primary market is believed by Cornerstone Advisors, Inc.
(the "Investment Manager" or "Cornerstone") to be over-the-counter, are valued
at the mean of the current bid and asked prices as reported by the NASDAQ or, in
the case of securities not reported by the NASDAQ or a comparable source, as the
Board of Directors deem appropriate to reflect their fair market value. Where
securities are traded on more than one exchange and also over-the-counter, the
securities will generally be valued using the quotations the Board of Directors
believes reflect most closely the value of such securities.

At December 31, 2010 the Fund held no securities valued in good faith by the
Board of Directors. The net asset value per share of the Fund is calculated
weekly and on the last business day of the month with the exception of those
days on which the NYSE Amex LLC is closed.

The Fund is exposed to financial market risks, including the valuations of its
investment portfolio. For the year ended December 31, 2010, the Fund did not
engage in derivative instruments and other hedging activities.

REPURCHASE AGREEMENTS: The Fund has agreed to purchase securities from financial
institutions subject to the seller's agreement to repurchase them at an
agreed-upon time and price ("repurchase agreements"). The financial institutions
with whom the Fund enters into repurchase agreements are banks and
broker/dealers, which Cornerstone considers creditworthy. The seller under a
repurchase agreement will be required to maintain the value of the securities as
collateral, subject to the agreement at not less than the repurchase price


8
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC. NOTES TO

FINANCIAL STATEMENTS (CONTINUED)

plus accrued interest. Cornerstone monitors the mark-to-market of the value of
the collateral, and, if necessary, requires the seller to maintain additional
securities, so that the value of the collateral is not less than the repurchase
price. Default by or bankruptcy of the seller would, however, expose the Fund to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying securities.

INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.

RISKS ASSOCIATED WITH INVESTMENTS IN OTHER CLOSED-END FUNDS: Closed-end
investment companies are subject to the risks of investing in the underlying
securities. The Fund, as a holder of the securities of the closed-end investment
company, will bear its pro rata portion of the closed-end investment company's
expenses, including advisory fees. These expenses are in addition to the direct
expenses of the Fund's own operations.

SUBSEQUENT EVENTS: On February 11, 2011, the board approved the elimination of
the Fund's non-fundamental investment restriction regarding investments in the
securities of other investment companies. Accordingly, effective immediately,
the Fund may invest without limitation in ETFs and other closed-end investment
companies, provided that the Fund limits its investment in securities issued by
other investment companies so that not more than 3% of the outstanding voting
stock of any one investment company will be owned by the Fund.

TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.

The Accounting for Uncertainty in Income Taxes Topic of the FASB Accounting
Standards Codification defines the threshold for recognizing the benefits of
tax-return positions in the financial statements as "more-likely-than-not" to be
sustained by the taxing authority and requires measurement of a tax position
meeting the more-likely-than-not criterion, based on the largest benefit that is
more than 50 percent likely to be realized. The Fund's policy is to classify
interest and penalties associated with underpayment of federal and state income
taxes, if any, as income tax expense on its Statement of Operations. As of
December 31, 2010, the Fund does not have any interest or penalties associated
with the under-payment of any income taxes. Management reviewed any uncertain
tax positions for open tax years 2007 through 2009; or expected to be taken in
the Fund's 2010 tax return. There was no material impact to the financial
statements or, other than as described below, the disclosures thereto as a
result of the adoption of this pronouncement. The Fund and the Investment
Manager have entered into a closing letter with the Internal Revenue Service's
New York Regional Office regarding a technical tax issue relating to whether the
Fund's historic dividend reinvestment plan may have resulted in a violation of
certain Subchapter M requirements of the Internal Revenue Code for certain prior
tax years. The closing letter avoids any potential material negative tax impact
to the Fund. Pursuant to the closing letter, the Investment Manager paid any
settlement amount owed to the Internal Revenue Service.

DISTRIBUTIONS TO SHAREHOLDERS: Effective January 2002, the Fund initiated a
fixed, monthly distribution to shareholders. On November 29, 2006, this
distribution policy was updated to provide for the 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 distribution policy will be
reviewed and approved at least annually by the Fund's Board of Directors and can
be modified at their discretion. To the extent that these distributions exceed
the current earnings of the Fund, the balance


                                                                               9
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC. NOTES TO

FINANCIAL STATEMENTS (CONTINUED)

will be generated from sales of portfolio securities held by the Fund, which
will either be 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. The Fund plans to maintain this
distribution policy even if regulatory requirements would make part of a
return-of-capital, necessary to maintain the distribution, taxable to
shareholders 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 this distribution policy at any time and such termination may have an
adverse effect on the market price for the Fund's common shares. The Fund
determines annually whether to distribute any net realized long-term capital
gains in excess of net realized short-term capital losses, including capital
loss carryovers, if any. To the extent that the Fund's taxable income in any
calendar year exceeds the aggregate amount distributed pursuant to this
distribution policy, an additional distribution may be made to avoid the payment
of a 4% U.S. federal excise tax, and to the extent that the aggregate amount
distributed in any calendar year exceeds the Fund's taxable income, the amount
of that excess may constitute a return-of-capital for tax purposes. A
return-of-capital distribution reduces the cost basis of an investor's shares in
the Fund. Dividends and distributions to shareholders are recorded by the Fund
on the ex-dividend date.

MANAGED DISTRIBUTION RISK: Under the managed distribution policy, the Fund makes
monthly distributions to shareholders at a rate that may include periodic
distributions of its net income and net capital gains, ("Net Earnings"), or from
return-of-capital. If, for any fiscal year where total cash distributions
exceeded Net Earnings (the "Excess"), the Excess would decrease the Fund's total
assets and, as a result, would have the likely effect of increasing the Fund's
expense ratio. There is a risk that the total Net Earnings from the Fund's
portfolio would not be great enough to offset the amount of cash distributions
paid to Fund shareholders. If this were to be the case, the Fund's assets would
be depleted, 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 have
to sell a portion of its investment portfolio at a time when independent
investment judgment might not dictate such action. Furthermore, such assets used
to make distributions will not be available for investment pursuant to the
Fund's investment objective.

NOTE C. FAIR VALUE

As required by the Fair Value Measurement and Disclosures Topic of the FASB
Accounting Standards Codification, the Fund has performed an analysis of all
assets and liabilities measured at fair value to determine the significance and
character of all inputs to their fair value determination. The fair value
hierarchy prioritizes the inputs to valuation techniques used to measure fair
value into the following three broad categories.

      o     Level 1 - quoted unadjusted prices for instruments in active markets
            to which the Fund has access at the date of measurement.

      o     Level 2 - quoted prices for similar instruments in active markets;
            quoted prices for identical or similar instruments in markets that
            are not active; and model-derived valuations in which all
            significant inputs and significant value drivers are observable in
            active markets. Level 2 inputs are those in markets for which there
            are few transactions,


10
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC. NOTES TO

FINANCIAL STATEMENTS (CONTINUED)

the prices are not current, little public information exists or instances where
prices vary substantially over time or among brokered market makers.

      o     Level 3 - model derived valuations in which or more significant
            inputs or significant value drivers are unobservable. Unobservable
            inputs are those inputs that reflect the Fund's own assumptions that
            market participants would use to price the asset or liability based
            on the best available information.

The following is a summary of the inputs used as of December 31, 2010 in valuing
the Fund's investments carried at value:

                                    Investments in               Other Financial
Valuation Inputs                      Securities                   Instruments*
--------------------------------------------------------------------------------
Level 1 - Quoted Prices
 Equity Investments                    $24,393,908                            --
 Short-Term Investments                  2,077,580                            --
Level 2 - Other Significant
 Observable Inputs                              --                            --
Level 3 - Significant
 Unobservable Inputs                            --                            --
                                       -----------                   -----------
Total                                  $26,471,488                            --
                                       ===========                   ===========

----------
*     Other financial instruments include futures, and swap contracts.

The breakdown of the Fund's investments into major categories is disclosed in
its Summary Schedule of Investments.

During the year ended December 31, 2010 the Fund did not have any significant
transfers in and out of Level 1 or Level 2.

The Fund did not have any assets or liabilities that were measured at fair value
on a recurring basis using significant unobservable inputs (Level 3) at December
31, 2010.

In January 2010, the FASB Accounting Standards Board issued Accounting Standards
Update ("ASU") No. 2010-06 "Improving Disclosures about Fair Value
Measurements". ASU 2010-06 amends FASB Accounting Standards Codification Topic,
Fair Value Measurements and Disclosures, to require additional disclosures
regarding fair value measurements. Certain disclosures required by ASU No.
2010-06 are effective for interim and annual reporting periods beginning after
December 15, 2009, and other required disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years. Management has evaluated the impact ASU No. 2010-06 and has determined
that it will not have a significant impact on its financial statement
disclosures.

NOTE D. AGREEMENTS

Certain officers of the Fund are also officers of Cornerstone or Ultimus Fund
Solutions, LLC ("Ultimus"). Such officers are paid no fees by the Fund for
serving as officers of the Fund.

Included in the Statement of Operations, under the caption Fees paid indirectly,
are expense offsets of $6,872 arising from credits earned on portfolio
transactions executed with brokers, pursuant to directed brokerage arrangements.

INVESTMENT MANAGEMENT AGREEMENT

Cornerstone serves as the Fund's Investment Manager with respect to all
investments. As compensation for its investment management services, Cornerstone
receives from the Fund, an annual fee, calculated weekly and paid monthly, equal
to 1.00% of the Fund's average weekly net assets. For the year ended December
31, 2010, Cornerstone earned $190,388 for investment management services.

ADMINISTRATION AGREEMENT

Under the terms of the Administration Agreement, Ultimus supplies executive,
administrative and regulatory services for the Fund. Ultimus supervises the
preparation of reports to stockholders for the Fund, reports to and filings with
the Securities and Exchange Commission and materials for meetings of the Board
of Directors. For these services, the


                                                                              11
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Fund pays Ultimus a monthly fee at an annual rate of 0.100% of its average daily
net assets up to $250 million and 0.075% of such assets in excess of $250
million, subject to an annual minimum fee of $50,000. Ultimus has agreed to
discount the annual minimum fee to $30,000 and such discount will remain in
place until amended fee is agreed upon.

FUND ACCOUNTING AGREEMENT

Under the terms of the Fund Accounting Agreement, Ultimus calculates the net
asset value per share and maintains the financial books and records of the Fund.
For the performance of these services, the Fund pays Ultimus a base fee of
$2,500 per month plus an asset based fee of 0.010% of the first $500 million of
average daily net assets and 0.005% of such assets in excess of $500 million.

NOTE E. AFFILIATED INVESTMENTS

Transactions in affiliates for the year ended December 31, 2010 were as follows:

                                             Adams        Petroleum &
                                            Express        Resources
                                            Company       Corporation
                                           --------       -----------

Market value at beginning of year          $599,940         $     --
                                           ========         ========
Shares at beginning of year                  59,400               --
Shares purchased during the year                 --            3,000
Shares sold during the year                      --               --
                                           --------         --------
Shares at end of year                        59,400            3,000
                                           ========         ========
Dividend income earned during the year     $  9,504         $    270
                                           ========         ========
Cost of purchases during the year                --         $ 63,070
Proceeds from sales during the year              --               --
Net realized gain/(loss) during the year         --               --
Capital gain distribution                  $ 20,790         $  2,640
Market value at end of year                $636,768         $ 81,030

NOTE F. INVESTMENT IN SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other
than short-term investments, were $8,607,725 and $6,560,392 respectively.

NOTE G. SHARES OF COMMON STOCK

The Fund has 15,000,000 shares of common stock authorized and 3,896,958 shares
outstanding at December 31, 2010. Transactions in common stock for the year
ended December 31, 2010 were as follows:

Shares at beginning of year                  2,838,558
Shares newly issued from rights offering     1,006,384
Shares newly issued in reinvestment
  of dividends and distributions                52,016
                                             ---------
Shares at end of year                        3,896,958
                                             =========

NOTE H. SHARE REPURCHASE PROGRAM

As has been done in the past to enhance shareholder value, pursuant to Section
23 of the Investment Company Act of 1940, as amended, the Fund may again in the
future purchase shares of its common stock on the open market from time to time,
at such times, and in such amounts as may be deemed advantageous to the Fund.
Nothing herein shall be considered a commitment to purchase such shares. The
Fund had no repurchases during the year ended December 31, 2010. No limit has
been placed on the number of shares to be repurchased by the Fund other than
those imposed by federal securities laws.

To the extent such purchases are made they will be in accordance with federal
securities laws, with shares repurchased held in treasury for future use by the
Fund.

NOTE I. SECURITIES LENDING

To generate additional income, the Fund may lend up to 331/3% of its total
assets. The Fund receives payments from borrowers equivalent to the dividends
and interest that would have been earned on securities lent while simultaneously
seeking to earn interest on the investment of cash collateral.


12
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

Loans are subject to termination by the Fund or the borrower at any time, and
are, therefore, not considered to be illiquid investments. Loans of securities
are required at all times to be secured by collateral equal to at least 100% of
the market value of securities on loan. However, in the event of default or
bankruptcy of the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings. In the event that the
borrower fails to return securities, and collateral maintained by the lender is
insufficient to cover the value of loaned securities, the borrower is obligated
to pay the amount of the shortfall (and interest, thereon) to the Fund. However,
there can be no assurance the Fund can recover this amount.

The Fund had no securities on loan to brokers at December 31, 2010. During the
year ended December 31, 2010, the Fund earned $290 in securities lending income
which is included under the caption Securities lending in the Statement of
Operations.

NOTE J. FEDERAL INCOME TAXES

Income and capital gains distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of losses deferred due to wash sales and
Post-October losses (as later defined), and excise tax regulations.

The tax character of dividends and distributions paid to stockholders during the
years ended December 31, for the Fund were as follows:

                   Ordinary Income          Return-of-Capital
                   ---------------          -----------------
                  2010         2009         2010         2009
                  ----         ----         ----         ----
                   --           --       $4,164,904   $5,317,678

At December 31, 2010 the components of accumulated deficit on a tax basis, for
the Fund were as follows:

Capital loss carryforward             $ (3,980,615)
Net unrealized appreciation              1,320,227
                                      ------------
Total accumulated deficit             $ (2,660,388)
                                      ============

Accounting principles generally accepted in the United States of America require
that certain components of net assets relating to permanent differences be
reclassified between financial and tax reporting. These reclassifications have
no effect on net assets or net asset value per share. For the year ended
December 31, 2010, the Fund decreased net investment loss by $8,125 and
decreased paid-in capital by $8,125. Under current tax law, certain capital
losses realized after October 31 within a taxable year may be deferred and
treated as occurring on the first day of the following tax year ("Post-October
losses"). The Fund incurred no such loss.

At December 31, 2010, the Fund had a capital loss carryforward for U.S. federal
income tax purposes of $3,980,615, of which $425,706 expires in 2011, $358,321
expires in 2012, $420,772 expires in 2013, $57,090 expires in 2014, $2,382,884
expires in 2016, $260,903 expires in 2017 and $74,939 expires in 2018.

At December 31, 2010, the identified cost for federal income tax purposes, as
well as the gross unrealized appreciation from investments for those securities
having an excess of value over cost, gross unrealized depreciation from
investments for those securities having an excess of cost over value and the net
unrealized appreciation from investments were $25,151,261, $2,779,762,
$(1,459,535), and $1,320,227, respectively.

NOTE K. SUBSEQUENT EVENTS

On February 11, 2011, the Board of Directors approved U.S. Bank, N.A. to replace
JPMorgan Chase Bank, N.A. as Custodian.


                                                                              13
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors
Cornerstone Total Return Fund, Inc.
Jericho, New York

We have audited the accompanying statement of assets and liabilities of
Cornerstone Total Return Fund, Inc., including the summary schedule of
investments as of December 31, 2010, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2010, by correspondence with the custodian
and brokers. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Cornerstone Total Return Fund, Inc. as of December 31, 2010, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

Tait, Weller & Baker LLP

Philadelphia, Pennsylvania
February 28, 2011


14
<PAGE>

2010 TAX INFORMATION (UNAUDITED)

Cornerstone Total Return Fund, Inc. (the "Fund") is required by Subchapter M of
the Internal Revenue Code of 1986, as amended, to advise its stockholders within
60 days of the Fund's year end (December 31, 2010) as to the federal tax status
of the distributions received by the Fund's stockholders in respect of such
fiscal year. The $4,164,904 in distributions paid to shareholders in respect of
such year, represented a total return-of-capital.

As indicated in this notice, the entire amount of the Fund's distributions for
2010 were comprised of a return-of-capital; accordingly these distributions do
not represent yield or investment return on the Fund's portfolio.

                     SOURCES OF DIVIDENDS AND DISTRIBUTIONS
                               (Per Share Amounts)

Payment Dates:        1/29/10   2/26/10   3/31/10   4/30/10   5/28/10   6/30/10

Return-of-Capital(1)  $0.1213   $0.1213   $0.1213   $0.1213   $0.1213   $0.1213

Payment Dates:        7/30/10   8/31/10   9/30/10   10/29/10  11/30/10  12/31/10

Return-of-Capital(1)  $0.1213   $0.1213   $0.1213   $0.1213   $0.1213   $0.1213

----------
(1)   Return-of-capital - This is the per share amount of return-of-capital, or
      sometimes called nontaxable, distributions reported in Box 3 - under the
      title "Nondividend distributions" - on Form 1099-DIV. This amount should
      not be reported as taxable income on your current return. Rather, it
      should be treated as a reduction in the original cost basis of your
      investment in the Fund. Shareholders are strongly advised to consult their
      own tax advisers with respect to the tax consequences of their investment
      in the Fund.


                                                                              15
<PAGE>

ADDITIONAL INFORMATION REGARDING THE FUND'S DIRECTORS AND CORPORATE OFFICERS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                  Number of
                                                                                                  Portfolios in
Name and                                                                             Position     Fund Complex
Address*                Position(s)       Principal Occupation                       with Fund    Overseen by
(Birth Date)            Held with Fund    over Last 5 Years                          Since        Directors
---------------------------------------------------------------------------------------------------------------
<S>                     <C>               <C>                                        <C>          <C>
Ralph W.                Chairman of       President, Cornerstone Advisors, Inc.;     2001         3
Bradshaw**              the Board of      Financial Consultant; President and
(Dec. 1950)             Directors and     Director of Cornerstone Strategic Value
                        President         Fund, Inc.; President and Trustee of
                                          Cornerstone Progressive Return Fund.

Thomas H.               Director; Audit,  Independent Financial Advisor; Director    2002         3
Lenagh                  Nominating        of Photonics Products Group; Director
(Nov. 1924)             and Corporate     of Cornerstone Strategic Value Fund,
                        Governance        Inc.; Trustee of Cornerstone Progressive
                        Committee         Return Fund; Director of Adams Express
                        Member            Company, Petroleum & Resources
                                          Corporation and PPGI Industries.

Edwin Meese III         Director; Audit,  Distinguished Fellow, The Heritage         2001         3
(Dec. 1931)             Nominating        Foundation Washington D.C.;
                        and Corporate     Distinguished Visiting Fellow at the
                        Governance        Hoover Institution, Stanford University;
                        Committee         Senior Adviser, Revelation L.P.; Director
                        Member            of Cornerstone Strategic Value Fund,
                                          Inc.; Trustee of Cornerstone Progressive
                                          Return Fund.

Scott B. Rogers         Director; Audit,  Chairman, Board of Health Partners,        2001         3
(July 1955)             Nominating        Inc.; Chief Executive Officer, Asheville
                        and Corporate     Buncombe Community Christian
                        Governance        Ministry; and President, ABCCM
                        Committee         Doctor's Medical Clinic; Appointee, NC
                        Member            Governor's Commission on Welfare to
                                          Work; Director of Cornerstone Strategic
                                          Value Fund, Inc.; Trustee of Cornerstone
                                          Progressive Return Fund.
</TABLE>


16
<PAGE>

ADDITIONAL INFORMATION REGARDING THE FUND'S DIRECTORS AND CORPORATE OFFICERS
(UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                  Number of
                                                                                                  Portfolios in
Name and                                                                            Position      Fund Complex
Address*              Position(s)          Principal Occupation                     with Fund     Overseen by
(Birth Date)          Held with Fund       over Last 5 Years                        Since         Directors
---------------------------------------------------------------------------------------------------------------
<S>                     <C>               <C>                                       <C>           <C>
Andrew A.             Director;            Attorney and senior member of Strauss    2001          3
Strauss               Chairman of          & Associates; Director of Cornerstone
(Nov. 1953)           Nominating           Strategic Value Fund, Inc.; Trustee of
                      and Corporate        Cornerstone Progressive Return Fund.
                      Governance
                      Committee and
                      Audit Committee
                      Member

Glenn W.              Director;            Chairman of the Board, Tower             2001          3
Wilcox, Sr.           Chairman of          Associates, Inc.; Chairman of the
(Dec. 1931)           Audit Committee,     Board and Chief Executive Officer of
                      Nominating           Wilcox Travel Agency, Inc.; Director of
                      and Corporate        Cornerstone Strategic Value Fund, Inc.;
                      Governance           Trustee of Cornerstone Progressive
                      Committee            Return Fund.
                      Member
</TABLE>

ADDITIONAL INFORMATION REGARDING THE FUND'S DIRECTORS AND CORPORATE OFFICERS
(UNAUDITED) (CONCLUDED)

<TABLE>
<CAPTION>
Name and                                                                                            Position
Address*                    Position(s)             Principal Occupation                            with Fund
(Birth Date)                Held with Fund          over Last 5 Years                               Since
---------------------------------------------------------------------------------------------------------------
<S>                         <C>                     <C>                                             <C>
Gary A. Bentz               Chief Compliance        Chairman and Chief Financial Officer            2004, 2008,
(June 1956)                 Officer, Secretary,     of Cornerstone Advisors, Inc.; Financial        2009
                            and Assistant           Consultant, C.P.A., Chief Compliance Officer,
                            Treasurer               Secretary, and Assistant Treasurer of
                                                    Cornerstone Strategic Value Fund, Inc. and
                                                    Cornerstone Progressive Return Fund.

Frank J. Maresca            Treasurer               Executive Vice President of Ultimus Fund        2009
(Oct. 1958)                                         Solutions, LLC (since March 2009); previous
                                                    Executive Director, JP Morgan Chase & Co.
                                                    (since June 2008); previous President of Bear
                                                    Stearns Funds Management, Inc.; previous
                                                    Senior Managing Director of Bear Stearns &
                                                    Co., Inc.; Treasurer of Cornerstone Strategic
                                                    Value Fund, Inc. and Cornerstone Progressive
                                                    Return Fund (since May 2009).
</TABLE>

----------
*     The mailing address of each Director and/or Officer with respect to the
      Fund's operation is 350 Jericho Turnpike, Suite 206, Jericho, NY 11753.
**    Designates a director who is an "interested person" of the Fund as defined
      by the Investment Company Act of 1940, as amended. Mr. Bradshaw is an
      interested person of the Fund by virtue of his current position with the
      Investment Adviser of the Fund.


18
<PAGE>

DESCRIPTION OF DIVIDEND REINVESTMENT PLAN (UNAUDITED)

Cornerstone Total Return Fund, Inc. (the "Fund") operates a Dividend
Reinvestment Plan (the "Plan"), sponsored and administered by American Stock
Transfer & Trust Company (the "Agent"), pursuant to which the Fund's income
dividends or capital gains or other distributions (each, a "Distribution" and
collectively, "Distributions"), net of any applicable U.S. withholding tax, are
reinvested in shares of the Fund.

Shareholders automatically participate in the Fund's Plan, unless and until an
election is made to withdraw from the Plan on behalf of such participating
shareholder. Shareholders who do not wish to have Distributions automatically
reinvested should so notify their broker, or if a registered shareholder, the
Agent in writing at P.O. Box 922, Wall Street Station, New York, New York
10269-0560. Such written notice must be received by the Agent prior to the
record date of the Distribution or the shareholder will receive such
Distribution in shares through the Plan. Under the Plan, the Fund's
Distributions to shareholders are reinvested in full and fractional shares as
described below.

When the Fund declares a Distribution the Agent, on the shareholder's behalf,
will (i) receive additional authorized shares from the Fund either newly issued
or repurchased from shareholders by the Fund and held as treasury stock ("Newly
Issued Shares") or (ii) purchase outstanding shares on the open market, on the
NYSE Amex LLC or elsewhere, with cash allocated to it by the Fund ("Open Market
Purchases").

The method for determining the number of shares to be received when
Distributions are reinvested will vary depending upon whether the net asset
value of the Fund's shares is higher or lower than its market price. If the net
asset value of the Fund's shares is lower than its market price, the number of
Newly Issued Shares received will be determined by dividing the amount of the
Distribution either by the Fund's net asset value per share or by 95% of its
market price, whichever is higher. If the net asset value of the Fund's shares
is higher than its market price, shares acquired by the Agent in Open Market
Purchases will be allocated to the reinvesting shareholders based on the average
cost of such Open Market Purchases.

Whenever the Fund declares a Distribution and the net asset value of the Fund's
shares is higher than its market price, the Agent will apply the amount of such
Distribution payable to Plan participants of the Fund in Fund shares (less such
Plan participant's pro rata share of brokerage commissions incurred with respect
to Open Market Purchases in connection with the reinvestment of such
Distribution) to the purchase on the open market of Fund shares for such Plan
participant's account. Such purchases will be made on or after the payable date
for such Distribution, and in no event more than 30 days after such date except
where temporary curtailment or suspension of purchase is necessary to comply
with applicable provisions of federal securities laws. The Agent may aggregate a
Plan participant's purchases with the purchases of other Plan participants, and
the average price (including brokerage commissions) of all shares purchased by
the Agent shall be the price per share allocable to each Plan participant.

Participants in the Plan may withdraw from the Plan by providing written notice
to the Agent at least 30 days prior to the applicable Distribution payment date.
When a Participant withdraws from the Plan, or upon suspension or termination of
the Plan at the sole discretion of the Fund's Board of Directors, certificates
for whole shares credited to his or her account under the Plan will, upon
request, be issued. Whether or not a participant requests that certificates for
whole shares be issued, a cash payment will be made for any fraction of a share
credited to such account.

The Agent will maintain all shareholder accounts in the Plan and furnish written
confirmations of all transactions in the accounts, including information needed
by shareholders for personal and tax records. The Agent will hold shares in the
account of the Plan participant in non-certificated form in the name of the
participant, and each shareholder's proxy will include those shares purchased
pursuant to the Plan. Each participant, nevertheless, has the right


                                                                              19
<PAGE>

DESCRIPTION OF DIVIDEND REINVESTMENT PLAN (UNAUDITED) (CONCLUDED)

to receive certificates for whole shares owned. The Agent will distribute all
proxy solicitation materials to participating shareholders.

In the case of shareholders, such as banks, brokers or nominees, that hold
shares for others who are beneficial owners participating in the Plan, the Agent
will administer the Plan on the basis of the number of shares certified from
time to time by the record shareholder as representing the total amount of
shares registered in the shareholder's name and held for the account of
beneficial owners participating in the Plan.

Neither the Agent nor the Fund shall have any responsibility or liability beyond
the exercise of ordinary care for any action taken or omitted pursuant to the
Plan, nor shall they have any duties, responsibilities or liabilities except
such as expressly set forth herein. Neither shall they be liable hereunder for
any act done in good faith or for any good faith omissions to act, including,
without limitation, failure to terminate a participants account prior to receipt
of written notice of his or her death or with respect to prices at which shares
are purchased or sold for the participants account and the terms on which such
purchases and sales are made, subject to applicable provisions of the federal
securities laws.

The automatic reinvestment of Distributions will not relieve participants of any
federal, state or local income tax that may be payable (or required to be
withheld) on such Distributions.

The Fund reserves the right to amend or terminate the Plan. There is no direct
service charge to participants with regard to purchases in the Plan.

All correspondence concerning the Plan should be directed to the Agent at P.O.
Box 922, Wall Street Station, New York, New York 10269-0560. Certain
transactions can be performed online at www.amstock.com or by calling the toll
free number 877-864-4833.


20
<PAGE>

PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)

Information regarding how Cornerstone Total Return Fund, Inc. (the "Fund") voted
proxies related to its portfolio securities during the 12-month period ended
June 30 of each year as well as the policies and procedures that the Fund uses
to determine how to vote proxies relating to its portfolio securities are
available by calling (513) 326-3597 or on the website of the Securities and
Exchange Commission, http://www.sec.gov.

This report incorporates a Summary Schedule of Investments for the Fund. A
complete Schedule of Investments for the Fund may be obtained free of charge by
contacting the Fund at (513) 326-3597. The Fund files a complete schedule of its
portfolio holdings for the first and third quarters of its fiscal year with the
SEC on Form N-Q. The Fund's Forms N-Q is available on the SEC's website at
http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference
Room in Washington, DC. Information on the operation of the SEC's Public
Reference Room may be obtained by calling (202) 551-8090.


                                                                              21
<PAGE>

PRIVACY POLICY (UNAUDITED)

--------------------------------------------------------------------------------
FACTS       WHAT DOES CORNERSTONE TOTAL RETURN FUND, INC. (THE "FUND") DO WITH
            YOUR PERSONAL INFORMATION?
--------------------------------------------------------------------------------
Why?        Financial companies choose how they share your personal information.
            Federal law gives consumers the right to limit some but not all
            sharing. Federal law also requires us to tell you how we collect,
            share, and protect your personal information. Please read this
            notice carefully to understand what we do.
--------------------------------------------------------------------------------
What?       The types of personal information we, and our service providers, on
            our behalf, collect and share depend on the product or service you
            have with us. This information can include:

            o Social Security number
            o account balances
            o account transactions
            o transaction history
            o wire transfer instructions
            o checking account information

            When you are no longer our customer, we continue to share your
            information as described in this notice.
--------------------------------------------------------------------------------
How?        All financial companies need to share customers' personal
            information to run their everyday business. In the section below, we
            list the reasons financial companies can share their customers'
            personal information; the reasons the Fund, and our service
            providers, on our behalf, choose to share; and whether you can limit
            this sharing.
--------------------------------------------------------------------------------


22
<PAGE>

PRIVACY POLICY (UNAUDITED) (CONTINUED)

                                              DOES THE
REASONS WE CAN SHARE YOUR                     CORNERSTONE         CAN YOU LIMIT
PERSONAL INFORMATION                          FUND SHARE?         THIS SHARING?
--------------------------------------------------------------------------------
FOR OUR EVERYDAY BUSINESS PURPOSES            Yes                 No
- such as to process your transactions,
maintain your account(s), respond to
court orders and legal investigations, or
report to credit bureaus
--------------------------------------------------------------------------------
FOR OUR MARKETING PURPOSES - to               No                  We don't share
offer our products and services to you
--------------------------------------------------------------------------------
FOR JOINT MARKETING WITH OTHER                No                  We don't share
FINANCIAL COMPANIES
--------------------------------------------------------------------------------
FOR OUR AFFILIATES' EVERYDAY BUSINESS         Yes                 No
PURPOSES - information about your
transactions and experiences
--------------------------------------------------------------------------------
FOR OUR AFFILIATES' EVERYDAY BUSINESS         No                  We don't share
PURPOSES - information about your
creditworthiness
--------------------------------------------------------------------------------
FOR OUR AFFILIATES TO MARKET TO YOU           No                  We don't share
--------------------------------------------------------------------------------
FOR NONAFFILIATES TO MARKET TO YOU            No                  We don't share
--------------------------------------------------------------------------------
Questions? Call (513) 326-3597.
--------------------------------------------------------------------------------
What we do
--------------------------------------------------------------------------------
WHO IS PROVIDING THIS NOTICE?       Cornerstone Total Return Fund, Inc.
                                    (the "Fund")
--------------------------------------------------------------------------------
HOW DOES THE FUND AND THE           To protect your personal information from
FUND'S SERVICE PROVIDERS, ON        unauthorized access and use, we and our
THE FUND'S BEHALF PROTECT MY        service providers use security measures that
PERSONAL INFORMATION?               comply with federal law. These measures
                                    include computer safeguards and secured
                                    files and buildings.
--------------------------------------------------------------------------------
HOW DOES THE FUND AND THE           We collect your personal information,
FUND'S SERVICE PROVIDERS, ON        for example, when you:
THE FUND'S BEHALF COLLECT MY
PERSONAL INFORMATION?               o open an account
                                    o provide account information
                                    o give us your contact information
                                    o make a wire transfer

                                    We also your information from others, such
                                    as collect credit bureaus, affiliates, or
                                    other companies.
--------------------------------------------------------------------------------


                                                                              23
<PAGE>

PRIVACY POLICY (UNAUDITED) (CONCLUDED)

--------------------------------------------------------------------------------
WHY CAN'T I LIMIT ALL SHARING?      Federal law gives you the right to limit
                                    only

                                    o  sharing for affiliates' everyday
                                       business purposes - information about
                                       your creditworthiness
                                    o  affiliates from using your information
                                       to market to
                                    o  sharing for nonaffiliates to market to
                                       you

                                    State laws and individual companies may give
                                    you additional rights to limit sharing.
--------------------------------------------------------------------------------
DEFINITIONS
--------------------------------------------------------------------------------
AFFILIATES                          Companies related by common ownership or
                                    control. They can be financial and
                                    nonfinancial companies.

                                    o  CORNERSTONE ADVISORS, INC.
--------------------------------------------------------------------------------
NONAFFILIATES                       Companies not related by common ownership or
                                    control. They can be financial and
                                    nonfinancial companies.

                                    O  THE FUND DOES NOT SHARE WITH
                                       NONAFFILIATES, SO THEY CAN MARKET TO YOU.
--------------------------------------------------------------------------------
JOINT MARKETING                     A formal agreement between nonaffiliated
                                    financial companies that together market
                                    financial products or services to you.

                                    O  THE FUND DOES NOT JOINTLY MARKET.
--------------------------------------------------------------------------------


24
<PAGE>

SUMMARY OF GENERAL INFORMATION (UNAUDITED)

Cornerstone Total Return Fund, Inc. is a closed-end, diversified investment
company whose shares trade on the NYSE Amex LLC. Its investment objective is to
seek capital appreciation with current income as a secondary objective. The Fund
is managed by Cornerstone Advisors, Inc.

SHAREHOLDER INFORMATION (UNAUDITED)

The Fund is listed on the NYSE Amex LLC (symbol "CRF"). The previous week's net
asset value per share, market price, and related premium or discount are
available on The Wall Street Journal website at
http://online.wsj.com/mdc/public/page/2_3040-CEF34.html under the designation
"Cornerstone Total Return (CRF)" and on the Barron's website at
http://online.barrons.com/mdc/public/page/2_3040-CEF34.html under the same
designation. Such information is available weekly and may be obtained by
contacting the Fund at the general inquiry phone number.

Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that Cornerstone Total Return Fund, Inc. may
from time to time purchase shares of its capital stock in the open market.

This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a prospectus, circular
or representation intended for use in the purchase or sale of shares of the Fund
or of any securities mentioned in the report.
<PAGE>

                      CORNERSTONE TOTAL RETURN FUND, INC.
<PAGE>

DIRECTORS AND CORPORATE OFFICERS
Ralph W. Bradshaw                   Chairman of the Board of
                                      Directors and President
Thomas H. Lenagh                    Director
Edwin Meese III                     Director
Scott B. Rogers                     Director
Andrew A. Strauss                   Director
Glenn W. Wilcox, Sr.                Director
Gary A. Bentz                       Chief Compliance Officer,
                                    Secretary, and
                                    Assistant Treasurer
Frank J. Maresca                    Treasurer

                                    STOCK TRANSFER AGENT
INVESTMENT MANAGER                    AND REGISTRAR, LLC
Cornerstone Advisors, Inc.          American Stock Transfer &
1075 Hendersonville Road            Trust Co., LLC
Suite 250                           59 Maiden Lane
Asheville, NC 28803                 New York, NY 10038

                                    INDEPENDENT REGISTERED
ADMINISTRATOR                         PUBLIC ACCOUNTING FIRM
Ultimus Fund Solutions, LLC         Tait, Weller & Baker LLP
350 Jericho Turnpike                1818 Market Street
Suite 206                           Suite 2400
Jericho, NY 11753                   Philadelphia, PA 19103

CUSTODIAN                           LEGAL COUNSEL
U.S. Bank, N.A.                     Blank Rome LLP
425 Walnut Street                   405 Lexington Avenue
Cincinnati, OH 45202                New York, NY 10174

EXECUTIVE OFFICES
350 Jericho Turnpike
Suite 206
Jericho, NY 11753

For shareholder inquiries, registered shareholders should call (800) 937-5449.
For general inquiries, please call (513) 326-3597.
<PAGE>

ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a
copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR.
During the period covered by this report, the code of ethics has not been
amended, and the registrant has not granted any waivers, including implicit
waivers, from the provisions of the code of ethics.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant's board of directors has determined that the registrant does not
have an audit committee financial expert serving on its audit committee. The
audit committee determined that, although none of its members meet the technical
definition of an audit committee financial expert, the experience provided by
each member of the audit committee together offer the registrant adequate
oversight for the registrant's current level of financial complexity.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

      (a)   Audit Fees. The aggregate fees billed for professional services
            rendered by the principal accountant for the audit of the
            registrant's annual financial statements or for services that are
            normally provided by the accountant in connection with statutory and
            regulatory filings or engagements were $14,500 and $14,100 with
            respect to the registrant's fiscal years ended December 31, 2010 and
            2009, respectively.

      (b)   Audit-Related Fees. No fees were billed in either of the last two
            fiscal years for assurance and related services by the principal
            accountant that are reasonably related to the performance of the
            audit of the registrant's financial statements and are not reported
            under paragraph (a) of this Item.

      (c)   Tax Fees. The aggregate fees billed for professional services
            rendered by the principal accountant for tax compliance, tax advice,
            and tax planning were $3,300 and $3,000 with respect to the
            registrant's fiscal years ended December 31, 2010 and 2009,
            respectively. The services comprising these fees are the preparation
            of the registrant's federal and state income and federal excise tax
            returns.

      (d)   All Other Fees. No fees were billed in either of the last two fiscal
            years for products and services provided by the principal
            accountant, other than the services reported in paragraphs (a)
            through (c) of this Item.

      (e)(1) Before the principal accountant is engaged by the registrant to
            render (i) audit, audit-related or permissible non-audit services to
            the registrant or (ii) non-audit services to the registrant's
            investment adviser and any entity controlling, controlled by, or
            under common control with the adviser that provides ongoing services
            to the registrant, either (a) the audit committee shall pre-approve
            such engagement; or (b) such engagement shall be entered into
            pursuant to pre-approval policies and procedures established by the
            audit committee. Any such policies and procedures must be detailed
            as to the particular service and not involve any delegation of the
            audit committee's responsibilities to the registrant's investment
            adviser. The audit committee may delegate to one or more of its
            members the authority to grant pre-approvals. The pre-approval
            policies and procedures shall include the requirement that the
            decisions of any member to whom authority is delegated under this
            provision shall be presented to the full audit committee at its next
            scheduled meeting. Under certain limited circumstances,
            pre-approvals are not required if certain de minimus thresholds are
            not exceeded, as such thresholds are determined by the audit
            committee in accordance with applicable Commission regulations.
<PAGE>

      (e)(2) None of the services described in paragraph (b) through (d) of this
            Item were approved by the audit committee pursuant to paragraph
            (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

      (f)   Less than 50% of hours expended on the principal accountant's
            engagement to audit the registrant's financial statements for the
            most recent fiscal year were attributed to work performed by persons
            other than the principal accountant's full-time, permanent
            employees.

      (g)   During the fiscal years ended December 31, 2010 and 2009, aggregate
            non-audit fees of $3,300 and $3,000, respectively, were billed by
            the registrant's principal accountant for services rendered to the
            registrant. No non-audit fees were billed in either of the last two
            fiscal years by the registrant's principal accountant for services
            rendered to the registrant's investment adviser (not including any
            sub-adviser whose role is primarily portfolio management and is
            subcontracted with or overseen by another investment adviser), and
            any entity controlling, controlled by, or under common control with
            the adviser that provides ongoing services to the registrant.

      (h)   The principal accountant has not provided any non-audit services to
            the registrant's investment adviser (not including any sub-adviser
            whose role is primarily portfolio management and is subcontracted
            with or overseen by another investment adviser), and any entity
            controlling, controlled by, or under common control with the
            investment adviser that provides ongoing services to the registrant.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

      (a)   The registrant has a separately-designated standing audit committee
            established in accordance with Section 3(a)(58)(A) of the Securities
            and Exchange Act of 1934. Glenn W. Wilcox, Sr., (Chairman), Edwin
            Meese, III, Thomas H. Lenagh, Andrew A. Strauss and Scott B. Rogers
            are the members of the registrant's audit committee.

      (b)   Not applicable
<PAGE>

ITEM 6. SCHEDULE OF INVESTMENTS.

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010

DESCRIPTION                                       NO. OF SHARES       VALUE
--------------------------------------------------------------------------------
EQUITY SECURITIES - 94.13%
 CLOSED-END FUNDS - 9.41%
  CORE - 3.71%
    Adams Express Company (The) (a)                      59,400    $   636,768
    Royce Micro-Cap Trust, Inc.                           8,200         80,360
    Royce Value Trust, Inc.                               8,000        116,320
    SunAmerica Focused Alpha Large-Cap Fund,
     Inc                                                  8,000        125,920
                                                                   -----------
                                                                       959,368
                                                                   -----------
   CORPORATE DEBT FUNDS INVESTMENT
   GRADE-RATED - 0.39%
    AllianceBernstein Income Fund                         6,000         47,580
    MFS Government Markets Income Trust                   8,000         54,400
                                                                   -----------
                                                                       101,980
                                                                   -----------
   DEVELOPED MARKET - 0.12%
    Ibero-America Fund, Inc.                              2,123         13,884
    New Ireland Fund, Inc. (The)                          2,620         17,974
                                                                   -----------
                                                                        31,858
                                                                   -----------
   GLOBAL INCOME - 0.83%
    Nuveen Multi-Currency Short-Term
     Government Income Fund                              15,656        215,583
                                                                   -----------
   HIGH CURRENT YIELD (LEVERAGED) - 0.25%
    First Trust Strategic High Income Fund                8,000         26,720
    First Trust Strategic High Income Fund III            9,000         39,150
                                                                   -----------
                                                                        65,870
                                                                   -----------
   INCOME & PREFERRED STOCK - 0.34%
    Preferred Income Strategies Fund                      8,951         87,988
                                                                   -----------
   OPTION ARBITRAGE/OPTIONS STRATEGIES                       --           2.29%
    Eaton Vance Risk-Managed Diversified Equity
     Income Fund                                         28,800        382,464
    NFJ Dividend, Interest & Premium Strategy
     Fund                                                12,000        210,120
                                                                   -----------
                                                                       592,584
                                                                   -----------
   REAL ESTATE - 0.12%
    LMP Real Estate Income Fund, Inc.                     3,000         30,300
                                                                   -----------
   SECTOR EQUITY - 1.10%
    Evergreen Utilities and High Income Fund              5,010         58,116
    Gabelli Healthcare & Wellness Rx Trust (The)          7,074         50,084
    H&Q Life Sciences Investors                           9,000         96,930

See accompanying notes to schedule of investments.
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010  (Continued)

 CLOSED-END FUNDS (CONTINUED)
    Petroleum & Resources Corporation (a)                 3,000    $    81,030
                                                                   -----------
                                                                       286,160
                                                                   -----------
   U.S. MORTGAGE - 0.26%
    BlackRock Income Trust, Inc.                          9,896         67,689
                                                                   -----------
   TOTAL CLOSED-END FUNDS                                            2,439,380
                                                                   -----------
   CONSUMER DISCRETIONARY - 8.75%
    Bed Bath & Beyond, Inc. *                             2,500        122,875
    Carnival Corporation                                  2,500        115,275
    Comcast Corporation - Class A                         2,012         44,204
    Comcast Corporation - Special Class A                 4,250         88,443
    DIRECTV Group, Inc. (The) - Class A *                 4,000        159,720
    Ford Motor Company *                                 10,000        167,900
    Gap, Inc. (The)                                       2,500         55,350
    Home Depot, Inc. (The)                                5,000        175,300
    Kohl's Corporation *                                  2,000        108,680
    McDonald's Corporation                                2,000        153,520
    News Corporation - Class B                            2,500         41,050
    NIKE, Inc. - Class B                                  2,500        213,550
    Starbucks Corporation                                 2,500         80,325
    Target Corporation                                    1,500         90,195
    Time Warner, Inc.                                     4,666        150,105
    TJX Companies, Inc. (The)                             2,500        110,975
    Viacom, Inc. - Class B                                2,000         79,220
    Walt Disney Company (The)                             5,000        187,549
    Yum! Brands, Inc.                                     2,500        122,625
                                                                   -----------
                                                                     2,266,861
                                                                   -----------
   CONSUMER STAPLES - 9.55%
    Altria Group, Inc.                                    5,000        123,100
    Coca-Cola Company (The)                               5,000        328,850
    Coca-Cola Enterprises                                 2,500         62,575
    Colgate-Palmolive Company                             1,000         80,370
    General Mills, Inc.                                   3,000        106,770
    H.J. Heinz Company                                    2,700        133,542
    PepsiCo, Inc.                                         4,000        261,320
    Philip Morris International, Inc.                     5,000        292,650
    Procter & Gamble Company (The)                        6,972        448,509
    Sara Lee Corporation                                  2,500         43,775
    Wal-Mart Stores, Inc.                                11,000        593,230
                                                                   -----------
                                                                     2,474,691
                                                                   -----------
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010  (Continued)

   ENERGY - 10.75%
    Apache Corporation                                    2,000    $   238,460
    Chevron Corporation                                   3,500        319,375
    ConocoPhillips                                        5,000        340,500
    El Paso Corporation                                   5,000         68,800
    EOG Resources, Inc.                                   1,000         91,410
    Exxon Mobil Corporation                              12,000        877,440
    Halliburton Company                                   2,500        102,075
    Occidental Petroleum Corporation                      4,000        392,400
    Schlumberger Ltd.                                     3,000        250,500
    Southwestern Energy Company *                         1,500         56,145
    Williams Companies, Inc.                              2,000         49,440
                                                                   -----------
                                                                     2,786,545
                                                                   -----------
   FINANCIALS - 12.49%
    AFLAC, Inc.                                           1,500         84,645
    American Express Company                              4,000        171,680
    Bank of America Corporation                          16,521        220,390
    Bank of New York Mellon Corporation (The)             3,000         90,600
    BB&T Corporation                                      2,000         52,580
    Capital One Financial Corporation                     2,500        106,400
    Chubb Corporation (The)                               1,000         59,640
    Citigroup, Inc. *                                    28,000        132,440
    Discover Financial Services                           1,000         18,530
    Franklin Resources, Inc.                              1,000        111,210
    Goldman Sachs Group, Inc. (The)                       2,500        420,400
    Hudson City Bancorp, Inc.                             2,500         31,850
    JPMorgan Chase & Company                             12,200        517,524
    KeyCorp                                               2,500         22,125
    M&T Bank Corporation                                  1,000         87,050
    Marsh & McLennan Companies, Inc.                      4,000        109,360
    MetLife, Inc.                                         1,500         66,660
    Morgan Stanley                                        2,000         54,420
    PNC Financial Services Group, Inc.                    1,000         60,720
    Prudential Financial, Inc.                            1,500         88,065
    State Street Corporation                              2,000         92,680
    Travelers Companies, Inc. (The)                       3,092        172,255
    U.S. Bancorp                                          3,500         94,395
    Unum Group                                            2,500         60,550
    Wells Fargo & Company                                10,000        309,900
                                                                   -----------
                                                                     3,236,069
                                                                   -----------
   HEALTH CARE - 9.57%
    Abbott Laboratories                                   3,000        143,730
    Allergan, Inc.                                        1,000         68,670
    Amgen, Inc. *                                         3,000        164,700
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010  (Continued)

   HEALTH CARE (CONTINUED)
    Baxter International, Inc.                            2,500    $   126,550
    Bristol-Myers Squibb Company                          6,000        158,880
    Celgene Corporation *                                 1,000         59,140
    Cigna Corporation                                     3,000        109,980
    Eli Lilly & Company                                   2,500         87,600
    Express Scripts, Inc. *                               2,400        129,720
    Gilead Sciences, Inc. *                               2,000         72,480
    Johnson & Johnson                                     7,500        463,875
    McKesson Corporation                                  2,500        175,950
    Medco Health Solutions, Inc. *                        1,000         61,270
    Medtronic, Inc.                                       4,500        166,905
    Merck & Company, Inc.                                 2,500         90,100
    Pfizer, Inc.                                          6,462        113,150
    Stryker Corporation                                   1,000         53,700
    UnitedHealth Group, Inc.                              2,500         90,275
    WellPoint, Inc. *                                     2,500        142,150
                                                                   -----------
                                                                     2,478,825
                                                                   -----------
   INDUSTRIALS - 8.86%
    3M Company                                            2,500        215,750
    Boeing Company (The)                                  2,000        130,520
    Danaher Corporation                                   2,000         94,340
    Deere & Company                                       1,500        124,575
    Emerson Electric Company                              2,500        142,925
    FedEx Corporation                                     1,500        139,515
    General Dynamics Corporation                          2,000        141,920
    General Electric Company                             24,000        438,960
    Lockheed Martin Corporation                           2,500        174,775
    Precision Castparts Corporation                       1,000        139,210
    Republic Services, Inc.                               1,125         33,593
    Southwest Airlines Company                            2,000         25,960
    Union Pacific Corporation                             2,500        231,650
    United Parcel Service, Inc. - Class B                 2,000        145,160
    United Technologies Corporation                       1,500        118,080
                                                                   -----------
                                                                     2,296,933
                                                                   -----------
   INFORMATION TECHNOLOGY - 16.43%
    AOL, Inc. *                                             242          5,738
    Apple, Inc. *                                         2,000        645,119
    Applied Materials, Inc.                               3,000         42,150
    Cognizant Technology Solutions Corporation -
     Class A *                                            1,500        109,935
    Corning, Inc.                                         5,000         96,600
    eBay, Inc. *                                          2,500         69,575
    EMC Corporation *                                     5,000        114,500
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010  (Continued)

   INFORMATION TECHNOLOGY (CONTINUED)
    Google, Inc. - Class A *                              1,000    $   593,970
    Hewlett-Packard Company                               8,000        336,800
    Intel Corporation                                    17,000        357,510
    International Business Machines Corporation           4,000        587,040
    Intuit, Inc. *                                        2,500        123,250
    Micron Technology, Inc. *                             2,000         16,040
    Microsoft Corporation                                24,000        670,080
    Oracle Corporation                                   12,600        394,380
    Texas Instruments, Inc.                               3,000         97,500
                                                                   -----------
                                                                     4,260,187
                                                                   -----------
   MATERIALS - 3.18%
    Air Products & Chemicals, Inc.                        1,500        136,425
    Dow Chemical Company (The)                            2,500         85,350
    E.I. Du Pont de Nemours & Company                     4,800        239,424
    Freeport-McMoRan Copper & Gold, Inc.                  2,500        300,225
    Newmont Mining Corporation                            1,000         61,430
                                                                   -----------
                                                                       822,854
                                                                   -----------
   REAL ESTATE INVESTMENT TRUST - 0.01%
    Simon Property Group, Inc.                               16          1,592
                                                                   -----------
   TELECOMMUNICATION SERVICES - 2.65%
    AT&T, Inc.                                           17,089        502,075
    Centurytel, Inc.                                      4,000        184,680
                                                                   -----------
                                                                       686,755
                                                                   -----------
   UTILITIES - 2.48%
    Consolidated Edison, Inc.                             1,000         49,570
    Dominion Resources, Inc.                              2,000         85,440
    Duke Energy Corporation                               6,600        117,546
    Exelon Corporation                                    2,000         83,280
    NiSource, Inc.                                        2,500         44,050
    Southern Company (The)                                3,500        133,805
    Xcel Energy, Inc.                                     5,500        129,525
                                                                   -----------
                                                                       643,216
                                                                   -----------
TOTAL EQUITY SECURITIES (cost - $23,055,479)                        24,393,908
                                                                   -----------
SHORT-TERM INVESTMENTS - 8.02%
 MONEY MARKET SECURITY - 8.02%
  JPMorgan U.S. Government Money Market Fund
   (cost - $2,077,580)                                2,077,580      2,077,580
                                                                   -----------
<PAGE>

CORNERSTONE TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2010  (Continued)

TOTAL INVESTMENTS - 102.15% (cost - $25,133,059)                   $26,471,488
                                                                   -----------
LIABILITIES IN EXCESS OF OTHER ASSETS - (2.15)%                       (558,268)
                                                                   -----------
NET ASSETS - 100.00%                                               $25,913,220
                                                                   ===========

----------
(a) Affiliated investment. The Fund holds 2.46% and 0.31% (based on net assets)
of Adams Express Company and Petroleum & Resources Corporation, respectively. A
director of the Fund also serves as a director to such companies. During the
year ended December 31, 2010 there were additional purchases of 3,000 shares of
Petroleum & Resources Corporation with a cost of $63,070. There were no
purchases or sales of Adams Express Company during the year.
* Non-income producing security.

See accompanying notes to schedule of investments.
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
CORNERSTONE TOTAL RETURN FUND, INC.
NEW YORK, NEW YORK

We have audited the accompanying statement of assets and liabilities of the
Cornerstone Total Return Fund, Inc. (the "Fund"), including the summary schedule
of investments as of December 31, 2010, the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2010, by correspondence with the custodian
and brokers. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Cornerstone Total Return Fund, Inc. as of December 31, 2010, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of investments in securities
as of December 31, 2010 appearing in Item 6 of this Form N-CSR is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
Fund's management. Such information has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

                                                        TAIT, WELLER & BAKER LLP

PHILADELPHIA, PENNSYLVANIA
FEBRUARY 28, 2011
<PAGE>

(b) Not applicable

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

The registrant and Cornerstone Advisors, Inc., the registrant's investment
adviser, share the same proxy voting policies and procedures. The proxy voting
policies and procedures of the registrant and Cornerstone Advisors, Inc. are
attached as Exhibit 99.VOTEREG.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a)(1) All information included in this Item is as of the date of the filing of
      this Form N-CSR, unless otherwise noted. Ralph W. Bradshaw is the
      portfolio manager of the registrant. Mr. Bradshaw has acted as portfolio
      manager since 2002. Mr. Bradshaw is President and Chief Financial Officer
      of Cornerstone Advisors, Inc. and serves as President and Chairman of the
      Board of the registrant, Cornerstone Progressive Return Fund and
      Cornerstone Strategic Value Fund, Inc.

(a)(2) Ralph W. Bradshaw manages two other closed-end registered investment
      companies: Cornerstone Progressive Return Fund and Cornerstone Strategic
      Value Fund, Inc. As of December 31, 2010, net assets of Cornerstone
      Progressive Return Fund were $55,276,998 and net assets of Cornerstone
      Strategic Value Fund, Inc. were $64,265,689. Mr. Bradshaw manages no
      accounts except for the registrant, Cornerstone Progressive Return Fund
      and Cornerstone Strategic Value Fund, Inc. Mr. Bradshaw manages no
      accounts where the advisory fee is based on the performance of the
      account. No material conflicts of interest exist in connection with the
      portfolio manager's management of the registrant's investments, on the one
      hand, and the investment of the other accounts included in response to
      this Item, on the other.

(a)(3) Compensation of Ralph W. Bradshaw includes a fixed salary paid by
      Cornerstone Advisors, Inc. plus his share of the profits of Cornerstone
      Advisors, Inc. The profitability of Cornerstone Advisors, Inc. is
      primarily dependent upon the value of the assets of the registrant and
      other managed accounts. However, compensation is not directly based upon
      the registrant's performance or on the value of the registrant's assets.

(a)(4) The dollar range of equity securities in the registrant beneficially
      owned by each portfolio manager as of December 31, 2010 is as follows:
      Ralph W. Bradshaw: $10,001 - $50,000 (b) Not applicable

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

None
<PAGE>

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors that have been
implemented after the registrant last provided disclosure in response to the
requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) or this
Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, the
registrant's principal executive officer and principal financial officer have
concluded that such disclosure controls and procedures are reasonably designed
and are operating effectively to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to them
by others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.

(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Attached hereto

(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable

(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): Attached hereto

Exhibit 99.CODE ETH       Code of Ethics

Exhibit 99.VOTEREG        Proxy Voting Policies and Procedures

Exhibit 99.CERT           Certifications required by Rule 30a-2(a) under the Act

Exhibit 99.906CERT        Certifications required by Rule 30a-2(b) under the Act
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Cornerstone Total Return Fund, Inc.

By (Signature and Title)* /s/ Ralph W. Bradshaw
                          ------------------------------------------------------
                          Ralph W. Bradshaw, Chairman and President
                          (Principal Executive Officer)

Date  March 8, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /s/ Ralph W. Bradshaw
                          ------------------------------------------------------
                          Ralph W. Bradshaw, Chairman and President
                          (Principal Executive Officer)

Date  March 8, 2011

By (Signature and Title)* /s/ Frank J. Maresca
                          ------------------------------------------------------
                          Frank J. Maresca, Treasurer
                          (Principal Financial Officer)

Date  March 8, 2011

* Print the name and title of each signing officer under his or her signature.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>2
<FILENAME>exh-eth.txt
<TEXT>


                     CORNERSTONE STRATEGIC VALUE FUND, INC.
                      CORNERSTONE TOTAL RETURN FUND, INC.
                      CORNERSTONE PROGRESSIVE RETURN FUND

                       CODE OF ETHICS FOR SENIOR OFFICERS

PREAMBLE

     Section 406 of the Sarbanes-Oxley Act of 2002 directs that rules be adopted
disclosing whether a company has a code of ethics for senior financial officers.
The U.S. Securities and Exchange Commission (the "SEC") has adopted rules
requiring annual disclosure of an investment company's code of ethics applicable
to the company's principal executive as well as principal financial officers, if
such a code has been adopted. In response, Cornerstone Strategic Value Fund,
Inc., Cornerstone Total Return Fund, Inc. and Cornerstone Progressive Return
Fund (the "Funds") have each adopted this Code of Ethics.

STATEMENT OF POLICY

     It is the obligation of the senior officers of each Fund to provide full,
fair, timely and comprehensible disclosure--financial and otherwise--to the
Fund's shareholders, regulatory authorities and the general public. In
fulfilling that obligation, senior officers must act ethically, honestly and
diligently. This Code is intended to enunciate guidelines to be followed by
persons who serve each Fund in senior officer positions. No Code of Ethics can
address every situation that a senior officer might face; however, as a guiding
principle, senior officers should strive to implement the spirit as well as the
letter of applicable laws, rules and regulations, and to provide the type of
clear and complete disclosure and information each Fund's shareholders have a
right to expect.

     The purpose of this Code of Ethics (the "Code") is to promote high
standards of ethical conduct by Covered Persons (as defined below) in their
capacities as officers of the Funds, to instruct them as to what is considered
to be inappropriate and unacceptable conduct or activities for officers and to
prohibit such conduct or activities. This Code supplements other policies that
the Funds and its adviser have adopted or may adopt in the future with which
Fund officers are also required to comply (e.g., code of ethics relating to
personal trading and conduct).

COVERED PERSONS

     This Code applies to those persons appointed by the each Fund's Board of
Directors as Chief Executive Officer, President, Chief Financial Officer and
Chief Accounting Officer, or persons performing similar functions.

PROMOTION OF HONEST AND ETHICAL CONDUCT

     In serving as an officer of a Fund, each Covered Person must maintain high
standards of honesty and ethical conduct and must encourage his colleagues who
provide services to a Fund, whether directly or indirectly, to do the same.

     Each Covered Person understands that as an officer of a Fund, he has a duty
to act in the best interests of the Fund and its shareholders. The interests of
the Covered Person's personal interests should not be allowed to compromise the
Covered Person from fulfilling his duties as an officer of the Fund.

     If a Covered Person believes that his personal interests are likely to
materially compromise his objectivity or his ability to perform the duties of
his role as an officer of a Fund, he should consult with the Fund's chief legal
officer or outside counsel. Under appropriate circumstances, a Covered Person
should also consider whether to present the matter to the Directors of a Fund or
a committee thereof.

     No Covered Person shall suggest that any person providing, or soliciting to
be retained to provide, services to a Fund give a gift or an economic benefit of
any kind to him in connection with the person's retention or the provision of
services.

PROMOTION OF FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSURE

     No Covered Person shall create or further the creation of false or
misleading information in any SEC filing or report to Fund shareholders. No
Covered Person shall conceal or fail to disclose information within the Covered
Person's possession legally required to be disclosed or necessary to make the
disclosure made not misleading. If a Covered Person shall become aware that
information filed with the SEC or made available to the public contains any
false or misleading information or omits to disclose necessary information, he
shall promptly report it to Fund counsel, who shall advise such Covered Person
whether corrective action is necessary or appropriate.

<PAGE>



     Each Covered Person, consistent with his responsibilities, shall exercise
appropriate supervision over, and shall assist, Fund service providers in
developing financial information and other disclosure that complies with
relevant law and presents information in a clear, comprehensible and complete
manner. Each Covered Person shall use his best efforts within his area of
expertise to assure that Fund reports reveal, rather than conceal, each Fund's
financial condition.

     Each Covered Person shall seek to obtain additional resources if he
believes that available resources are inadequate to enable the Fund to provide
full, fair and accurate financial information and other disclosure to regulators
and Fund shareholders.

     Each Covered Person shall inquire of other Fund officers and service
providers, as appropriate, to assure that information provided is accurate and
complete and presented in an understandable format using comprehensible
language.

     Each Covered Person shall diligently perform his services to the Fund, so
that information can be gathered and assessed early enough to facilitate timely
filings and issuance of reports and required certifications.

<PAGE>



PROMOTION OF COMPLIANCE WITH APPLICABLE GOVERNMENT LAWS, RULES AND REGULATIONS

     Each Covered Person shall become and remain knowledgeable concerning the
laws and regulations relating to each Fund and their operations and shall act
with competence and due care in serving as an officer of a Fund. Each Covered
Person with specific responsibility for financial statement disclosure will
become and remain knowledgeable concerning relevant auditing standards,
generally accepted accounting principles, FASB pronouncements and other
accounting and tax literature and developments.

     Each Covered Person shall devote sufficient time to fulfilling his
responsibilities to the Funds.

     Each Covered Person shall cooperate with each Fund's independent auditors,
regulatory agencies and internal auditors in their review or inspection of the
Fund and its operations.

     No Covered Person shall knowingly violate any law or regulation relating to
a Fund or their operations or seek to illegally circumvent any such law or
regulation.

     No Covered Person shall engage in any conduct involving dishonesty, fraud,
deceit or misrepresentation involving a Fund or its operations.

PROMOTING PROMPT INTERNAL REPORTING OF VIOLATIONS

     Each Covered Person shall promptly report his own violations of this Code
and violations by other Covered Persons of which he is aware to the Chairman of
the Fund's Audit Committee.

     Any requests for a waiver from or an amendment to this Code shall be made
to the Chairman of the Fund's Audit Committee. All waivers and amendments shall
be disclosed as required by law.

SANCTIONS

     Failure to comply with this Code will subject the violator to appropriate
sanctions, which will vary based on the nature and severity of the violation.
Such sanctions may include censure, suspension or termination of position as an
officer of the Fund. Sanctions shall be imposed by the Fund's Audit Committee,
subject to review by the entire Board of Directors of the Fund.

     Each Covered Person shall be required to certify annually whether he has
complied with this Code.

NO RIGHTS CREATED

     This Code of Ethics is a statement of certain fundamental principles,
policies and procedures that govern the Fund's senior officers in the conduct of
the Fund's business. It is not intended to and does not create any rights in any
employee, investor, supplier, competitor, shareholder or any other person or
entity.

<PAGE>



RECORDKEEPING

     Each Fund will maintain and preserve for a period of not less than six (6)
years from the date such action is taken, the first two (2) years in an easily
accessible place, a copy of the information or materials supplied to the Board
(i) that provided the basis for any amendment or waiver to this Code and (ii)
relating to any violation of the Code and sanctions imposed for such violation,
together with a written record of the approval or action taken by the Board.

AMENDMENTS

     The Directors will make and approve such changes to this Code of Ethics as
they deem necessary or appropriate to effectuate the purposes of this Code.

<PAGE>
                       CODE OF ETHICS FOR SENIOR OFFICERS

I HEREBY CERTIFY THAT:

     (1)  I have read and I understand the Code of Ethics for Senior Officers
          adopted by Cornerstone Strategic Value Fund, Inc., Cornerstone Total
          Return Fund, Inc. and Cornerstone Progressive Return Fund (the "Code
          of Ethics");

     (2)  I recognize that I am subject to the Code of Ethics;

     (3)  I have complied with the requirements of the Code of Ethics during the
          calendar year ending December 31, _______; and

     (4)  I have reported all violations of the Code of Ethics required to be
          reported pursuant to the requirements of the Code during the calendar
          year ending December 31, _____.

      Set forth below exceptions to items (3) and (4), if any:



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

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

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

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

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

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




Name:  _________________

Date:  _________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>exh99votereg.txt
<TEXT>

The following is a description of the policies and procedures that it uses to
determine how to vote proxies relating to portfolio securities as contained in
the following Glass Lewis' Proxy Paper Guidelines -- 2011 Proxy Season.

Where determined appropriate by the Adviser in order to comply with Federal
securities regulations and the rules promulgated thereunder, the Fund reserves
the right to shadow vote certain proxies received by it with respect to the
annual or special meetings of shareholders for companies in which the Fund is
invested.
<PAGE>


I. A BOARD OF DIRECTORS THAT

 SERVES THE INTERESTS OF SHAREHOLDERS
================================================================================

ELECTION OF DIRECTORS

The  purpose  of  Glass  Lewis'  proxy  research  and  advice  is  to facilitate
shareholder   voting   in   favor  of  governance  structures  that  will  drive
performance,  create  shareholder  value  and maintain a proper tone at the top.
Glass  Lewis  looks for talented boards with a record of protecting shareholders
and  delivering  value  over  the  medium- and long-term. We believe that boards
working   to  protect  and  enhance  the  best  interests  of  shareholders  are
independent,  have directors with diverse backgrounds, have a record of positive
performance, and have members with a breadth and depth of relevant experience.

Independence

The  independence  of  directors,  or  lack  thereof, is ultimately demonstrated
through  the decisions they make. In assessing the independence of directors, we
will  take  into consideration, when appropriate, whether a director has a track
record  indicative  of  making objective decisions. Likewise, when assessing the
independence  of  directors we will also examine when a director's service track
record  on  multiple  boards  indicates  a  lack  of  objective decision-making.
Ultimately, we believe the determination of whether a director is independent or
not   must   take   into  consideration  both  compliance  with  the  applicable
independence listing requirements as well as judgments made by the director.

We  look  at  each director nominee to examine the director's relationships with
the  company,  the  company's  executives,  and  other  directors. We do this to
evaluate  whether  personal, familial, or financial relationships (not including
director compensation) may impact the director's decisions. We believe that such
relationships  make  it  difficult for a director to put shareholders' interests
above  the  director's  or the related party's interests. We also believe that a
director  who  owns  more  than  20%  of  a  company  can exert disproportionate
influence on the board and, in particular, the audit committee.

Thus, we put directors into three categories based on an examination of the type
of relationship they have with the company:

      Independent  Director - An independent director has no material financial,
      familial  or other current relationships with the company, its executives,
      or  other  board  members, except for board service and standard fees paid
      for  that  service.  Relationships that existed within three to five years
      NASDAQ originally proposed a five-year look-back period but both it and



                                       1
<PAGE>



the  NYSE ultimately settled on a three-year look-back prior to finalizing their
rules. A five-year standard is more appropriate, in our view, because we believe
that  the  unwinding  of conflicting relationships between former management and
board members is more likely to be complete and final after five years. However,
Glass  Lewis does not apply the five-year look-back period to directors who have
previously served as executives of the company on an interim basis for less than
one  year.  before  the inquiry are usually considered "current" for purposes of
this test.

In  our  view,  a  director  who  is  currently serving in an interim management
position should be considered an insider, while a director who previously served
in  an  interim  management  position  for  less  than one year and is no longer
serving  in  such  capacity  is considered independent. Moreover, a director who
previously  served in an interim management position for over one year and is no
longer  serving  in  such  capacity  is  considered  an affiliate for five years
following  the  date  of  his/her  resignation  or  departure  from  the interim
management  position.  Glass  Lewis applies a three-year look-back period to all
directors who have an affiliation with the company other than former employment,
for which we apply a five-year look-back.

Affiliated  Director - An affiliated director has a material financial, familial
or other relationship with the company or its executives, but is not an employee
of  the  company.  If  a company classifies one of its non-employee directors as
non-independent,  Glass  Lewis will classify that director as an affiliate. This
includes  directors  whose employers have a material financial relationship with
the  company.  We  allow  a  five-year grace period for former executives of the
company  or  merged  companies who have consulting agreements with the surviving
company.  (We  do  not  automatically recommend voting against directors in such
cases for the first five years.) If the consulting agreement persists after this
five-year  grace  period,  we  apply  the materiality thresholds outlined in the
definition  of  "material." In addition, we view a director who owns or controls
20% or more of the company's voting stock as an affiliate.

We view 20% shareholders as affiliates because they typically have access to and
involvement  with  the  management  of a company that is fundamentally different
from  that  of  ordinary  shareholders.  More  importantly, 20% holders may have
interests  that  diverge from those of ordinary holders, for reasons such as the
liquidity (or lack thereof) of their holdings, personal tax issues, etc.


-------------
(1)  NASDAQ originally proposed a five-year look-back period but both it and the
NYSE  ultimately  settled  on  a  three-year look-back prior to finalizing their
rules. A five-year standard is more appropriate, in our view, because we believe
that  the  unwinding  of conflicting relationships between former management and
board members is more likely to be complete and final after five years. However,
Glass  Lewis does not apply the five-year look-back period to directors who have
previously served as executives of the company on an interim basis for less than
one year.

(2)   If   a   company   classifies   one   of  its  non-employee  directors  as
non-independent, Glass Lewis will classify that director as an affiliate.

(3)  We  allow  a five-year grace period for former executives of the company or
merged  companies who have consulting agreements with the surviving company. (We
do  not  automatically  recommend voting against directors in such cases for the
first  five  years.)  If  the consulting agreement persists after this five-year
grace  period, we apply the materiality thresholds outlined in the definition of
"material."

                                       2
<PAGE>








     Definition  of  "Material":  A  material  relationship  is one in which the
     dollar value exceeds:

     $50,000 (or  where no amount is disclosed) for directors who are paid for a
          service  they have agreed to perform for the company, outside of their
          service as a director, including professional or other services; or

     $120,000 (or  where no amount is disclosed) for those directors employed by
          a  professional  services firm such as a law firm, investment bank, or
          consulting  firm  where the company pays the firm, not the individual,
          for  services.  This  dollar  limit  would  also  apply  to charitable
          contributions  to  schools  where  a  board  member is a professor; or
          charities  where a director serves on the board or is an executive; We
          will  generally  take  into  consideration the size and nature of such
          charitable  entities  in  relation  to the company's size and industry
          along  with  any other relevant factors such as the director's role at
          the  charity.  However,  unlike  for  other  types  of  related  party
          transactions,  Glass Lewis generally does not apply a look-back period
          to affiliated relationships involving charitable contributions; if the
          relationship  ceases, we will consider the director to be independent.
          and  any aircraft and real estate dealings between the company and the
          director's firm; or

     1% of  either  company's  consolidated  gross  revenue for other business
          relationships  (e.g.,  where the director is an executive officer of a
          company  that provides services or products to or receives services or
          products from the company).

     Definition of "Familial": Familial relationships include a person's spouse,
     parents,  children, siblings, grandparents, uncles, aunts, cousins, nieces,
     nephews,  in-laws,  and  anyone  (other than domestic employees) who shares
     such person's home. A director is an affiliate if the director has a family
     member  who  is  employed  by  the company and who receives compensation of
     $120,000 or more per year or the compensation is not disclosed.

     Definition  of  "Company": A company includes any parent or subsidiary in a
     group  with the company or any entity that merged with, was acquired by, or
     acquired the company.

Inside  Director - An inside director simultaneously serves as a director and as
an  employee  of  the company. This category may include a chairman of the board
who acts as an employee of the company or is paid as an employee of the company.
In  our  view,  an  inside  director who derives a greater amount of income as a
result   of  affiliated  transactions  with  the  company  rather  than  through
compensation  paid  by  the  company  (i.e.,  salary,  bonus,  etc. as a company
employee)  faces  a  conflict  between  making  decisions  that  are in the best
interests  of  the  company  versus  those in the director's own best interests.
Therefore, we will recommend voting against such a director.

--------------
(4)  We  will  generally  take  into  consideration  the size and nature of such
charitable  entities  in  relation to the company's size and industry along with
any  other relevant factors such as the director's role at the charity. However,
unlike for other types of related party transactions, Glass Lewis generally does
not  apply  a  look-back period to affiliated relationships involving charitable
contributions;  if  the relationship ceases, we will consider the director to be
independent.


                                       3
<PAGE>



Voting Recommendations on the Basis of Board Independence

Glass  Lewis believes a board will be most effective in protecting shareholders'
interests  if  it  is  at least two-thirds independent. We note that each of the
Business  Roundtable,  the  Conference  Board,  and the Council of Institutional
Investors advocates that two-thirds of the board be independent. Where more than
one-third of the members are affiliated or inside directors, we typically With a
staggered  board, if the affiliates or insiders that we believe should not be on
the  board  are not up for election, we will express our concern regarding those
directors,  but  we  will  not  recommend voting against the other affiliates or
insiders  who  are  up  for  election  just  to achieve two-thirds independence.
However,  we  will consider recommending voting against the directors subject to
our  concern  at  their  next  election if the concerning issue is not resolved.
recommend voting against some of the inside and/or affiliated directors in order
to satisfy the two-thirds threshold.

However,  where a director serves on a board as a representative (as part of his
or  her  basic  responsibilities)  of  an  investment firm with greater than 20%
ownership,  we  will  generally  consider  him/her to be affiliated but will not
recommend  voting  against  unless  (i) the investment firm has disproportionate
board  representation or (ii) the director serves on the audit committee. I

In  the  case  of a less than two-thirds independent board, Glass Lewis strongly
supports the existence of a presiding or lead director with authority to set the
meeting agendas and to lead sessions outside the insider chairman's presence.

In  addition,  we scrutinize avowedly "independent" chairmen and lead directors.
We  believe that they should be unquestionably independent or the company should
not tout them as such.


-------------
(5) With a staggered board, if the affiliates or insiders that we believe should
not  be  on  the  board  are  not  up  for election, we will express our concern
regarding  those  directors,  but we will not recommend voting against the other
affiliates  or  insiders  who  are  up  for  election just to achieve two-thirds
independence.   However,  we  will  consider  recommending  voting  against  the
directors  subject to our concern at their next election if the concerning issue
is not resolved.

(6)  We  will recommend voting against an audit committee member who owns 20% or
more  of  the  company's stock, and we believe that there should be a maximum of
one  director  (or no directors if the committee is comprised of less than three
directors)  who  owns  20%  or  more of the company's stock on the compensation,
nominating, and governance committees.



                                       4
<PAGE>





Committee Independence

We  believe  that  only independent directors should serve on a company's audit,
compensation,  nominating,  and  governance committees. We will recommend voting
against  an  audit committee member who owns 20% or more of the company's stock,
and  we  believe that there should be a maximum of one director (or no directors
if the committee is comprised of less than three directors) who owns 20% or more
of   the  company's  stock  on  the  compensation,  nominating,  and  governance
committees. We typically recommend that shareholders vote against any affiliated
or inside director seeking appointment to an audit, compensation, nominating, or
governance committee, or who has served in that capacity in the past year.

         Independent Chairman

      Glass  Lewis  believes  that separating the roles of CEO (or, more rarely,
      another  executive  position)  and  chairman  creates  a better governance
      structure  than a combined CEO/chairman position. An executive manages the
      business  according to a course the board charts. Executives should report
      to the board regarding their performance in achieving goals the board set.
      This  is  needlessly  complicated  when  a  CEO  chairs the board, since a
      CEO/chairman presumably will have a significant influence over the board.

      It  can  become  difficult for a board to fulfill its role of overseer and
      policy  setter  when  a CEO/chairman controls the agenda and the boardroom
      discussion.  Such  control can allow a CEO to have an entrenched position,
      leading  to  longer-than-optimal  terms,  fewer checks on management, less
      scrutiny  of  the  business  operation,  and  limitations  on independent,
      shareholder-focused goal-setting by the board.

      A  CEO  should  set the strategic course for the company, with the board's
      approval,  and  the  board  should  enable  the CEO to carry out the CEO's
      vision  for  accomplishing  the board's objectives. Failure to achieve the
      board's  objectives should lead the board to replace that CEO with someone
      in whom the board has confidence.

      Likewise,  an independent chairman can better oversee executives and set a
      pro-shareholder  agenda  without  the  management conflicts that a CEO and
      other  executive  insiders  often  face.  Such  oversight  and concern for
      shareholders  allows for a more proactive and effective board of directors
      that is better able to look out for the interests of shareholders.

       Further, it is the board's responsibility to select a chief executive who
      can  best  serve a company and its shareholders and to replace this person
      when  his  or  her  duties  have  not been appropriately fulfilled. Such a
      replacement  becomes  more  difficult and happens less frequently when the
      chief executive is also in the position of overseeing the board.

                                       5
<PAGE>



We recognize that empirical evidence regarding the separation of these two roles
remains  inconclusive. However, Glass Lewis believes that the installation of an
independent  chairman  is  almost  always  a  positive  step  from  a  corporate
governance perspective and promotes the best interests of shareholders. Further,
the presence of an independent chairman fosters the creation of a thoughtful and
dynamic  board,  not dominated by the views of senior management. Encouragingly,
many  companies  appear to be moving in this direction--one study even indicates
that  less  than  12  percent of incoming CEOs in 2009 were awarded the chairman
title,  versus  48 percent as recently as 2002. Ken Favaro, Per-Ola Karlsson and
Gary   Neilson.   "CEO   Succession  2000-2009:  A  Decade  of  Convergence  and
Compression."  Booz  &  Company (from Strategy+Business, Issue 59, Summer 2010).
Another  study  finds that 40 percent of S&P 500 boards now separate the CEO and
chairman  roles,  up from 23 percent in 2000, although the same study found that
only  19  percent  of  S&P 500 chairs are independent, versus 9 percent in 2005.
Spencer Stuart Board Index, 2010, p. 4.

We  do  not  recommend  that shareholders vote against CEOs who chair the board.
However,  we  typically encourage our clients to support separating the roles of
chairman  and  CEO  whenever that question is posed in a proxy (typically in the
form  of a shareholder proposal), as we believe that it is in the long-term best
interests of the company and its shareholders.

Performance

The  most  crucial  test  of  a  board's  commitment  to  the  company  and  its
shareholders  lies  in  the actions of the board and its members. We look at the
performance  of these individuals as directors and executives of the company and
of other companies where they have served.

      Voting Recommendations on the Basis of Performance

      We   disfavor  directors  who  have  a  record  of  not  fulfilling  their
      responsibilities  to  shareholders  at  any company where they have held a
      board or executive position. We typically recommend voting against:

1.  A  director  who  fails  to  attend a minimum of 75% of board and applicable
committee  meetings,  calculated in the aggregate.


------------
(7)  Ken Favaro, Per-Ola Karlsson and Gary Neilson. "CEO Succession 2000-2009: A
Decade  of Convergence and Compression." Booz & Company (from Strategy+Business,
Issue 59, Summer 2010).

(8) Spencer Stuart Board Index, 2010, p. 4.

(9)  However,  where  a director has served for less than one full year, we will
typically  not  recommend  voting against for failure to attend 75% of meetings.
Rather,  we  will  note  the poor attendance with a recommendation to track this
issue  going  forward.  We  will  also refrain from recommending to vote against
directors  when the proxy discloses that the director missed the meetings due to
serious illness or other extenuating circumstances.

                                       6
<PAGE>

2.  A  director  who  belatedly filed a significant form(s) 4 or 5, or who has a
pattern  of late filings if the late filing was the director's fault (we look at
these late filing situations on a case-by-case basis).

3.  A  director  who  is  also the CEO of a company where a serious and material
restatement   has   occurred   after   the  CEO  had  previously  certified  the
pre-restatement financial statements.

4.  A director who has received two against recommendations from Glass Lewis for
identical  reasons  within  the  prior  year  at  different  companies (the same
situation  must  also apply at the company being analyzed). 5. All directors who
served  on the board if, for the last three years, the company's performance has
been  in  the  bottom  quartile  of  the sector and the directors have not taken
reasonable steps to address the poor performance.

      Audit Committees and Performance

Audit  committees  play  an  integral role in overseeing the financial reporting
process  because  "[v]ibrant  and  stable capital markets depend on, among other
things, reliable, transparent, and objective financial information to support an
efficient  and  effective capital market process. The vital oversight role audit
committees play in the process of producing financial information has never been
more important."

When  assessing  an  audit  committee's  performance, we are aware that an audit
committee  does  not prepare financial statements, is not responsible for making
the key judgments and assumptions that affect the financial statements, and does
not audit the numbers or the disclosures provided to investors. Rather, an audit
committee   member  monitors  and  oversees  the  process  and  procedures  that
management and auditors perform. The 1999 Report and Recommendations of the Blue
Ribbon  Committee  on  Improving the Effectiveness of Corporate Audit Committees
stated it best:

               A  proper and well-functioning system exists, therefore, when the
               three  main groups responsible for financial reporting - the full
               board   including   the  audit  committee,  financial  management
               including  the internal auditors, and the outside auditors - form
               a  'three  legged  stool'  that  supports  responsible  financial
               disclosure  and  active  participatory oversight. However, in the
               view  of  the Committee, the audit committee must be 'first among
               equals'  in  this  process,  since  the  audit  committee  is  an
               extension of the full board and hence the ultimate monitor of the
               process.

----------------
(10)  Audit  Committee Effectiveness - What Works Best." PricewaterhouseCoopers.
The Institute of Internal Auditors Research Foundation. 2005.


                                       7
<PAGE>



         Standards for Assessing the Audit Committee

For  an  audit  committee  to function effectively on investors' behalf, it must
include  members  with  sufficient  knowledge  to  diligently  carry  out  their
responsibilities.  In  its  audit and accounting recommendations, the Conference
Board  Commission  on  Public  Trust and Private Enterprise said "members of the
audit  committee  must  be independent and have both knowledge and experience in
auditing  financial matters."

We are skeptical of audit committees where there are members that lack expertise
as  a  Certified  Public  Accountant  (CPA),  Chief  Financial  Officer (CFO) or
corporate  controller  or similar experience. While we will not necessarily vote
against  members  of  an  audit committee when such expertise is lacking, we are
more  likely  to  vote  against  committee  members  when  a  problem  such as a
restatement occurs and such expertise is lacking.

Glass  Lewis generally assesses audit committees against the decisions they make
with  respect  to their oversight and monitoring role. The quality and integrity
of   the   financial  statements  and  earnings  reports,  the  completeness  of
disclosures  necessary  for  investors  to  make  informed  decisions,  and  the
effectiveness  of the internal controls should provide reasonable assurance that
the  financial  statements  are materially free from errors. The independence of
the  external  auditors  and  the  results  of  their  work  all  provide useful
information by which to assess the audit committee.

When  assessing  the  decisions and actions of the audit committee, we typically
defer  to  its  judgment  and  would  vote in favor of its members, but we would
recommend   voting   against   the   following   members   under  the  following
circumstances:

----------

(11)  Commission  on  Public Trust and Private Enterprise. The Conference Board.
2003.

(12)  Where  the  recommendation  is to vote against the committee chair but the
chair is not up for election because the board is staggered, we do not recommend
voting  against the members of the committee who are up for election; rather, we
will simply express our concern with regard to the committee chair.

                                       8
<PAGE>



1.  All  members  of the audit committee when options were backdated, there is a
lack  of  adequate  controls  in  place,  there was a resulting restatement, and
disclosures  indicate  there  was  a  lack  of documentation with respect to the
option grants.

2.  The  audit committee chair, if the audit committee does not have a financial
expert  or  the  committee's  financial  expert  does  not  have  a demonstrable
financial  background  sufficient  to  understand the financial issues unique to
public companies.

3.  The  audit  committee  chair, if the audit committee did not meet at least 4
times during the year.

4. The audit committee chair, if the committee has less than three members.

5.  Any  audit committee member who sits on more than three public company audit
committees,  unless the audit committee member is a retired CPA, CFO, controller
or  has  similar  experience,  in which case the limit shall be four committees,
taking  time and availability into consideration including a review of the audit
committee  member's  attendance at all board and committee meetings.

6.  All  members of an audit committee who are up for election and who served on
the  committee  at  the time of the audit, if audit and audit-related fees total
one-third  or  less  of  the  total  fees  billed  by  the auditor.

7.  The  audit committee chair when tax and/or other fees are greater than audit
and  audit-related  fees paid to the auditor for more than one year in a row (in
which case we also recommend against ratification of the auditor).

8.  All  members of an audit committee where non-audit fees include fees for tax
services (including, but not limited to, such things as tax avoidance or shelter
schemes)  for senior executives of the company. Such services are now prohibited
by the PCAOB.

9.  All  members  of  an  audit committee that reappointed an auditor that we no
longer  consider to be independent for reasons unrelated to fee proportions.

----------

(13)  Glass  Lewis  may  exempt  certain  audit committee members from the above
threshold  if,  upon further analysis of relevant factors such as the director's
experience,  the  size,  industry-mix and location of the companies involved and
the director's attendance at all the companies, we can reasonably determine that
the  audit  committee  member is likely not hindered by multiple audit committee
commitments.


                                       9
<PAGE>



10.  All  members  of  an  audit  committee when audit fees are excessively low,
especially when compared with other companies in the same industry.

11.   The  audit  committee  chair  if  the  committee  failed  to  put  auditor
ratification  on  the ballot for shareholder approval. However, if the non-audit
fees  or  tax fees exceed audit plus audit-related fees in either the current or
the  prior year, then Glass Lewis will recommend voting against the entire audit
committee.

12.  All  members  of  an  audit  committee  where  the auditor has resigned and
reported that a section 10A letter has been issued.

13.  All  members of an audit committee at a time when material accounting fraud
occurred  at  the  company.

14.  All  members  of  an  audit committee at a time when annual and/or multiple
quarterly  financial  statements  had  to  be restated, and any of the following
factors apply:

     o    The restatement involves fraud or manipulation by insiders;

     o    The restatement is accompanied by an SEC inquiry or investigation;

     o    The restatement involves revenue recognition;

     o    The  restatement  results  in a greater than 5% adjustment to costs of
          goods sold, operating expense, or operating cash flows; or

     o    The restatement results in a greater than 5% adjustment to net income,
          10%  adjustment  to  assets or shareholders equity, or cash flows from
          financing or investing activities.

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

(14)  In all cases, if the chair of the committee is not specified, we recommend
voting against the director who has been on the committee the longest.

(15)  Auditors  are  required to report all potential illegal acts to management
and  the  audit  committee unless they are clearly inconsequential in nature. If
the audit committee or the board fails to take appropriate action on an act that
has  been  determined  to  be a violation of the law, the independent auditor is
required  to  send  a  section  10A letter to the SEC. Such letters are rare and
therefore we believe should be taken seriously.

(16)  Recent  research indicates that revenue fraud now accounts for over 60% of
SEC  fraud cases, and that companies that engage in fraud experience significant
negative  abnormal  stock  price  declines--facing  bankruptcy,  delisting,  and
material  asset sales at much higher rates than do non-fraud firms (Committee of
Sponsoring  Organizations  of  the  Treadway  Commission.  "Fraudulent Financial
Reporting: 1998-2007." May 2010).


                                       10
<PAGE>





15.  All  members  of an audit committee if the company repeatedly fails to file
its  financial  reports  in a timely fashion. For example, the company has filed
two  or  more  quarterly  or  annual financial statements late within the last 5
quarters.

16.  All  members  of  an  audit committee when it has been disclosed that a law
enforcement agency has charged the company and/or its employees with a violation
of the Foreign Corrupt Practices Act (FCPA).

17. All members of an audit committee when the company has aggressive accounting
policies  and/or  poor  disclosure  or  lack  of  sufficient transparency in its
financial statements.

18.  All  members  of  the audit committee when there is a disagreement with the
auditor and the auditor resigns or is dismissed.

19.  All  members  of  the  audit  committee  if  the  contract with the auditor
specifically  limits  the  auditor's  liability  to the company for damages.

20.  All  members  of  the  audit  committee  who  served  since the date of the
company's  last  annual  meeting,  and  when, since the last annual meeting, the
company  has  reported  a material weakness that has not yet been corrected, or,
when the company has an ongoing material weakness from a prior year that has not
yet been corrected.

We  also  take  a  dim view of audit committee reports that are boilerplate, and
which  provide  little  or  no  information or transparency to investors. When a
problem such as a material weakness, restatement or late filings occurs, we take
into consideration, in forming our judgment with respect to the audit committee,
the transparency of the audit committee report.

         Compensation Committee Performance

Compensation  committees  have  the final say in determining the compensation of
executives.   This   includes  deciding  the  basis  on  which  compensation  is
determined,  as  well  as the amounts and types of compensation to be paid. This
process   begins  with  the  hiring  and  initial  establishment  of  employment
agreements,  including  the  terms for such items as pay, pensions and severance
arrangements.  It  is  important  in establishing compensation arrangements that
compensation be consistent with, and based on the long-term economic performance
of, the business's long-term shareholders returns.

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

(17) The Council of Institutional Investors. "Corporate Governance Policies," p.
4,  April  5,  2006;  and "Letter from Council of Institutional Investors to the
AICPA," November 8, 2006.


                                       11
<PAGE>



Compensation   committees   are  also  responsible  for  the  oversight  of  the
transparency of compensation. This oversight includes disclosure of compensation
arrangements,  the  matrix used in assessing pay for performance, and the use of
compensation   consultants.   In   order  to  ensure  the  independence  of  the
compensation  consultant,  we  believe  the  compensation  committee should only
engage  a compensation consultant that is not also providing any services to the
company or management apart from their contract with the compensation committee.
It is important to investors that they have clear and complete disclosure of all
the  significant  terms  of  compensation arrangements in order to make informed
decisions  with  respect  to  the  oversight  and  decisions of the compensation
committee.

Finally,  compensation  committees  are  responsible  for  oversight of internal
controls  over  the  executive compensation process. This includes controls over
gathering  information  used  to determine compensation, establishment of equity
award  plans,  and  granting  of  equity  awards.  Lax  controls  can  and  have
contributed  to  conflicting information being obtained, for example through the
use  of  nonobjective  consultants. Lax controls can also contribute to improper
awards  of  compensation  such as through granting of backdated or spring-loaded
options,  or  granting of bonuses when triggers for bonus payments have not been
met.

Central  to  understanding  the actions of a compensation committee is a careful
review  of  the  Compensation  Discussion and Analysis (CD&A) report included in
each  company's  proxy.  We  review  the  CD&A  in our evaluation of the overall
compensation  practices of a company, as overseen by the compensation committee.
The  CD&A  is  also  integral  to  the  evaluation  of compensation proposals at
companies,  such  as  advisory  votes  on  executive  compensation,  which allow
shareholders to vote on the compensation paid to a company's top executives.

       In  our  evaluation  of  the  CD&A,  we examine, among other factors, the
following:

           1. The extent to which the company uses appropriate performance goals
           and metrics in determining overall compensation as an indication that
           pay is tied to performance.

           2. How clearly the company discloses performance metrics and goals so
           that  shareholders  may  make an independent determination that goals
           were met.


                                       12
<PAGE>



           3. The extent to which the performance metrics, targets and goals are
           implemented  to  enhance  company  performance  and encourage prudent
           risk-taking.

           4.  The  selected  peer  group(s)  so  that  shareholders  can make a
           comparison of pay and performance across the appropriate peer group.

           5.  The extent to which the company benchmarks compensation levels at
           a  specific percentile of its peer group along with the rationale for
           selecting such a benchmark.

           6.  The  amount  of discretion granted management or the compensation
           committee  to  deviate  from defined performance metrics and goals in
           making  awards,  as  well  as  the appropriateness of the use of such
           discretion.

We  provide  an  overall  evaluation  of  the quality and content of a company's
executive  compensation policies and procedures as disclosed in a CD&A as either
good, fair or poor.

We  evaluate  compensation  committee  members on the basis of their performance
while  serving  on the compensation committee in question, not for actions taken
solely  by  prior  committee  members  who  are  not  currently  serving  on the
committee.  At  companies  that  provide  shareholders with non-binding advisory
votes  on  executive  compensation  ("Say-on-Pay"),  we  will use the Say-on-Pay
proposal  as  the  initial,  primary  means  to express dissatisfaction with the
company's  compensation  polices  and  practices rather than recommending voting
against  members  of  the  compensation  committee (except in the most egregious
cases).

When  assessing  the  performance  of compensation committees, we will recommend
voting  against  for  the following:

     1.  All  members  of the compensation committee who are up for election and
     served at the time of poor pay-for-performance (e.g., a company receives an
     F  grade  in  our  pay-for-performance  analysis) when shareholders are not
     provided  with  an  advisory  vote  on executive compensation at the annual
     meeting.

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

(18)  Where  the  recommendation  is to vote against the committee chair and the
chair is not up for election because the board is staggered, we do not recommend
voting  against any members of the committee who are up for election; rather, we
will simply express our concern with regard to the committee chair.

(19)  Where  there  are  multiple  CEOs  in  one  year,  we  will  consider  not
recommending  against  the  compensation  committee  but  will defer judgment on
compensation  policies  and  practices  until the next year or a full year after
arrival  of  the new CEO. In addition, if a company provides shareholders with a
Say-on-Pay proposal and receives an F grade in our pay-for-performance model, we
will  recommend  that  shareholders  only  vote  against the Say-on-Pay proposal
rather  than  the  members  of  the  compensation  committee, unless the company
exhibits  egregious  practices.  However,  if  the company receives successive F
grades, we will then recommend against the members of the compensation committee
in addition to recommending voting against the Say-on-Pay proposal.

                                       13
<PAGE>



2.  Any  member of the compensation committee who has served on the compensation
committee  of  at least two other public companies that received F grades in our
pay-for-performance model and who is also suspect at the company in question.

3.  The  compensation  committee  chair  if the company received two D grades in
consecutive  years  in  our pay-for-performance analysis, and if during the past
year  the  Company performed the same as or worse than its peers.

4.  All  members of the compensation committee (during the relevant time period)
if  the  company  entered  into excessive employment agreements and/or severance
agreements.  5. All members of the compensation committee when performance goals
were  changed  (i.e.,  lowered)  when  employees failed or were unlikely to meet
original  goals,  or  performance-based  compensation was paid despite goals not
being  attained.  6.  All  members  of  the  compensation committee if excessive
employee perquisites and benefits were allowed.

7.  The  compensation committee chair if the compensation committee did not meet
during  the  year,  but  should  have  (e.g., because executive compensation was
restructured  or  a new executive was hired).

8.  All  members of the compensation committee when the company repriced options
or  completed a "self tender offer" without shareholder approval within the past
two years.

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

(20)  In cases where the company received two D grades in consecutive years, but
during  the  past  year  the company performed better than its peers or improved
from  an  F  to  a  D grade year over year, we refrain from recommending to vote
against  the compensation chair. In addition, if a company provides shareholders
with a Say-on-Pay proposal in this instance, we will consider voting against the
advisory  vote  rather  than the compensation committee chair unless the company
exhibits unquestionably egregious practices.

                                       14
<PAGE>



9.  All  members  of  the  compensation  committee  when vesting of in-the-money
options is accelerated or when fully vested options are granted.

10.  All  members of the compensation committee when option exercise prices were
backdated.  Glass  Lewis will recommend voting against an executive director who
played a role in and participated in option backdating.

11.  All  members of the compensation committee when option exercise prices were
spring-loaded or otherwise timed around the release of material information.

12.  All members of the compensation committee when a new employment contract is
given to an executive that does not include a clawback provision and the company
had a material restatement, especially if the restatement was due to fraud.

13. The chair of the compensation committee where the CD&A provides insufficient
or  unclear  information  about  performance  metrics  and goals, where the CD&A
indicates  that  pay  is  not  tied  to  performance,  or where the compensation
committee  or  management has excessive discretion to alter performance terms or
increase amounts of awards in contravention of previously defined targets.

14.  All members of the compensation committee during whose tenure the committee
failed  to  implement  a  shareholder  proposal regarding a compensation-related
issue,  where  the  proposal  received the affirmative vote of a majority of the
voting  shares at a shareholder meeting, and when a reasonable analysis suggests
that  the  compensation  committee (rather than the governance committee) should
have  taken  steps  to  implement  the  request.

         Nominating and Governance Committee Performance

      The   nominating   and   governance   committee,  as  an  agency  for  the
      shareholders,  is  responsible  for  the  governance  by  the board of the
      company  and  its  executives.  In  performing  this  role,  the  board is
      responsible and accountable for selection of objective and competent board
      members.  It  is  also  responsible for providing leadership on governance
      policies   adopted   by  the  company,  such  as  decisions  to  implement
      shareholder proposals that have received a majority vote.

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

(21)  In  all  other  instances  (i.e.  a  non-compensation-related  shareholder
proposal  should  have  been  implemented)  we  recommend that shareholders vote
against the members of the governance committee.


                                       15
<PAGE>



Consistent  with  Glass  Lewis'  philosophy  that  boards  should  have  diverse
backgrounds  and  members  with  a  breadth and depth of relevant experience, we
believe that nominating and governance committees should consider diversity when
making  director nominations within the context of each specific company and its
industry.  In  our view, shareholders are best served when boards make an effort
to  ensure  a  constituency  that is not only reasonably diverse on the basis of
age,  race, gender and ethnicity, but also on the basis of geographic knowledge,
industry experience and culture.

Regarding  the  nominating and or governance committee, we will recommend voting
against  the  following:

1.  All members of the governance committee during whose tenure the board failed
to  implement  a  shareholder  proposal  with a direct and substantial impact on
shareholders  and  their  rights  -  i.e.,  where  the  proposal received enough
shareholder votes (at least a majority) to allow the board to implement or begin
to implement that proposal. Examples of these types of shareholder proposals are
majority vote to elect directors and to declassify the board.

2.  The  governance committee chair, when the chairman is not independent and an
independent lead or presiding director has not been appointed.



-----------

(22)  Where we would recommend to vote against the committee chair but the chair
is  not  up  for  election  because  the board is staggered, we do not recommend
voting  against any members of the committee who are up for election; rather, we
will simply express our concern regarding the committee chair.

(23)  If  the  board  does  not have a governance committee (or a committee that
serves  such  a  purpose),  we recommend voting against the entire board on this
basis.

(24)   Where  a  compensation-related  shareholder  proposal  should  have  been
implemented,  and  when  a  reasonable analysis suggests that the members of the
compensation   committee   (rather  than  the  governance  committee)  bear  the
responsibility   for  failing  to  implement  the  request,  we  recommend  that
shareholders only vote against members of the compensation committee.

(25) If the committee chair is not specified, we
recommend voting against the director who has been on the committee the longest.
If  the longest-serving committee member cannot be determined, we will recommend
voting  against  the longest-serving board member serving on the committee.

(26)  We believe that one independent individual should be appointed to serve as
the lead or presiding director.

                                       16
<PAGE>


When such a position is rotated among directors from meeting to meeting, we will
recommend voting against as if there were no lead or presiding director. We note
that  each  of the Business Roundtable, The Conference Board, and the Council of
Institutional Investors advocates that two-thirds of the board be independent.

3. In the absence of a nominating committee, the governance committee chair when
there  are  less than five or the whole nominating committee when there are more
than  20  members  on  the  board.

4.  The  governance  committee  chair,  when  the committee fails to meet at all
during the year.

5.  The  governance  committee chair, when for two consecutive years the company
provides   what  we  consider  to  be  "inadequate"  related  party  transaction
disclosure  (i.e.  the  nature  of such transactions and/or the monetary amounts
involved  are  unclear  or  excessively  vague,  thereby  preventing  an average
shareholder  from  being able to reasonably interpret the independence status of
multiple directors above and beyond what the company maintains is compliant with
SEC or applicable stock-exchange listing requirements).

Regarding  the  nominating  committee,  we  will  recommend  voting  against the
following:

1.  All  members  of  the  nominating committee, when the committee nominated or
renominated  an  individual  who had a significant conflict of interest or whose
past  actions  demonstrated  a  lack  of  integrity  or  inability  to represent
shareholder interests.

2.  The  nominating  committee  chair,  if the nominating committee did not meet
during  the year, but should have (i.e., because new directors were nominated or
appointed since the time of the last annual meeting).

3. In the absence of a governance committee, the nominating committee chair when
the  chairman  is not independent, and an independent lead or presiding director
has  not  been  appointed.

-----------

(27)  Where we would recommend to vote against the committee chair but the chair
is  not  up  for  election  because  the board is staggered, we do not recommend
voting  against any members of the committee who are up for election; rather, we
will simply express our concern regarding the committee chair.

(28)  If  the committee chair is not specified, we will recommend voting against
the  director  who has been on the committee the longest. If the longest-serving
committee  member  cannot  be  determined,  we will recommend voting against the
longest-serving board member on the committee.

(29)  In  the  absence  of both a governance and a nominating committee, we will
recommend voting against the chairman of the board on this basis.

                                       17
<PAGE>



4.  The  nominating  committee chair, when there are less than five or the whole
nominating  committee  when  there are more than 20 members on the board.

5.  The  nominating committee chair, when a director received a greater than 50%
against  vote  the prior year and not only was the director not removed, but the
issues  that  raised  shareholder  concern  were not corrected.

Board-level Risk Management Oversight

Glass  Lewis evaluates the risk management function of a public company board on
a  strictly  case-by-case  basis.  Sound risk management, while necessary at all
companies,  is  particularly  important  at  financial  firms  which  inherently
maintain significant exposure to financial risk. We believe such financial firms
should have a chief risk officer reporting directly to the board and a dedicated
risk  committee  or  a  committee  of  the  board  charged  with risk oversight.
Moreover,  many  non-financial  firms  maintain  strategies which involve a high
level  of  exposure  to financial risk. Similarly, since many non-financial firm
have   significant  hedging  or  trading  strategies,  including  financial  and
non-financial derivatives, those firms should also have a chief risk officer and
a risk committee.

Our  views  on  risk  oversight  are  consistent with those expressed by various
regulatory  bodies.  In its December 2009 Final Rule release on Proxy Disclosure
Enhancements, the SEC noted that risk oversight is a key competence of the board
and   that   additional  disclosures  would  improve  investor  and  shareholder
understanding  of  the  role  of the board in the organization's risk management
practices.  The  final  rules,  which became effective on February 28, 2010, now
explicitly  require  companies  and mutual funds to describe (while allowing for
some degree of flexibility) the board's role in the oversight of risk.

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

(30)  In  the  absence  of both a governance and a nominating committee, we will
recommend voting against the chairman of the board on this basis.

(31) Considering that shareholder discontent clearly relates to the director who
received  a  greater  than 50% against vote rather than the nominating chair, we
review  the  validity of the issue(s) that initially raised shareholder concern,
follow-up  on  such  matters,  and  only recommend voting against the nominating
chair  if  a  reasonable analysis suggests that it would be most appropriate. In
rare  cases,  we  will consider recommending against the nominating chair when a
director  receives  a  substantial (i.e., 25% or more) vote against based on the
same analysis.


                                       18
<PAGE>



When  analyzing  the risk management practices of public companies, we take note
of  any  significant  losses or writedowns on financial assets and/or structured
transactions.  In  cases  where  a  company  has  disclosed  a  sizable  loss or
writedown,  and  where  we  find  that  the company's board-level risk committee
contributed  to  the  loss  through  poor  oversight,  we  would  recommend that
shareholders  vote against such committee members on that basis. In addition, in
cases  where  a company maintains a significant level of financial risk exposure
but fails to disclose any explicit form of board-level risk oversight (committee
or  otherwise), we will consider recommending to vote against
the  chairman  of  the  board  on  that  basis.  However, we generally would not
recommend  voting  against  a  combined  chairman/CEO except in egregious cases.

Experience

We find that a director's past conduct is often indicative of future conduct and
performance.  We often find directors with a history of overpaying executives or
of  serving  on  boards  where  avoidable  disasters  have occurred appearing at
companies  that  follow  these  same  patterns.  Glass  Lewis  has a proprietary
database  of every officer and director serving at 8,000 of the most widely held
U.S.  companies.  We  use  this  database  to track the performance of directors
across companies.

Voting Recommendations on the Basis of Director Experience

We  typically recommend that shareholders vote against directors who have served
on  boards  or  as  executives  of  companies  with records of poor performance,
inadequate   risk  oversight,  overcompensation,  audit-  or  accounting-related
issues,  and/or  other  indicators  of  mismanagement  or  actions  against  the
interests  of  shareholders.

----------

(32)  A  committee  responsible  for  risk  management could be a dedicated risk
committee,   or  another  board  committee,  usually  the  audit  committee  but
occasionally  the  finance  committee,  depending  on  a  given  company's board
structure  and  method  of  disclosure.  At  some companies, the entire board is
charged with risk management.

(33)  We typically apply a three-year look-back to such issues and also research
to  see  whether  the  responsible directors have been up for election since the
time  of  the failure, and if so, we take into account the percentage of support
they received from shareholders.


                                       19
<PAGE>


Likewise,  we examine the backgrounds of those who serve on key board committees
to  ensure  that  they  have the required skills and diverse backgrounds to make
informed  judgments  about  the  subject  matter  for  which  the  committee  is
responsible.

Other Considerations

In  addition  to  the  three  key  characteristics  - independence, performance,
experience   -   that   we   use   to   evaluate   board  members,  we  consider
conflict-of-interest issues in making voting recommendations.

         Conflicts of Interest

We  believe  board members should be wholly free of identifiable and substantial
conflicts  of interest, regardless of the overall level of independent directors
on  the  board.  Accordingly,  we  recommend  that shareholders vote against the
following types of affiliated or inside directors:

1.  A  CFO  who  is  on  the board: In our view, the CFO holds a unique position
relative  to  financial reporting and disclosure to shareholders. Because of the
critical  importance  of  financial disclosure and reporting, we believe the CFO
should report to the board and not be a member of it.

2.  A  director  who  is  on  an  excessive  number of boards: We will typically
recommend  voting  against  a director who serves as an executive officer of any
public  company  while  serving on more than two other public company boards and
any  other  director who serves on more than six public company boards typically
receives  an  against  recommendation  from  Glass  Lewis.  Academic  literature
suggests  that  one  board  takes  up  approximately  200 hours per year of each
member's  time.  We  believe this limits the number of boards on which directors
can  effectively serve, especially executives at other companies.

-----------

(34)  Our  guidelines  are similar to the standards set forth by the NACD in its
"Report  of  the  NACD Blue Ribbon Commission on Director Professionalism," 2001
Edition,  pp.  14-15  (also  cited  approvingly  by  the Conference Board in its
"Corporate Governance Best Practices: A Blueprint for the Post-Enron Era," 2002,
p.  17),  which  suggested  that CEOs should not serve on more than 2 additional
boards,  persons  with full-time work should not serve on more than 4 additional
boards, and others should not serve on more than six boards.


                                       20
<PAGE>



Further,  we  note  a  recent study has shown that the average number of outside
board  seats held by CEOs of S&P 500 companies is 0.6, down from 0.9 in 2005 and
1.4 in 2000.

3.  A  director,  or  a  director  who has an immediate family member, providing
consulting  or  other  material  professional  services  to  the  company: These
services  may  include legal, consulting, or financial services. We question the
need  for  the  company  to have consulting relationships with its directors. We
view  such  relationships as creating conflicts for directors, since they may be
forced  to  weigh  their own interests against shareholder interests when making
board  decisions. In addition, a company's decisions regarding where to turn for
the  best  professional services may be compromised when doing business with the
professional  services firm of one of the company's directors.

4.  A  director,  or  a director who has an immediate family member, engaging in
airplane,  real  estate, or similar deals, including perquisite-type grants from
the  company,  amounting to more than $50,000: Directors who receive these sorts
of  payments  from  the  company  will  have  to  make unnecessarily complicated
decisions that may pit their interests against shareholder interests.

5.  Interlocking  directorships:  CEOs or other top executives who serve on each
other's  boards  create an interlock that poses conflicts that should be avoided
to ensure the promotion of shareholder interests above all else.

6. All board members who served at a time when a poison pill was adopted without
shareholder  approval  within  the  prior  twelve  months.  Size of the Board of
Directors


While we do not believe there is a universally applicable optimum board size, we
do  believe  boards  should  have  at  least five directors to ensure sufficient
diversity in decision-making and to enable the formation of key board committees
with independent directors. Conversely, we believe that boards with more than 20
members  will  typically  suffer  under  the  weight  of  "too many cooks in the
kitchen"  and  have  difficulty  reaching consensus and making timely decisions.
Sometimes  the  presence of too many voices can make it difficult to draw on the
wisdom  and experience in the room by virtue of the need to limit the discussion
so that each voice may be heard.



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

(35) Spencer Stuart Board Index, 2010, p. 8.

(36) We do not apply a look-back period for this situation. The interlock policy
applies  to  both  public  and private companies. We will also evaluate multiple
board interlocks among non-insiders (i.e. multiple directors serving on the same
boards at other companies), for evidence of a pattern of poor oversight.


                                       21
<PAGE>




To  that  end,  we  typically  recommend  voting  against  the  chairman  of the
nominating  committee  at  a  board  with fewer than five directors. With boards
consisting  of more than 20 directors, we typically recommend voting against all
members of the nominating committee (or the governance committee, in the absence
of  a  nominating  committee).

Controlled Companies

Controlled  companies  present an exception to our independence recommendations.
The  board's  function  is  to  protect  shareholder interests; however, when an
individual  or  entity owns more than 50% of the voting shares, the interests of
the  majority  of  shareholders  are the interests of that entity or individual.
Consequently,  Glass Lewis does not apply our usual two-thirds independence rule
and  therefore  we  will  not  recommend voting against boards whose composition
reflects the makeup of the shareholder population.

         Independence Exceptions

      The  independence  exceptions that we make for controlled companies are as
follows:

1.  We  do  not  require that controlled companies have boards that are at least
two-thirds  independent. So long as the insiders and/or affiliates are connected
with  the  controlling  entity,  we accept the presence of non-independent board
members.

2.  The  compensation  committee and nominating and governance committees do not
need to consist solely of independent directors.

               a.  We  believe that standing nominating and corporate governance
               committees  at  controlled  companies  are  unnecessary. Although
               having  a  committee  charged  with  the duties of searching for,
               selecting,   and   nominating   independent   directors   can  be
               beneficial,  the  unique  composition  of  a controlled company's
               shareholder base makes such committees weak and irrelevant.


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

(37)  The  Conference  Board,  at p. 23 in its report "Corporate Governance Best
Practices,  Id.,"  quotes one of its roundtable participants as stating, "[w]hen
you've  got  a  20  or  30 person corporate board, it's one way of assuring that
nothing is ever going to happen that the CEO doesn't want to happen."


                                       22
<PAGE>



               b.  Likewise, we believe that independent compensation committees
               at  controlled  companies  are  unnecessary. Although independent
               directors are the best choice for approving and monitoring senior
               executives'  pay, controlled companies serve a unique shareholder
               population  whose  voting  power  ensures  the  protection of its
               interests.  As  such, we believe that having affiliated directors
               on  a  controlled company's compensation committee is acceptable.
               However,  given that a controlled company has certain obligations
               to minority shareholders we feel that an insider should not serve
               on  the  compensation  committee.  Therefore,  Glass  Lewis  will
               recommend  voting  against  any  insider  (the  CEO or otherwise)
               serving on the compensation committee.

3.  Controlled  companies  do not need an independent chairman or an independent
lead  or  presiding  director. Although an independent director in a position of
authority on the board - such as chairman or presiding director - can best carry
out  the  board's  duties,  controlled  companies  serve  a  unique  shareholder
population whose voting power ensures the protection of its interests.

4.  Where an individual or entity owns more than 50% of a company's voting power
but  the  company  is  not a "controlled" company as defined by relevant listing
standards,  we apply a lower independence requirement of a majority of the board
but  keep all other standards in place. Similarly, where an individual or entity
holds  between  20-50%  of  a  company's  voting  power,  but the company is not
"controlled" and there is not a "majority" owner, we will allow for proportional
representation on the board and committees (excluding the audit committee) based
on the individual or entity's percentage of ownership.

         Size of the Board of Directors

      We have no board size requirements for controlled companies.

         Audit Committee Independence

      We  believe  that  audit  committees  should consist solely of independent
      directors.  Regardless  of a company's controlled status, the interests of
      all  shareholders must be protected by ensuring the integrity and accuracy
      of  the  company's  financial statements. Allowing affiliated directors to
      oversee   the   preparation   of   financial   reports   could  create  an
      insurmountable conflict of interest.


                                       23
<PAGE>



Exceptions for Recent IPOs

We  believe  companies  that  have recently completed an initial public offering
("IPO") should be allowed adequate time to fully comply with marketplace listing
requirements as well as to meet basic corporate governance standards. We believe
a  one-year  grace  period  immediately following the date of a company's IPO is
sufficient  time  for  most  companies  to  comply  with all relevant regulatory
requirements  and  to  meet  such  corporate  governance  standards.  Except  in
egregious cases, Glass Lewis refrains from issuing voting recommendations on the
basis  of corporate governance best practices (eg. board independence, committee
membership  and  structure, meeting attendance, etc.) during the one-year period
following an IPO.

However,  in  cases  where a board implements a poison pill preceding an IPO, we
will  consider  voting  against  the  members of the board who served during the
period  of  the  poison  pill's adoption if the board (i) did not also commit to
submit the poison pill to a shareholder vote within 12 months of the IPO or (ii)
did  not  provide  a sound rationale for adopting the pill and the pill does not
expire  in  three  years  or  less.  In our view, adopting such an anti-takeover
device unfairly penalizes future shareholders who (except for electing to buy or
sell  the  stock)  are  unable  to  weigh  in on a matter that could potentially
negatively  impact  their ownership interest. This notion is strengthened when a
board  adopts  a poison pill with a 5-10 year life immediately prior to having a
public shareholder base so as to insulate management for a substantial amount of
time  while  postponing and/or avoiding allowing public shareholders the ability
to vote on the pill's adoption. Such instances are indicative of boards that may
subvert shareholders' best interests following their IPO.

Mutual Fund Boards

Mutual  funds,  or investment companies, are structured differently from regular
public  companies  (i.e.,  operating  companies). Typically, members of a fund's
adviser  are  on the board and management takes on a different role from that of
regular  public  companies.  Thus,  we  focus  on  a short list of requirements,
although many of our guidelines remain the same.

The  following  mutual  fund  policies  are  similar to the policies for regular
public companies:

      1.  Size of the board of directors: The board should be made up of between
      five and twenty directors.

      2.  The  CFO  on the board: Neither the CFO of the fund nor the CFO of the
      fund's registered investment adviser should serve on the board.

      3. Independence of the audit committee: The audit committee should consist
      solely of independent directors.


                                       24
<PAGE>



      4.  Audit  committee  financial  expert:  At least one member of the audit
      committee should be designated as the audit committee financial expert.

The following differences from regular public companies apply at mutual funds:

      1.  Independence  of  the  board:  We  believe  that  three-fourths  of an
      investment  company's  board  should  be made up of independent directors.
      This  is consistent with a proposed SEC rule on investment company boards.
      The  Investment  Company  Act requires 40% of the board to be independent,
      but  in  2001,  the  SEC  amended  the  Exemptive  Rules to require that a
      majority  of a mutual fund board be independent. In 2005, the SEC proposed
      increasing  the  independence threshold to 75%. In 2006, a federal appeals
      court ordered that this rule amendment be put back out for public comment,
      putting it back into "proposed rule" status. Since mutual fund boards play
      a  vital  role  in  overseeing  the  relationship between the fund and its
      investment  manager,  there is greater need for independent oversight than
      there is for an operating company board.

      2. When the auditor is not up for ratification: We do not recommend voting
      against  the  audit  committee  if  the auditor is not up for ratification
      because,  due  to  the  different legal structure of an investment company
      compared  to  an operating company, the auditor for the investment company
      (i.e.,  mutual  fund)  does not conduct the same level of financial review
      for each investment company as for an operating company.

      3. Non-independent chairman: The SEC has proposed that the chairman of the
      fund  board  be  independent.  We  agree that the roles of a mutual fund's
      chairman  and  CEO  should  be separate. Although we believe this would be
      best  at  all  companies,  we  recommend voting against the chairman of an
      investment  company's  nominating committee as well as the chairman of the
      board if the chairman and CEO of a mutual fund are the same person and the
      fund does not have an independent lead or presiding director. Seven former
      SEC  commissioners  support the appointment of an independent chairman and
      we  agree  with  them  that "an independent board chairman would be better
      able  to  create  conditions  favoring  the  long-term  interests  of fund
      shareholders  than  would  a chairman who is an executive of the adviser."
      (See the comment letter sent to the SEC in support of the proposed rule at
      http://sec.gov/rules/proposed/s70304/s70304-179.pdf)

DECLASSIFIED BOARDS

Glass  Lewis  favors  the  repeal of staggered boards and the annual election of
directors. We believe staggered boards are less accountable to shareholders than
boards  that  are  elected annually. Furthermore, we feel the annual election of
directors encourages board members to focus on shareholder interests.

                                       25
<PAGE>



Empirical  studies  have  shown:  (i)  companies  with staggered boards reduce a
firm's  value;  and  (ii)  in the context of hostile takeovers, staggered boards
operate   as  a  takeover  defense,  which  entrenches  management,  discourages
potential acquirers, and delivers a lower return to target shareholders.

In  our  view, there is no evidence to demonstrate that staggered boards improve
shareholder  returns in a takeover context. Research shows that shareholders are
worse  off  when  a  staggered board blocks a transaction. A study by a group of
Harvard Law professors concluded that companies whose staggered boards prevented
a takeover "reduced shareholder returns for targets ... on the order of eight to
ten  percent  in  the  nine  months  after  a hostile bid was announced." When a
staggered  board negotiates a friendly transaction, no statistically significant
difference  in premiums occurs. Further, one of those same professors found that
charter-based staggered boards "reduce the market value of a firm by 4% to 6% of
its market capitalization" and that "staggered boards bring about and not merely
reflect  this  reduction  in  market  value." A subsequent study reaffirmed that
classified boards reduce shareholder value, finding "that the ongoing process of
dismantling  staggered boards, encouraged by institutional investors, could well
contribute to increasing shareholder wealth."

Shareholders   have   increasingly  come  to  agree  with  this  view.  In  2010
approximately  72%  of  S&P  500  companies  had  declassified  boards,  up from
approximately 51% in 2005.

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

(38)   Lucian   Bebchuk,  John  Coates  IV,  Guhan  Subramanian,  "The  Powerful
Antitakeover  Force  of  Staggered  Boards:  Further  Findings  and  a  Reply to
Symposium Participants," 55 Stanford Law Review 885-917 (2002), page 1.

(39) Id. at 2 ("Examining a sample of seventy-three negotiated transactions from
2000 to 2002, we find no systematic benefits in terms of higher premia to boards
that have [staggered structures].").

(40) Lucian Bebchuk, Alma Cohen, "The Costs of Entrenched Boards" (2004).

(41) Lucian Bebchuk, Alma Cohen and Charles C.Y. Wang, "Staggered Boards and the
Wealth   of   Shareholders:   Evidence   from   a   Natural  Experiment,"  SSRN:
http://ssrn.com/abstract=1706806 (2010), p. 26.

(42) Spencer Stuart Board Index, 2010, p. 14



                                       26
<PAGE>



Clearly,  more  shareholders  have  supported  the  repeal of classified boards.
Resolutions  relating to the repeal of staggered boards garnered on average over
70%  support  among  shareholders  in 2008, whereas in 1987, only 16.4% of votes
cast favored board declassification.

Given  the  empirical  evidence  suggesting  staggered boards reduce a company's
value and the increasing shareholder opposition to such a structure, Glass Lewis
supports the declassification of boards and the annual election of directors.

MANDATORY DIRECTOR RETIREMENT PROVISIONS

Director Term and Age Limits

Glass  Lewis  believes  that  director  age and term limits typically are not in
shareholders'  best  interests. Too often age and term limits are used by boards
as  a  crutch  to remove board members who have served for an extended period of
time.  When  used  in  that  fashion,  they are indicative of a board that has a
difficult time making "tough decisions."

Academic  literature suggests that there is no evidence of a correlation between
either  length  of  tenure  or  age  and director performance. On occasion, term
limits can be used as a means to remove a director for boards that are unwilling
to  police  their  membership and to enforce turnover. Some shareholders support
term limits as a way to force change when boards are unwilling to do so.

While  we  understand  that age limits can be a way to force change where boards
are  unwilling  to make changes on their own, the long-term impact of age limits
restricts  experienced  and  potentially  valuable  board  members  from service
through  an  arbitrary means. Further, age limits unfairly imply that older (or,
in rare cases, younger) directors cannot contribute to company oversight.

In  our  view,  a  director's experience can be a valuable asset to shareholders
because  of  the  complex, critical issues that boards face. However, we support
periodic  director  rotation  to ensure a fresh perspective in the boardroom and
the generation of new ideas and business strategies. We believe the board should
implement  such rotation instead of relying on arbitrary limits. When necessary,
shareholders  can  address  the  issue  of  director  rotation  through director
elections.

We  believe  that shareholders are better off monitoring the board's approach to
corporate  governance  and the board's stewardship of company performance rather
than  imposing inflexible rules that don't necessarily correlate with returns or
benefits for shareholders.

-----------

(43)  Lucian  Bebchuk,  John  Coates  IV  and  Guhan  Subramanian, "The Powerful
Antitakeover  Force  of  Staggered  Boards:  Theory,  Evidence,  and Policy," 54
Stanford Law Review 887-951 (2002).


                                       27
<PAGE>




However,  if  a  board  adopts term/age limits, it should follow through and not
waive  such  limits.  If  the board waives its term/age limits, Glass Lewis will
consider recommending shareholders vote against the nominating and/or governance
committees,  unless  the  rule  was  waived with sufficient explanation, such as
consummation of a corporate transaction like a merger.

REQUIRING TWO OR MORE NOMINEES PER BOARD SEAT

In  an  attempt  to address lack of access to the ballot, shareholders sometimes
propose  that  the  board  give shareholders a choice of directors for each open
board  seat  in  every  election.  However,  we  feel  that policies requiring a
selection  of multiple nominees for each board seat would discourage prospective
directors  from  accepting  nominations.  A  prospective  director  could not be
confident  either  that  he or she is the board's clear choice or that he or she
would  be  elected.  Therefore,  Glass  Lewis  generally  will vote against such
proposals.

SHAREHOLDER ACCESS

Shareholders  have  continuously  sought  a  way  to have a significant voice in
director elections in recent years. While most of these efforts have centered on
regulatory  change  at  the  SEC,  Congress  and  the  Obama Administration have
successfully  placed  "Proxy  Access"  in the spotlight of the U.S. Government's
most recent corporate-governance-related financial reforms.

In  July 2010, President Obama signed into law the Dodd-Frank Wall Street Reform
and  Consumer Protection Act (the "Dodd-Frank Act"). The Dodd-Frank Act provides
the  SEC with the authority to adopt rules permitting shareholders to use issuer
proxy  solicitation  materials to nominate director candidates. The SEC received
over  500  comments  regarding  its  proposed  proxy  access rule, some of which
questioned  the  agency's authority to adopt such a rule. Nonetheless, in August
2010 the SEC adopted final Rule 14a-11, which under certain circumstances, gives
shareholders  (and shareholder groups) who have collectively held at least 3% of
the  voting  power  of  a  company's  securities continuously for at least three
years,  the  right  to  nominate  up to 25% of a boards' directors and have such
nominees  included on the company's ballot and described (in up to 500 words per
nominee) in its proxy statement.

While  final Rule 14a-11 was originally scheduled to take effect on November 15,
2010,  on  October  4,  2010,  the  SEC announced that it would delay the rule's
implementation following the filing of a lawsuit by the U.S. Chamber of Commerce
and  the  Business Roundtable on September 29, 2010. As a result, it is unlikely
shareholders  will  have  the opportunity to vote on access proposals during the
2011 proxy season.


                                       28
<PAGE>



MAJORITY VOTE FOR THE ELECTION OF DIRECTORS

In  stark  contrast  to  the  failure  of shareholder access to gain acceptance,
majority  voting  for  the  election  of directors is fast becoming the de facto
standard  in  corporate  board  elections.  In  our  view,  the  majority voting
proposals  are  an  effort  to  make the case for shareholder impact on director
elections on a company-specific basis.

While  this  proposal  would  not  give shareholders the opportunity to nominate
directors  or  lead to elections where shareholders have a choice among director
candidates,  if  implemented,  the  proposal  would allow shareholders to have a
voice  in determining whether the nominees proposed by the board should actually
serve  as  the  overseer-representatives  of  shareholders  in the boardroom. We
believe this would be a favorable outcome for shareholders.

During  2010,  Glass Lewis tracked just under 35 proposals to require a majority
vote to elect directors at annual meetings in the U.S., a slight decline from 46
proposals  in  2009,  but  a  sharp contrast to the 147 proposals tracked during
2006.  The  general  decline  in  the  number of proposals being submitted was a
result  of  many  companies  adopting  some  form  of majority voting, including
approximately  71%  of  companies  in  the  S&P  500 index, up from 56% in 2008.
During  2009  these proposals received on average 59% shareholder support (based
on for and against votes), up from 54% in 2008. The plurality vote standard

Today,  most  US  companies  still elect directors by a plurality vote standard.
Under that standard, if one shareholder holding only one share votes in favor of
a  nominee  (including  himself, if the director is a shareholder), that nominee
"wins"  the  election  and assumes a seat on the board. The common concern among
companies  with a plurality voting standard was the possibility that one or more
directors   would  not  receive  a  majority  of  votes,  resulting  in  "failed
elections."  This was of particular concern during the 1980s, an era of frequent
takeovers and contests for control of companies.

Advantages of a majority vote standard

If  a  majority  vote standard were implemented, a nominee would have to receive
the  support  of  a  majority  of the shares voted in order to be elected. Thus,
shareholders  could collectively vote to reject a director they believe will not
pursue their best interests. We think that this minimal amount of protection for
shareholders is reasonable and will not upset the corporate structure nor reduce
the  willingness  of  qualified  shareholder-focused  directors  to serve in the
future.

-----------

(44) Spencer Stuart Board Index, 2010, p. 14

                                       29
<PAGE>



We  believe  that  a  majority  vote standard will likely lead to more attentive
directors.  Occasional  use  of  this  power will likely prevent the election of
directors  with  a  record  of  ignoring shareholder interests in favor of other
interests  that  conflict  with  those  of investors. Glass Lewis will generally
support  proposals  calling  for  the  election  of directors by a majority vote
except for use in contested director elections.

In  response  to  the  high  level of support majority voting has garnered, many
companies  have voluntarily taken steps to implement majority voting or modified
approaches  to  majority  voting.  These  steps  range  from a modified approach
requiring  directors  that receive a majority of withheld votes to resign (e.g.,
Ashland  Inc.)  to  actually  requiring a majority vote of outstanding shares to
elect directors (e.g., Intel).

We  feel  that  the modified approach does not go far enough because requiring a
director  to  resign  is  not  the  same as requiring a majority vote to elect a
director  and  does  not  allow  shareholders a definitive voice in the election
process.   Further,  under  the  modified  approach,  the  corporate  governance
committee  could  reject  a resignation and, even if it accepts the resignation,
the  corporate  governance  committee decides on the director's replacement. And
since  the  modified  approach  is usually adopted as a policy by the board or a
board committee, it could be altered by the same board or committee at any time.

II. TRANSPARENCY AND

 INTEGRITY OF FINANCIAL REPORTING
================================================================================

AUDITOR RATIFICATION

The  auditor's  role  as  gatekeeper  is  crucial  in ensuring the integrity and
transparency  of  the financial information necessary for protecting shareholder
value.  Shareholders  rely  on  the  auditor  to ask tough questions and to do a
thorough  analysis  of a company's books to ensure that the information provided
to  shareholders  is  complete,  accurate,  fair,  and  that  it is a reasonable
representation  of a company's financial position. The only way shareholders can
make  rational  investment  decisions is if the market is equipped with accurate
information  about  a  company's fiscal health. As stated in the October 6, 2008
Final  Report  of  the Advisory Committee on the Auditing Profession to the U.S.
Department of the Treasury:

"The  auditor  is  expected  to  offer  critical  and  objective judgment on the
financial  matters  under  consideration,  and  actual  and perceived absence of
conflicts is critical to that expectation. The Committee believes that auditors,
investors,  public  companies, and other market participants must understand the
independence  requirements  and their objectives, and that auditors must adopt a
mindset   of  skepticism  when  facing  situations  that  may  compromise  their
independence."

                                       30
<PAGE>



As such, shareholders should demand an objective, competent and diligent auditor
who  performs  at  or above professional standards at every company in which the
investors  hold  an  interest.  Like  directors,  auditors  should  be free from
conflicts of interest and should avoid situations requiring a choice between the
auditor's  interests  and  the  public's  interests.  Almost  without exception,
shareholders  should  be able to annually review an auditor's performance and to
annually  ratify  a  board's  auditor  selection. Moreover, in October 2008, the
Advisory Committee on the Auditing Profession went even further, and recommended
that  "to  further  enhance audit committee oversight and auditor accountability
.... disclosure in the company proxy statement regarding shareholder ratification
[should]  include  the  name(s) of the senior auditing partner(s) staffed on the
engagement."

 Voting Recommendations on Auditor Ratification

We  generally  support management's choice of auditor except when we believe the
auditor's  independence  or  audit integrity has been compromised. Where a board
has  not  allowed  shareholders  to  review  and ratify an auditor, we typically
recommend  voting  against  the  audit  committee chairman. When there have been
material  restatements  of  annual  financial statements or material weakness in
internal  controls,  we  usually  recommend  voting  against  the  entire  audit
committee.

Reasons why we may not recommend ratification of an auditor include:

      1.  When  audit  fees plus audit-related fees total less than the tax fees
      and/or other non-audit fees.

      2.  Recent material restatements of annual financial statements, including
      those  resulting  in  the  reporting  of  material  weaknesses in internal
      controls and including late filings by the company where the auditor bears
      some  responsibility  for  the restatement or late filing.

-----------

(45) "Final Report of the Advisory Committee on the Auditing Profession
to the U.S. Department of the Treasury." p. VIII:20, October 6, 2008.

(46)  An auditor does not audit interim financial statements. Thus, we generally
do not believe that an auditor should be opposed due to a restatement of interim
financial  statements  unless  the  nature  of  the misstatement is clear from a
reading of the incorrect financial statements.


                                       31
<PAGE>



3.  When  the auditor performs prohibited services such as tax-shelter work, tax
services  for  the  CEO or CFO, or contingent-fee work, such as a fee based on a
percentage  of  economic  benefit  to  the  company.

4.  When  audit  fees  are  excessively low, especially when compared with other
companies in the same industry.

5.  When the company has aggressive accounting policies. 6. When the company has
poor disclosure or lack of transparency in its financial statements.

7. Where the auditor limited its liability through its contract with the company
or  the  audit  contract  requires  the  corporation  to use alternative dispute
resolution  procedures.

8.  We also look for other relationships or concerns with the auditor that might
suggest a conflict between the auditor's interests and shareholder interests. We
typically  support  audit-related proposals regarding mandatory auditor rotation
when  the  proposal  uses a reasonable period of time (usually not less than 5-7
years).

PENSION ACCOUNTING ISSUES

A pension accounting question often raised in proxy proposals is what effect, if
any, projected returns on employee pension assets should have on a company's net
income.  This  issue  often  arises  in  the executive-compensation context in a
discussion  of  the  extent  to  which pension accounting should be reflected in
business performance for purposes of calculating payments to executives.

Glass  Lewis  believes  that pension credits should not be included in measuring
income that is used to award performance-based compensation. Because many of the
assumptions used in accounting for retirement plans are subject to the company's
discretion,  management  would  have an obvious conflict of interest if pay were
tied  to  pension  income.  In our view, projected income from pensions does not
truly reflect a company's performance.

III. THE LINK BETWEEN

 COMPENSATION AND PERFORMANCE
================================================================================

Glass  Lewis carefully reviews the compensation awarded to senior executives, as
we  believe  that  this is an important area in which the board's priorities are
revealed.  Glass Lewis strongly believes executive compensation should be linked
directly  with  the  performance  of  the business the executive is charged with
managing. We believe the most effective compensation arrangements provide for an
appropriate mix of performance-based short- and long-term incentives in addition
to base salary.


                                       32
<PAGE>



Glass  Lewis  believes  that comprehensive, timely and transparent disclosure of
executive  pay  is  critical  to allowing shareholders to evaluate the extent to
which  the  pay  is  keeping pace with company performance. When reviewing proxy
materials,  Glass  Lewis  examines whether the company discloses the performance
metrics  used  to  determine  executive  compensation.  We recognize performance
metrics must necessarily vary depending on the company and industry, among other
factors,  and  may  include  items such as total shareholder return, earning per
share growth, return on equity, return on assets and revenue growth. However, we
believe  companies  should  disclose  why  the specific performance metrics were
selected  and  how  the  actions  they  are designed to incentivize will lead to
better corporate performance.

Moreover,  it  is rarely in shareholders' interests to disclose competitive data
about  individual  salaries  below  the  senior executive level. Such disclosure
could  create internal personnel discord that would be counterproductive for the
company  and  its  shareholders.  While  we  favor  full  disclosure  for senior
executives  and  we view pay disclosure at the aggregate level (e.g., the number
of  employees  being  paid  over  a  certain amount or in certain categories) as
potentially  useful,  we  do  not believe shareholders need or will benefit from
detailed  reports  about  individual  management  employees  other than the most
senior executives.

ADVISORY VOTE ON EXECUTIVE COMPENSATION ("SAY-ON-PAY")

On  July  21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the "Dodd-Frank Act"), providing for sweeping financial
and  governance  reforms.  One of the most important reforms is found in Section
951(a)  of the Dodd-Frank Act, which requires companies to hold an advisory vote
on  executive  compensation  at  the  first  shareholder meeting that occurs six
months  after  enactment  (January  21, 2011). Further, since section 957 of the
Dodd-Frank   Act  prohibits  broker  discretionary  voting  in  connection  with
shareholder  votes  with  respect to executive compensation, beginning in 2011 a
majority  vote in support of advisory votes on executive compensation may become
more difficult for companies to obtain.

This  practice  of  allowing  shareholdes  a  non-binding  vote  on  a company's
compensation  report is standard practice in many non-US countries, and has been
a  requirement  for  most  companies  in  the  United  Kingdom since 2003 and in
Australia  since  2005.  Although  Say-on-Pay  proposals are non-binding, a high
level  of  "against" or "abstain" votes indicate substantial shareholder concern
about a company's compensation policies and procedures.

                                       33
<PAGE>



Given  the  complexity  of  most  companies'  compensation programs, Glass Lewis
applies  a  highly  nuanced  approach when analyzing advisory votes on executive
compensation.  We  review  each  company's compensation on a case-by-case basis,
recognizing that each company must be examined in the context of industry, size,
maturity,  performance,  financial  condition,  its historic pay for performance
practices, and any other relevant internal or external factors.

We  believe  that  each  company  should  design and apply specific compensation
policies  and practices that are appropriate to the circumstances of the company
and,  in  particular,  will  attract  and  retain competent executives and other
staff, while motivating them to grow the company's long-term shareholder value.

Where  we  find  those specific policies and practices serve to reasonably align
compensation  with  performance,  and  such  practices are adequately disclosed,
Glass Lewis will recommend supporting the company's approach. If, however, those
specific  policies  and  practices  fail  to demonstrably link compensation with
perfomance,  Glass  Lewis will generally recommend voting against the say-on-pay
proposal.

Glass Lewis focuses on four main areas when reviewing Say-on-Pay proposals:

     o  The overall design and structure of the Company's executive compensation
     program including performance metrics;

     o The quality and content of the Company's disclosure;

     o The quantum paid to executives; and

     o  The  link  between  compensation  and  performance  as  indicated by the
     Company's current and past pay-for-performance grades

We  also review any significant changes or modifications, and rationale for such
changes,  made  to  the  Company's  compensation  structure  or  award  amounts,
including base salaries.

Say-on-Pay Voting Recommendations

In  cases  where  we  find  deficiencies  in  a company's compensation program's
design,  implementation  or management, we will recommend that shareholders vote
against  the Say-on-Pay proposal. Generally such instances include evidence of a
pattern  of  poor  pay-for-performance practices (i.e., deficient or failing pay
for  performance  grades),  unclear  or  questionable  disclosure  regarding the
overall compensation structure (e.g., limited information regarding benchmarking
processes,  limited  rationale for bonus performance metrics and targets, etc.),
questionable   adjustments  to  certain  aspects  of  the  overall  compensation
structure  (e.g.,  limited  rationale  for  significant  changes  to performance
targets  or  metrics,  the  payout  of  guaranteed  bonuses or sizable retention
grants, etc.), and/or other egregious compensation practices.


                                       34
<PAGE>



Although  not an exhaustive list, the following issues when weighed together may
cause Glass Lewis to recommend voting against a say-on-pay vote:

     o Inappropriate peer group and/or benchmarking issues

     o Inadequate or no rationale for changes to peer groups

      o  Egregious  or  excessive  bonuses, equity awards or severance payments,
      including golden handshakes and golden parachutes

     o Guaranteed bonuses

     o  Targeting  overall  levels of compensation at higher than median without
     adequate justification

     o  Bonus  or  long-term  plan  targets  set  at  less than mean or negative
     performance levels

     o  Performance  targets  not sufficiently challenging, and/or providing for
     high potential payouts

     o Performance targets lowered, without justification

     o  Discretionary  bonuses  paid  when  short-  or  long-term incentive plan
     targets were not met

     o Executive pay high relative to peers not justified by outstanding company
     performance

     o  The terms of the long-term incentive plans are inappropriate (please see
     "Long-Term Incentives" below)

In  the  instance  that  a  company  has  simply  failed  to  provide sufficient
disclosure  of  its  policies,  we  may recommend shareholders vote against this
proposal solely on this basis, regardless of the appropriateness of compensation
levels.

In  the  case  of  companies that maintain poor compensation policies year after
year  without  any  showing  they  took steps to address the issues, we may also
recommend  that shareholders vote against the chairman and/or additional members
of  the  compensation  committee.  We  may  also  recommend  voting  against the
compensation committee based on the practices or actions of its members, such as
approving  large  one-off  payments,  the  inappropriate  use  of discretion, or
sustained poor pay for performance practices.

                                       35
<PAGE>



Short-Term Incentives

A  short-term  bonus  or  incentive  ("STI")  should  be  demonstrably  tied  to
performance.  Whenever  possible,  we  believe a mix of corporate and individual
performance  measures  is  appropriate.  We  would  normally  expect performance
measures  for STIs to be based on internal financial measures such as net profit
after  tax,  EPS  growth  and  divisional profitability as well as non-financial
factors  such  as  those  related  to safety, environmental issues, and customer
satisfaction.  However, we accept variations from these metrics if they are tied
to the Company's business drivers.

Further,  the target and potential maximum awards that can be achieved under STI
awards  should  be  disclosed. Shareholders should expect stretching performance
targets  for  the  maximum  award  to be achieved. Any increase in the potential
maximum award should be clearly justified to shareholders.

Glass Lewis recognizes that disclosure of some measures may include commercially
confidential  information. Therefore, we believe it may be reasonable to exclude
such  information  in  some  cases  as  long  as the company provides sufficient
justification  for  non-disclosure.  However,  where a short-term bonus has been
paid,  companies  should  disclose  the  extent  to  which  performance has been
achieved  against  relevant  targets,  including disclosure of the actual target
achieved.

Where  management  has  received  significant STIs but short-term performance as
measured  by  such  indicators  as increase in profit and/or EPS growth over the
previous year prima facie appears to be poor or negative, we believe the company
should  provide  a  clear  explanation why these significant short-term payments
were made.

Long-Term Incentives

Glass  Lewis  recognizes the value of equity-based incentive programs. When used
appropriately,  they  can  provide  a  vehicle for linking an executive's pay to
company   performance,   thereby   aligning   their   interests  with  those  of
shareholders.  In addition, equity-based compensation can be an effective way to
attract, retain and motivate key employees.

There  are  certain  elements  that  Glass  Lewis  believes  are  common to most
well-structured long-term incentive ("LTI") plans. These include:

     o No re-testing or lowering of performance conditions

     o Performance metrics that cannot be easily manipulated by management

     o Two or more performance metrics

      o  At  least  one  relative performance metric that compares the company's
      performance to a relevant peer group or index

     o Performance periods of at least three years

     o  Stretching metrics that incentivize executives to strive for outstanding
     performance

     o Individual limits expressed as a percentage of base salary

                                       36
<PAGE>



Performance  measures  should  be  carefully  selected  and should relate to the
specific  business/industry  in  which the company operates and, especially, the
key value drivers of the company's business.

Glass  Lewis  believes  that  measuring  a  company's  performance with multiple
metrics  serves  to provide a more complete picture of the company's performance
than  a single metric, which may focus too much management attention on a single
target  and  is  therefore more susceptible to manipulation. External benchmarks
should  be  disclosed  and transparent, such as total shareholder return ("TSR")
against  a  well-selected  sector index, peer group or other performance hurdle.
The  rationale  behind the selection of a specific index or peer group should be
disclosed.  Internal  benchmarks (e.g. earnings per share growth) should also be
disclosed  and transparent, unless a cogent case for confidentiality is made and
fully explained.

We also believe shareholders should evaluate the relative success of a company's
compensation  programs,  particularly  existing equity-based incentive plans, in
linking  pay and performance in evaluating new LTI plans to determine the impact
of   additional   stock   awards.   We   will  therefore  review  the  company's
pay-for-performance  grade, see below for more information, and specifically the
proportion of total compensation that is stock-based.

Pay for Performance

Glass  Lewis believes an integral part of a well-structured compensation package
is  a  successful  link  between  pay  and  performance.  Therefore, Glass Lewis
developed  a  proprietary pay-for-performance model to evaluate the link between
pay  and  performance  of  the  top  five  executives at US companies. Our model
benchmarks  these  executives'  pay  and  company  performance against four peer
groups  and  across seven performance metrics. Using a forced curve and a school
letter-grade   system,   we   grade   companies  from  A-F  according  to  their
pay-for-performance  linkage.  The  grades  guide our evaluation of compensation
committee  effectiveness  and we generally recommend voting against compensation
committee  of  companies  with  a  pattern  of  failing  our pay-for-performance
analysis.

We  also  use  this  analysis  to  inform  our  voting  decisions  on say-on-pay
proposals.  As  such, if a company receives a failing grade from our proprietary
model,  we  are  likely to recommend shareholders to vote against the say-on-pay
proposal.  However,  there may be exceptions to this rule such as when a company
makes significant enhancements to its compensation programs.

                                       37
<PAGE>



Recoupment ("Clawback") Provisions

Section  954  of  the Dodd-Frank Act requires the SEC to create a rule requiring
listed  companies  to adopt policies for recouping certain compensation during a
three-year  look-back  period.  The rule applies to incentive-based compensation
paid  to  current  or former executives if the company is required to prepare an
accounting   restatement   due   to   erroneous  data  resulting  from  material
non-compliance  with  any  financial reporting requirements under the securities
laws.

These  recoupment  provisions  are  more stringent than under Section 304 of the
Sarbanes-Oxley  Act  in  three respects: (i) the provisions extend to current or
former  executive  officers  rather  than only to the CEO and CFO; (ii) it has a
three-year  look-back  period (rather than a twelve-month look-back period); and
(iii)  it allows for recovery of compensation based upon a financial restatement
due  to erroneous data, and therefore does not require misconduct on the part of
the executive or other employees.

Frequency of Say-on-Pay

The  Dodd-Frank  Act also requires companies to allow shareholders a non-binding
vote  on  the frequency of say-on-pay votes, i.e. every one, two or three years.
Additionally,  Dodd-Frank requires companies to hold such votes on the frequency
of say-on-pay votes at least once every six years.

We  believe companies should submit say-on-pay votes to shareholders every year.
We  believe  that  the time and financial burdens to a company with regard to an
annual  vote  are  relatively  small  and  incremental and are outweighed by the
benefits  to  shareholders  through  more  frequent accountability. Implementing
biannual  or  triennial  votes  on  executive  compensation limits shareholders'
ability  to  hold  the  board accountable for its compensation practices through
means  other  than  voting  against the compensation committee. Unless a company
provides  a  compelling  rationale  or unique circumstances for say-on-pay votes
less  frequent  than  annually,  we  will  generally recommend that shareholders
support annual votes on compensation.

Vote on Golden Parachute Arrangements

The  Dodd-Frank  Act  also  requires  companies  to  provide shareholders with a
separate   non-binding   vote  on  approval  of  golden  parachute  compensation
arrangements in connection with certain change-in-control transactions. However,
if  the  golden  parachute  arrangements  have  previously  been  subject  to  a
say-on-pay vote which shareholders approved, then this required vote is waived.

Glass  Lewis  believes  the narrative and tabular disclosure of golden parachute
arrangements will benefit all shareholders. Glass Lewis will analyze each golden
parachute  arrangement on a case-by-case basis, taking into account, among other
items:  the  ultimate  value  of  the  payments,  the tenure and position of the
executives in question, and the type of triggers involved (single vs double).

                                       38
<PAGE>



EQUITY-BASED COMPENSATION PLAN PROPOSALS

We  believe  that  equity  compensation  awards are useful, when not abused, for
retaining  employees  and  providing  an incentive for them to act in a way that
will  improve  company  performance.  Glass  Lewis  evaluates  option- and other
equity-based compensation plans using a detailed model and analytical review.

Equity-based   compensation   programs  have  important  differences  from  cash
compensation plans and bonus programs. Accordingly, our model and analysis takes
into  account  factors  such  as  plan  administration,  the method and terms of
exercise,  repricing  history,  express  or  implied  rights to reprice, and the
presence of evergreen provisions.

Our analysis is quantitative and focused on the plan's cost as compared with the
business's  operating  metrics.  We run twenty different analyses, comparing the
program  with  absolute  limits  we believe are key to equity value creation and
with  a  carefully  chosen  peer group. In general, our model seeks to determine
whether  the  proposed  plan  is either absolutely excessive or is more than one
standard  deviation  away from the average plan for the peer group on a range of
criteria,  including  dilution  to  shareholders  and  the projected annual cost
relative  to  the  company's  financial performance. Each of the twenty analyses
(and  their  constituent parts) is weighted and the plan is scored in accordance
with that weight.

In  our  analysis,  we  compare  the  program's expected annual expense with the
business's  operating metrics to help determine whether the plan is excessive in
light  of company performance. We also compare the option plan's expected annual
cost  to  the  enterprise value of the firm rather than to market capitalization
because  the  employees,  managers  and  directors of the firm contribute to the
creation  of  enterprise  value  but  not necessarily market capitalization (the
biggest  difference  is  seen  where cash represents the vast majority of market
capitalization).  Finally,  we  do  not rely exclusively on relative comparisons
with  averages  because,  in  addition  to  creeping averages serving to inflate
compensation,  we  believe  that  academic  literature proves that some absolute
limits  are  warranted.  We  evaluate  equity plans based on certain overarching
principles:

      1. Companies should seek more shares only when needed.

      2.  Requested  share  amounts  should  be small enough that companies seek
      shareholder approval every three to four years (or more frequently).

      3.  If  a plan is relatively expensive, it should not grant options solely
      to senior executives and board members.

      4. Annual net share count and voting power dilution should be limited.

                                       39
<PAGE>



      5.  Annual  cost  of  the  plan  (especially  if  not  shown on the income
      statement)  should  be reasonable as a percentage of financial results and
      should be in line with the peer group.

      6.  The  expected  annual  cost  of the plan should be proportional to the
      business's value.

      7. The intrinsic value that option grantees received in the past should be
      reasonable compared with the business's financial results.

      8.  Plans  should deliver value on a per-employee basis when compared with
      programs at peer companies.

      9. Plans should not permit re-pricing of stock options.

      10. Plans should not contain excessively liberal administrative or payment
      terms.

      11.  Selected  performance  metrics should be challenging and appropriate,
      and should be subject to relative performance measurements.

      12.  Stock  grants  should  be  subject  to minimum vesting and/or holding
      periods   sufficient   to   ensure  sustainable  performance  and  promote
      retention.

Option Exchanges

Glass Lewis views option repricing plans and option exchange programs with great
skepticism.  Shareholders  have  substantial risk in owning stock and we believe
that  the employees, officers, and directors who receive stock options should be
similarly situated to align their interests with shareholder interests.

We  are  concerned  that option grantees who believe they will be "rescued" from
underwater  options will be more inclined to take unjustifiable risks. Moreover,
a  predictable  pattern  of  repricing or exchanges substantially alters a stock
option's  value because options that will practically never expire deeply out of
the money are worth far more than options that carry a risk of expiration.

In  short,  repricings  and  option exchange programs change the bargain between
shareholders  and  employees  after  the  bargain has been struck. Re-pricing is
tantamount to re-trading.

There  is  one  circumstance  in which a repricing or option exchange program is
acceptable:  if  macroeconomic  or industry trends, rather than specific company
issues,  cause  a  stock's  value  to  decline dramatically and the repricing is
necessary  to  motivate  and retain employees. In this circumstance, we think it
fair  to conclude that option grantees may be suffering from a risk that was not
foreseeable  when  the original "bargain" was struck. In such a circumstance, we
will recommend supporting a repricing only if the following conditions are true:

                                       40
<PAGE>



      (i) officers and board members cannot not participate in the program;

      (ii)  the  stock  decline  mirrors the market or industry price decline in
      terms of timing and approximates the decline in magnitude;

      (iii)  the  exchange  is  value-neutral  or value-creative to shareholders
      using  very conservative assumptions and with a recognition of the adverse
      selection problems inherent in voluntary programs; and

      (iv)  management  and the board make a cogent case for needing to motivate
      and  retain  existing employees, such as being in a competitive employment
      market.

Option Backdating, Spring-Loading, and Bullet-Dodging

Glass Lewis views option backdating, and the related practices of spring-loading
and  bullet-dodging,  as  egregious actions that warrant holding the appropriate
management  and  board  members  responsible.  These  practices  are  similar to
re-pricing options and eliminate much of the downside risk inherent in an option
grant that is designed to induce recipients to maximize shareholder return.

Backdating  an  option  is  the  act of changing an option's grant date from the
actual  grant  date  to  an earlier date when the market price of the underlying
stock was lower, resulting in a lower exercise price for the option. Glass Lewis
has  identified  over  270  companies that have disclosed internal or government
investigations into their past stock-option grants.

Spring-loading  is  granting  stock  options  while  in  possession of material,
positive  information  that  has  not been disclosed publicly. Bullet-dodging is
delaying  the  grants  of  stock  options  until  after the release of material,
negative  information.  This can allow option grants to be made at a lower price
either  before the release of positive news or following the release of negative
news,  assuming  the  stock's  price  will  move  up  or down in response to the
information.  This  raises  a concern similar to that of insider trading, or the
trading on material non-public information.

The  exercise  price  for an option is determined on the day of grant, providing
the recipient with the same market risk as an investor who bought shares on that
date.  However, where options were backdated, the executive or the board (or the
compensation  committee)  changed the grant date retroactively. The new date may
be  at  or  near  the  lowest  price  for the year or period. This would be like
allowing  an  investor  to  look back and select the lowest price of the year at
which to buy shares.

A  2006  study  of  option  grants made between 1996 and 2005 at 8,000 companies
found that option backdating can be an indication of poor internal controls. The
study found that option backdating was more likely to occur at companies without
a  majority  independent  board  and  with a long-serving CEO; both factors, the
study  concluded,  were  associated  with greater CEO influence on the company's
compensation  and  governance practices.

-------

(47)  Lucian  Bebchuk,  Yaniv  Grinstein  and Urs Peyer. "LUCKY CEOs." November,
2006.

                                       41
<PAGE>



Where  a  company  granted  backdated  options  to  an  executive  who is also a
director,  Glass  Lewis  will  recommend voting against that executive/director,
regardless  of  who  decided  to  make  the award. In addition, Glass Lewis will
recommend  voting  against  those  directors  who either approved or allowed the
backdating. Glass Lewis feels that executives and directors who either benefited
from  backdated options or authorized the practice have breached their fiduciary
responsibility  to  shareholders.  Given the severe tax and legal liabilities to
the  company  from  backdating,  Glass  Lewis  will consider recommending voting
against members of the audit committee who served when options were backdated, a
restatement   occurs,   material  weaknesses  in  internal  controls  exist  and
disclosures  indicate there was a lack of documentation. These committee members
failed  in  their  responsibility  to  ensure  the  integrity  of  the company's
financial   reports.   When   a   company   has  engaged  in  spring-loading  or
bullet-dodging,  Glass  Lewis  will  consider  recommending  voting  against the
compensation  committee  members  where  there  has  been  a pattern of granting
options at or near historic lows. Glass Lewis will also recommend voting against
executives  serving  on  the  board  who  benefited  from  the spring-loading or
bullet-dodging.

162(m) Plans

Section  162(m)  of  the  Internal  Revenue  Code  allows  companies  to  deduct
compensation  in excess of $1 million for the CEO and the next three most highly
compensated  executive officers, excluding the CFO, upon shareholder approval of
the excess compensation. Glass Lewis recognizes the value of executive incentive
programs and the tax benefit of shareholder-approved incentive plans.

We  believe  the  best practice for companies is to provide robust disclosure to
shareholders   so   that  they  can  make  fully-informed  judgments  about  the
reasonableness  of  the  proposed  compensation  plan.  To  allow for meaningful
shareholder   review,   we   prefer  that  disclosure  should  include  specific
performance  metrics,  a  maximum  award  pool,  and  a maximum award amount per
employee. We also believe it is important to analyze the estimated grants to see
if they are reasonable and in line with the company's peers.

                                       42
<PAGE>



We  typically  recommend  voting against a 162(m) plan where: a company fails to
provide  at  least a list of performance targets; a company fails to provide one
of  either  a  total  pool  or  an  individual  maximum; or the proposed plan is
excessive when compared with the plans of the company's peers.

The  company's  record  of aligning pay with performance (as evaluated using our
proprietary  pay-for-performance model) also plays a role in our recommendation.
Where  a  company  has  a  record of setting reasonable pay relative to business
performance,  we  generally recommend voting in favor of a plan even if the plan
caps  seem large relative to peers because we recognize the value in special pay
arrangements for continued exceptional performance.

As  with  all  other  issues  we  review,  our goal is to provide consistent but
contextual  advice  given  the specifics of the company and ongoing performance.
Overall,  we  recognize that it is generally not in shareholders' best interests
to  vote  against  such  a  plan  and  forgo  the  potential  tax  benefit since
shareholder  rejection  of  such plans will not curtail the awards; it will only
prevent the tax deduction associated with them.

Director Compensation Plans

Glass  Lewis  believes that non-employee directors should receive reasonable and
appropriate compensation for the time and effort they spend serving on the board
and  its  committees. Director fees should be competitive in order to retain and
attract  qualified individuals. But excessive fees represent a financial cost to
the  company  and  threaten  to  compromise  the objectivity and independence of
non-employee  directors.  Therefore,  a  balance  is  required. We will consider
recommending  supporting  compensation plans that include option grants or other
equity-based  awards  that help to align the interests of outside directors with
those  of  shareholders.  However,  equity  grants  to  directors  should not be
performance-based to ensure directors are not incentivized in the same manner as
executives  but  rather  serve  as a check on imprudent risk-taking in executive
compensation plan design.

Glass Lewis uses a proprietary model and analyst review to evaluate the costs of
equity  plans  compared  to  the  plans  of  peer  companies with similar market
capitalizations.  We  use  the  results  of  this  model  to  guide  our  voting
recommendations on stock-based director compensation plans.

                                       43
<PAGE>


IV. GOVERNANCE STRUCTURE

 AND THE SHAREHOLDER FRANCHISE
================================================================================

ANTI-TAKEOVER MEASURES

Poison Pills (Shareholder Rights Plans)

Glass  Lewis  believes that poison pill plans are not generally in shareholders'
best  interests.  They  can  reduce  management  accountability by substantially
limiting  opportunities  for  corporate takeovers. Rights plans can thus prevent
shareholders  from  receiving  a  buy-out  premium for their stock. Typically we
recommend  that shareholders vote against these plans to protect their financial
interests  and  ensure  that  they have an opportunity to consider any offer for
their shares, especially those at a premium.

We  believe boards should be given wide latitude in directing company activities
and  in  charting the company's course. However, on an issue such as this, where
the  link  between  the  shareholders'  financial  interests  and their right to
consider  and  accept buyout offers is substantial, we believe that shareholders
should  be allowed to vote on whether they support such a plan's implementation.
This  issue  is  different  from  other matters that are typically left to board
discretion.  Its  potential impact on and relation to shareholders is direct and
substantial.  It is also an issue in which management interests may be different
from those of shareholders; thus, ensuring that shareholders have a voice is the
only way to safeguard their interests.

In certain circumstances, we will support a poison pill that is limited in scope
to  accomplish  a  particular  objective,  such  as  the closing of an important
merger,  or  a  pill that contains what we believe to be a reasonable qualifying
offer  clause.  We will consider supporting a poison pill plan if the qualifying
offer  clause  includes  the  following attributes: (i) The form of offer is not
required to be an all-cash transaction; (ii) the offer is not required to remain
open for more than 90 business days; (iii) the offeror is permitted to amend the
offer,  reduce  the  offer,  or  otherwise  change  the  terms; (iv) there is no
fairness  opinion requirement; and (v) there is a low to no premium requirement.
Where   these   requirements   are  met,  we  typically  feel  comfortable  that
shareholders  will have the opportunity to voice their opinion on any legitimate
offer.

NOL Poison Pills

Similarly,  Glass  Lewis  may  consider  supporting a limited poison pill in the
unique  event that a company seeks shareholder approval of a rights plan for the
express  purpose of preserving Net Operating Losses (NOLs). While companies with
NOLs  can  generally carry these losses forward to offset future taxable income,

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

(48)  Section  382 of the Internal Revenue Code limits companies' ability to use
NOLs  in  the  event  of  a  "change  of ownership." Section 382 of the Internal
Revenue Code refers to a "change of ownership" of more than 50 percentage points
by  one  or  more  5%  shareholders  within  a three-year period. The statute is
intended to deter the "trafficking" of net operating losses.


                                       44
<PAGE>




In  this  case, a company may adopt or amend a poison pill ("NOL pill") in order
to  prevent  an inadvertent change of ownership by multiple investors purchasing
small  chunks  of  stock  at  the same time, and thereby preserve the ability to
carry  the NOLs forward. Often such NOL pills have trigger thresholds much lower
than the common 15% or 20% thresholds, with some NOL pill triggers as low as 5%.

Glass  Lewis  evaluates  NOL  pills on a strictly case-by-case basis taking into
consideration,  among  other  factors, the value of the NOLs to the company, the
likelihood  of  a  change  of ownership based on the size of the holding and the
nature of the larger shareholders, the trigger threshold and whether the term of
the plan is limited in duration (i.e., whether it contains a reasonable "sunset"
provision)   or   is   subject  to  periodic  board  review  and/or  shareholder
ratification.  However,  we  will  recommend  that  shareholders  vote against a
proposal  to  adopt  or amend a pill to include NOL protective provisions if the
company  has  adopted  a  more narrowly tailored means of preventing a change in
control  to  preserve its NOLs. For example, a company may limit share transfers
in its charter to prevent a change of ownership from occurring.

Furthermore,  we  believe that shareholders should be offered the opportunity to
vote  on  any  adoption or renewal of a NOL pill regardless of any potential tax
benefit  that it offers a company. As such, we will consider recommending voting
against  those  members of the board who served at the time when an NOL pill was
adopted  without  shareholder  approval within the prior twelve months and where
the NOL pill is not subject to shareholder ratification.

Fair Price Provisions

Fair  price  provisions,  which are rare, require that certain minimum price and
procedural  requirements  be  observed  by  any  party that acquires more than a
specified  percentage of a corporation's common stock. The provision is intended
to  protect  minority  shareholder  value when an acquirer seeks to accomplish a
merger or other transaction which would eliminate or change the interests of the
minority  stockholders.  The provision is generally applied against the acquirer
unless  the  takeover  is  approved  by a majority of "continuing directors" and
holders  of  a  majority,  in  some cases a supermajority as high as 80%, of the
combined  voting  power of all stock entitled to vote to alter, amend, or repeal
the above provisions.

The  effect  of  a  fair price provision is to require approval of any merger or
business combination with an "interested stockholder" by 51% of the voting stock
of  the  company,  excluding  the  shares held by the interested stockholder. An
interested  stockholder is generally considered to be a holder of 10% or more of
the company's outstanding stock, but the trigger can vary.

Generally,  provisions are put in place for the ostensible purpose of preventing
a  back-end merger where the interested stockholder would be able to pay a lower
price  for  the  remaining  shares  of  the  company than he or she paid to gain
control.  The  effect  of a fair price provision on shareholders, however, is to
limit  their ability to gain a premium for their shares through a partial tender
offer  or  open  market acquisition which typically raise the share price, often
significantly.  A  fair price provision discourages such transactions because of
the  potential  costs  of  seeking  shareholder  approval  and  because  of  the
restrictions on purchase price for completing a merger or other transaction at a
later time.


                                       45
<PAGE>



Glass  Lewis  believes  that  fair  price provisions, while sometimes protecting
shareholders from abuse in a takeover situation, more often act as an impediment
to  takeovers,  potentially  limiting  gains  to  shareholders from a variety of
transactions  that could significantly increase share price. In some cases, even
the  independent  directors  of  the  board  cannot  make  exceptions  when such
exceptions  may be in the best interests of shareholders. Given the existence of
state  law  protections  for  minority  shareholders  such as Section 203 of the
Delaware  Corporations  Code,  we  believe  it  is  in  the  best  interests  of
shareholders to remove fair price provisions.

REINCORPORATION

In  general,  Glass  Lewis  believes  that  the board is in the best position to
determine  the  appropriate  jurisdiction of incorporation for the company. When
examining  a  management  proposal  to  reincorporate  to  a  different state or
country,  we  review  the  relevant  financial  benefits,  generally  related to
improved  corporate  tax  treatment,  as well as changes in corporate governance
provisions,  especially those relating to shareholder rights, resulting from the
change  in  domicile. Where the financial benefits are de minimis and there is a
decrease   in   shareholder   rights,  we  will  recommend  voting  against  the
transaction.

However,  costly,  shareholder-initiated  reincorporations are typically not the
best  route  to  achieve  the  furtherance  of  shareholder  rights.  We believe
shareholders  are  generally  better  served  by  proposing specific shareholder
resolutions  addressing  pertinent  issues  which  may be implemented at a lower
cost, and perhaps even with board approval. However, when shareholders propose a
shift into a jurisdiction with enhanced shareholder rights, Glass Lewis examines
the  significant  ways  would  the  Company  benefit from shifting jurisdictions
including the following:

     1. Is the board sufficiently independent?

     2. Does the Company have anti-takeover protections such as a poison pill or
     classified board in place?

     3.  Has  the  board  been  previously unresponsive to shareholders (such as
     failing   to  implement  a  shareholder  proposal  that  received  majority
     shareholder support)?

     4. Do shareholders have the right to call special meetings of shareholders?

     5. Are there other material governance issues at the Company?


                                       46
<PAGE>



     6.  Has the Company's performance matched or exceeded its peers in the past
     one and three years?

     7.  How has the Company ranked in Glass Lewis' pay-for-performance analysis
     during the last three years?

     8. Does the company have an independent chairman?

We  note,  however,  that we will only support shareholder proposals to change a
company's place of incorporation in exceptional circumstances.

AUTHORIZED SHARES

Glass  Lewis  believes  that  adequate capital stock is important to a company's
operation.  When  analyzing a request for additional shares, we typically review
four common reasons why a company might need additional capital stock:

      (i)  Stock  Split  -  We  typically consider three metrics when evaluating
      whether  we  think  a  stock  split is likely or necessary: The historical
      stock pre-split price, if any; the current price relative to the company's
      most common trading price over the past 52 weeks; and some absolute limits
      on  stock  price  that,  in  our  view,  either  always make a stock split
      appropriate if desired by management or would almost never be a reasonable
      price at which to split a stock.

      (ii)  Shareholder Defenses - Additional authorized shares could be used to
      bolster  takeover  defenses  such  as a "poison pill." Proxy filings often
      discuss  the  usefulness  of  additional  shares  in  defending against or
      discouraging  a  hostile  takeover  as  a reason for a requested increase.
      Glass  Lewis  is  typically  against such defenses and will oppose actions
      intended to bolster such defenses.

      (iii)  Financing  for  Acquisitions - We look at whether the company has a
      history  of  using  stock  for  acquisitions and attempt to determine what
      levels   of   stock  have  typically  been  required  to  accomplish  such
      transactions.  Likewise,  we  look  to  see whether this is discussed as a
      reason for additional shares in the proxy.

      (iv)  Financing for Operations - We review the company's cash position and
      its  ability to secure financing through borrowing or other means. We look
      at the company's history of capitalization and whether the company has had
      to use stock in the recent past as a means of raising capital.

Issuing  additional shares can dilute existing holders in limited circumstances.
Further,  the  availability of additional shares, where the board has discretion
to  implement  a  poison  pill,  can  often  serve  as a deterrent to interested
suitors. Accordingly, where we find that the company has not detailed a plan for
use  of  the  proposed  shares,  or where the number of shares far exceeds those
needed  to  accomplish  a  detailed  plan,  we  typically  recommend against the
authorization of additional shares.

                                       47
<PAGE>


While  we  think  that  having adequate shares to allow management to make quick
decisions  and effectively operate the business is critical, we prefer that, for
significant  transactions,  management come to shareholders to justify their use
of  additional shares rather than providing a blank check in the form of a large
pool of unallocated shares available for any purpose.

ADVANCE NOTICE REQUIREMENTS
FOR SHAREHOLDER BALLOT PROPOSALS

We  typically  recommend  that  shareholders  vote  against proposals that would
require advance notice of shareholder proposals or of director nominees.

These  proposals  typically attempt to require a certain amount of notice before
shareholders  are  allowed to place proposals on the ballot. Notice requirements
typically range between three to six months prior to the annual meeting. Advance
notice  requirements  typically  make it impossible for a shareholder who misses
the  deadline to present a shareholder proposal or a director nominee that might
be in the best interests of the company and its shareholders.

We  believe  shareholders should be able to review and vote on all proposals and
director  nominees.  Shareholders  can always vote against proposals that appear
with  little prior notice. Shareholders, as owners of a business, are capable of
identifying issues on which they have sufficient information and ignoring issues
on   which   they   have  insufficient  information.  Setting  arbitrary  notice
restrictions  limits  the  opportunity for shareholders to raise issues that may
come up after the window closes.

VOTING STRUCTURE

Cumulative Voting

Cumulative  voting  increases  the  ability  of minority shareholders to elect a
director  by  allowing shareholders to cast as many shares of the stock they own
multiplied by the number of directors to be elected. As companies generally have
multiple nominees up for election, cumulative voting allows shareholders to cast
all of their votes for a single nominee, or a smaller number of nominees than up
for  election,  thereby  raising the likelihood of electing one or more of their
preferred  nominees to the board. It can be important when a board is controlled
by  insiders  or affiliates and where the company's ownership structure includes
one or more shareholders who control a majority-voting block of company stock.

Glass  Lewis  believes  that cumulative voting generally acts as a safeguard for
shareholders  by  ensuring  that those who hold a significant minority of shares
can  elect  a candidate of their choosing to the board. This allows the creation
of  boards  that are responsive to the interests of all shareholders rather than
just a small group of large holders.

                                       48
<PAGE>



However,  academic literature indicates that where a highly independent board is
in  place  and  the  company  has  a  shareholder-friendly governance structure,
shareholders   may  be  better  off  without  cumulative  voting.  The  analysis
underlying this literature indicates that shareholder returns at firms with good
governance  structures  are  lower  and that boards can become factionalized and
prone to evaluating the needs of special interests over the general interests of
shareholders collectively.

We  review cumulative voting proposals on a case-by-case basis, factoring in the
independence  of the board and the status of the company's governance structure.
But we typically find these proposals on ballots at companies where independence
is  lacking  and where the appropriate checks and balances favoring shareholders
are  not  in  place.  In  those  instances  we  typically  recommend in favor of
cumulative voting.

Where  a  company  has  adopted  a  true  majority  vote standard (i.e., where a
director  must  receive  a majority of votes cast to be elected, as opposed to a
modified  policy  indicated  by  a  resignation  policy  only), Glass Lewis will
recommend  voting against cumulative voting proposals due to the incompatibility
of the two election methods. For companies that have not adopted a true majority
voting  standard but have adopted some form of majority voting, Glass Lewis will
also  generally  recommend  voting  against  cumulative  voting proposals if the
company  has  not  adopted  antitakeover  protections and has been responsive to
shareholders.

Where  a company has not adopted a majority voting standard and is facing both a
shareholder  proposal  to  adopt  majority  voting and a shareholder proposal to
adopt  cumulative  voting,  Glass  Lewis  will  support only the majority voting
proposal.  When  a  company  has  both  majority voting and cumulative voting in
place,  there  is a higher likelihood of one or more directors not being elected
as  a  result  of  not  receiving  a majority vote. This is because shareholders
exercising  the  right  to  cumulate their votes could unintentionally cause the
failed  election  of one or more directors for whom shareholders do not cumulate
votes.

Supermajority Vote Requirements

Glass  Lewis  believes  that  supermajority vote requirements impede shareholder
action  on  ballot items critical to shareholder interests. An example is in the
takeover  context,  where supermajority vote requirements can strongly limit the
voice of shareholders in making decisions on such crucial matters as selling the
business.  This  in  turn  degrades share value and can limit the possibility of
buyout  premiums to shareholders. Moreover, we believe that a supermajority vote
requirement can enable a small group of shareholders to overrule the will of the
majority  shareholders.  We  believe  that  a  simple majority is appropriate to
approve all matters presented to shareholders.

                                       49
<PAGE>



TRANSACTION OF OTHER BUSINESS
AT AN ANNUAL OR SPECIAL MEETING OF SHAREHOLDERS

We  typically  recommend that shareholders not give their proxy to management to
vote  on  any  other  business  items  that  may properly come before the annual
meeting. In our opinion, granting unfettered discretion is unwise.

ANTI-GREENMAIL PROPOSALS

Glass  Lewis  will support proposals to adopt a provision preventing the payment
of  greenmail,  which  would serve to prevent companies from buying back company
stock  at  significant  premiums  from  a  certain shareholder. Since a large or
majority  shareholder could attempt to compel a board into purchasing its shares
at  a large premium, the anti-greenmail provision would generally require that a
majority  of  shareholders  other  than  the  majority  shareholder  approve the
buyback.

MUTUAL FUNDS: INVESTMENT POLICIES AND ADVISORY AGREEMENTS

Glass  Lewis  believes  that  decisions about a fund's structure and/or a fund's
relationship with its investment advisor or sub-advisors are generally best left
to  management  and  the  members of the board, absent a showing of egregious or
illegal  conduct  that  might  threaten shareholder value. As such, we focus our
analyses of such proposals on the following main areas:

      o The terms of any amended advisory or sub-advisory agreement;

      o Any changes in the fee structure paid to the investment advisor; and

      o Any material changes to the fund's investment objective or strategy.

We generally support amendments to a fund's investment advisory agreement absent
a  material  change  that  is  not  in  the  best  interests  of shareholders. A
significant  increase  in the fees paid to an investment advisor would be reason
for  us  to  consider  recommending  voting  against  a proposed amendment to an
investment  advisory  agreement. However, in certain cases, we are more inclined
to  support  an  increase  in  advisory fees if such increases result from being
performance-based  rather  than  asset-based.  Furthermore, we generally support
sub-advisory  agreements  between  a  fund's  advisor and sub-advisor, primarily
because the fees received by the sub-advisor are paid by the advisor, and not by
the fund.

In  matters  pertaining to a fund's investment objective or strategy, we believe
shareholders  are  best  served  when  a  fund's  objective  or strategy closely
resembles  the  investment  discipline shareholders understood and selected when
they  initially  bought  into  the  fund. As such, we generally recommend voting
against  amendments  to  a  fund's  investment  objective  or  strategy when the
proposed  changes  would  leave  shareholders  with  stakes  in  a  fund that is
noticeably   different  than  when  originally  contemplated,  and  which  could
therefore   potentially   negatively   impact  some  investors'  diversification
strategies.

                                       50
<PAGE>



V. COMPENSATION, ENVIRONMENTAL, SOCIAL AND

 GOVERNANCE SHAREHOLDER INITIATIVES
================================================================================

Glass Lewis typically prefers to leave decisions regarding day-to-day management
and  policy  decisions,  including  those  related  to  social, environmental or
political issues, to management and the board, except when there is a clear link
between  the proposal and value enhancement or risk mitigation. We feel strongly
that  shareholders should not attempt to micromanage the company, its businesses
or its executives through the shareholder initiative process. Rather, we believe
shareholders  should  use their influence to push for governance structures that
protect  shareholders  and  promote director accountability. Shareholders should
then  put in place a board they can trust to make informed decisions that are in
the  best  interests  of  the  business  and its owners, and then hold directors
accountable  for  management  and  policy  decisions  through  board  elections.
However,   we  recognize  that  support  of  appropriately  crafted  shareholder
initiatives may at times serve to promote or protect shareholder value.

To  this  end,  Glass  Lewis  evaluates  shareholder proposals on a case-by-case
basis.  We  generally recommend supporting shareholder proposals calling for the
elimination  of,  as  well  as  to require shareholder approval of, antitakeover
devices  such  as  poison  pills  and  classified boards. We generally recommend
supporting  proposals  likely  to  increase and/or protect shareholder value and
also  those  that promote the furtherance of shareholder rights. In addition, we
also   generally   recommend   supporting   proposals   that   promote  director
accountability and those that seek to improve compensation practices, especially
those promoting a closer link between compensation and performance.

The  following  is  a  discussion  of  Glass  Lewis'  approach to certain common
shareholder resolutions. We note that the following is not an exhaustive list of
all shareholder proposals.

COMPENSATION

Glass  Lewis carefully reviews executive compensation since we believe that this
is  an  important  area  in  which  the board's priorities and effectiveness are
revealed.  Executives  should  be compensated with appropriate base salaries and
incentivized  with  additional  awards  in  cash  and  equity  only  when  their
performance  and  that  of  the  company  warrants  such  rewards. Compensation,
especially  when also in line with the compensation paid by the company's peers,
should  lead  to  positive  results  for  shareholders  and  ensure  the  use of
appropriate incentives that drives those results over time.

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However,  as a general rule, Glass Lewis does not believe shareholders should be
involved  in the approval and negotiation of compensation packages. Such matters
should  be  left  to  the  board's  compensation  committee,  which  can be held
accountable  for  its  decisions  through  the election of directors. Therefore,
Glass  Lewis  closely scrutinizes shareholder proposals relating to compensation
to  determine  if the requested action or disclosure has already accomplished or
mandated  and  whether it allows sufficient, appropriate discretion to the board
to design and implement reasonable compensation programs.

Disclosure of Individual Compensation

Glass  Lewis  believes  that disclosure of information regarding compensation is
critical  to  allowing  shareholders to evaluate the extent to which a company's
pay  is  based  on  performance.  However,  we  recognize that the SEC currently
mandates significant executive compensation disclosure. In some cases, providing
information  beyond  that  which  is required by the SEC, such as the details of
individual  employment  agreements  of  employees  below the senior level, could
create   internal  personnel  tension  or  put  the  company  at  a  competitive
disadvantage,  prompting  employee  poaching  by  competitors.  Further,  it  is
difficult to see how this information would be beneficial to shareholders. Given
these  concerns,  Glass Lewis typically does not believe that shareholders would
benefit  from  additional  disclosure of individual compensation packages beyond
the significant level that is already required; we therefore typically recommend
voting  against shareholder proposals seeking such detailed disclosure. We will,
however,  review  each  proposal  on  a  case  by basis, taking into account the
company's  history  of  aligning  executive  compensation  and  the  creation of
shareholder value.

Linking Pay with Performance

Glass  Lewis  views  performance-based  compensation  as  an  effective means of
motivating executives to act in the best interests of shareholders. In our view,
an   executive's  compensation  should  be  specific  to  the  company  and  its
performance, as well as tied to the executive's achievements within the company.

However,  when firms have inadequately linked executive compensation and company
performance  we  will  consider  recommending  supporting  reasonable  proposals
seeking  that  a percentage of equity awards be tied to performance criteria. We
will  also  consider  supporting appropriately crafted proposals requesting that
the  compensation  committee  include  multiple performance metrics when setting
executive  compensation, provided that the terms of the shareholder proposal are
not  overly  prescriptive.  Though  boards  often  argue  that  these  types  of
restrictions unduly hinder their ability to attract talent we believe boards can
develop an effective, consistent and reliable approach to remuneration utilizing
a   wide   range  (and  an  appropriate  mix)  of  fixed  and  performance-based
compensation.

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Retirement Benefits & Severance

As a general rule, Glass Lewis believes that shareholders should not be involved
in  the  approval  of individual severance plans. Such matters should be left to
the  board's  compensation  committee,  which  can  be  held accountable for its
decisions through the election of its director members.

However,  when  proposals  are  crafted  to only require approval if the benefit
exceeds  2.99  times the amount of the executive's base salary plus bonus, Glass
Lewis  typically  supports  such  requests.  Above  this threshold, based on the
executive's  average  annual  compensation  for  the most recent five years, the
company  can  no  longer  deduct  severance  payments  as  an  expense, and thus
shareholders  are deprived of a valuable benefit without an offsetting incentive
to  the  executive.  We  believe  that  shareholders  should be consulted before
relinquishing  such  a  right,  and  we believe implementing such policies would
still  leave  companies  with  sufficient  freedom  to  enter  into  appropriate
severance arrangements.

Following  the  passage  of  the  Dodd-Frank  Wall  Street  Reform  and Consumer
Protection  Act  ("Dodd-Frank"),  the SEC proposed rules that would require that
public  companies  hold  advisory shareholder votes on compensation arrangements
and understandings in connection with merger transactions, also known as "golden
parachute"  transactions.  However,  the SEC has not finalized the rules in time
for the 2011 proxy season and therefore we expect to continue to see shareholder
proposals  on merger-triggered severance agreements as well as those not related
to mergers.

Bonus Recoupments ("Clawbacks")

We  believe  it  is  prudent for boards to adopt detailed and stringent policies
whereby,  in  the  event  of  a restatement of financial results, the board will
review  all  performance  related  bonuses  and awards made to senior executives
during  the  period  covered  by a restatement and will, to the extent feasible,
recoup  such  bonuses  to  the  extent that performance goals were not achieved.
While  the  Dodd-Frank  Act  mandates that all companies adopt clawback policies
that  will require companies to develop a policy to recover compensation paid to
current  and former executives erroneously paid during the three year prior to a
restatement,  the  SEC  has  yet to finalize the relevant rules. As a result, we
expect  to  see  shareholder proposals regarding clawbacks in the upcoming proxy
season.

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<PAGE>



When  examining  proposals  requesting that companies adopt recoupment policies,
Glass Lewis will first review any relevant policies currently in place. When the
board  has  already  committed to a proper course, and the current policy covers
the major tenets of the proposal, we see no need for further action. Further, in
some instances, shareholder proposals may call for board action that contravenes
legal obligations under existing employment agreements. In other cases proposals
may  excessively  limit  the board's ability to exercise judgment and reasonable
discretion,  which  may  or  may  not  be  warranted,  depending on the specific
situation  of  the  company  in  question.  We  believe  it is reasonable that a
mandatory  recoupment  policy  should  only  affect  senior executives and those
directly responsible for the company's accounting errors.

We  note  that  where  a  company  is  entering  into a new executive employment
contract  that  does  not include a clawback provision and the company has had a
material  restatement  in  the  recent  past,  Glass Lewis will recommend voting
against  the responsible members of the compensation committee. The compensation
committee  has  an  obligation to shareholders to include reasonable controls in
executive contracts to prevent payments in the case of inappropriate behavior.

Golden Coffins

Glass  Lewis  does  not  believe  that  the  payment  of  substantial,  unearned
posthumous  compensation provides an effective incentive to executives or aligns
the  interests  of  executives  with  those  of shareholders. Glass Lewis firmly
believes  that  compensation  paid to executives should be clearly linked to the
creation  of  shareholder  value. As such, Glass Lewis favors compensation plans
centered   on  the  payment  of  awards  contingent  upon  the  satisfaction  of
sufficiently  stretching  and  appropriate  performance  metrics. The payment of
posthumous  unearned  and  unvested  awards  should  be  subject  to shareholder
approval,  if  not  removed  from  compensation  policies entirely. Shareholders
should  be  skeptical  regarding  any  positive  benefit they derive from costly
payments  made to executives who are no longer in any position to affect company
performance.

To  that  end,  we  will  consider  supporting  a reasonably crafted shareholder
proposal  seeking to prohibit, or require shareholder approval of, the making or
promising  of  any  survivor  benefit  payments to senior executives' estates or
beneficiaries.  We  will  not  recommend  supporting  proposals that would, upon
passage,  violate  existing contractual obligations or the terms of compensation
plans currently in effect.

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<PAGE>



Retention of Shares until Retirement

We  strongly  support  the linking of executive pay to the creation of long-term
sustainable   shareholder   value  and  therefore  believe  shareholders  should
encourage  executives  to  retain  some  level of shares acquired through equity
compensation programs to provide continued alignment with shareholders. However,
generally we do not believe that requiring senior executives to retain all or an
unduly  high  percentage of shares acquired through equity compensation programs
following the termination of their employment is the most effective or desirable
way  to  accomplish  this  goal. Rather, we believe that restricting executives'
ability  to  exercise  all  or a supermajority of otherwise vested equity awards
until  they  leave  the  company  may  hinder  the  ability  of the compensation
committee  to  both  attract and retain executive talent. In our view, otherwise
qualified and willing candidates could be dissuaded from accepting employment if
he/she  believes  that  his/her  compensation  could be dramatically affected by
financial  results  unrelated to their own personal performance or tenure at the
company.  Alternatively,  an  overly  strict  policy  could  encourage  existing
employees  to  quit  in  order  to  realize  the value locked in their incentive
awards.  As such, we will not typically recommend supporting proposals requiring
the   retention   of   significant  amounts  of  equity  compensation  following
termination of employment at target firms.

Tax Gross-Ups

Tax  gross-ups  can  act  as  an  anti-takeover  measure,  as  larger payouts to
executives  result  in  larger  gross-ups,  which could artificially inflate the
ultimate  purchase  price  under  a  takeover  or merger scenario. Additionally,
gross-ups  can  result  in  opaque  compensation packages where shareholders are
unlikely  to  be  aware  of  the  total  compensation  an executive may receive.
Further,  we believe that in instances where companies have severance agreements
in  place  for executives, payments made pursuant to such arrangements are often
large  enough  to  soften the blow of any additional excise taxes. Finally, such
payments are not performance based, providing no incentive to recipients and, if
large, can be a significant cost to companies.

Given  the  above,  we  will typically recommend supporting proposals requesting
that a compensation committee adopt a policy that it will not make or promise to
make to its senior executives any tax gross-up payments, except those applicable
to  management  employees  of  the  company  generally,  such as a relocation or
expatriate tax equalization policy.

Linking Executive Pay to Environmental and Social Criteria

We  recognize  that  a  company's  involvement  in environmentally sensitive and
labor-intensive  industries  influences  the  degree  to  which a firm's overall
strategy  must  weigh  environmental  and  social  concerns.  However,  we  also
understand  that  the  value generated by incentivizing executives to prioritize
environmental  and social issues is difficult to quantify and therefore measure,
and necessarily varies among industries and companies.

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<PAGE>



When   reviewing  such  proposals  seeking  to  tie  executive  compensation  to
environmental  or  social practices, we will review the target firm's compliance
with  (or  contravention  of)  applicable  laws and regulations, and examine any
history  of  environmental and social related concerns including those resulting
in material investigations, lawsuits, fines and settlements. We will also review
the  firm's current compensation policies and practice. However, with respect to
executive compensation, Glass Lewis generally believes that such policies should
be left to the compensation committee.

GOVERNANCE

Declassification of the Board

Glass Lewis believes that classified boards (or "staggered boards") do not serve
the  best  interests  of  shareholders.  Empirical  studies have shown that: (i)
companies with classified boards may show a reduction in firm value; (ii) in the
context  of  hostile takeovers, classified boards operate as a takeover defense,
which  entrenches  management, discourages potential acquirers and delivers less
return  to  shareholders;  and  (iii)  companies with classified boards are less
likely  to  receive  takeover  bids  than those with single class boards. Annual
election  of  directors provides increased accountability and requires directors
to focus on the interests of shareholders. When companies have classified boards
shareholders  are  deprived of the right to voice annual opinions on the quality
of oversight exercised by their representatives.

Given the above, Glass Lewis believes that classified boards are not in the best
interests  of  shareholders  and will continue to recommend shareholders support
proposals seeking their repeal.

Right of Shareholders to Call a Special Meeting

Glass  Lewis strongly believes that shareholders should have the ability to call
meetings  of  shareholders  between  annual  meetings  to  consider matters that
require  prompt  attention.  However,  in  order  to  prevent abuse and waste of
corporate  resources  by  a  small  minority  of  shareholders,  we believe that
shareholders  representing  at  least  a sizable minority of shares must support
such  a  meeting  prior  to  its  calling.  Should the threshold be set too low,
companies  might  frequently  be subjected to meetings whose effect could be the
disruption  of  normal business operations in order to focus on the interests of
only  a small minority of owners. Typically we believe this threshold should not
fall below 10-15% of shares, depending on company size.

In our case-by-case evaluations, we consider the following:

     o Company size

     o  Shareholder base in both percentage of ownership and type of shareholder
     (e.g., hedge fund, activist investor, mutual fund, pension fund, etc.)

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<PAGE>



     o  Responsiveness  of  board  and  management  to shareholders evidenced by
     progressive   shareholder   rights   policies   (e.g.,   majority   voting,
     declassifying boards, etc.) and reaction to shareholder proposals

     o Company performance and steps taken to improve bad performance (e.g., new
     executives/directors, spin-offs, etc.)

     o Existence of anti-takeover protections or other entrenchment devices

     o  Opportunities  for  shareholder  action (e.g., ability to act by written
     consent)

     o Existing ability for shareholders to call a special meeting

Right of Shareholders to Act by Written Consent

Glass Lewis strongly supports shareholders' right to act by written consent. The
right to act by written consent enables shareholders to take action on important
issues  that  arise  between  annual  meetings.  However, we believe such rights
should  be  limited  to  at  least  the  minimum  number  of votes that would be
necessary  to  authorize  the  action  at  a  meeting  at which all shareholders
entitled to vote were present and voting.

In  addition  to  evaluating the threshold for which written consent may be used
(e.g.  majority  of  votes  cast or outstanding), we will consider the following
when evaluating such shareholder proposals:

     o Company size

     o  Shareholder base in both percentage of ownership and type of shareholder
     (e.g., hedge fund, activist investor, mutual fund, pension fund, etc.)

     o  Responsiveness  of  board  and  management  to shareholders evidenced by
     progressive   shareholder   rights   policies   (e.g.,   majority   voting,
     declassifying boards, etc.) and reaction to shareholder proposals

     o Company performance and steps taken to improve bad performance (e.g., new
     executives/directors, spin offs, etc.)

     o Existence of anti-takeover protections or other entrenchment devices

     o Opportunities for shareholder action (e.g., ability and threshold to call
     a special meeting)

     o Existing ability for shareholders to act by written consent

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<PAGE>



Board Composition

Glass  Lewis  believes  the  selection  and  screening  process  for identifying
suitably  qualified  candidates  for a company's board of directors is one which
requires  the  judgment  of  many  factors,  including the balance of skills and
talents,  the  breadth  of  experience  and diversity of candidates and existing
board  members. Diversity of skills, abilities and points of view can foster the
development  of  a  more  creative,  effective  and  dynamic  board. In general,
however,  we do not believe that it is in the best interests of shareholders for
firms  to  be  beholden  to  arbitrary  rules regarding its board, or committee,
composition.  We  believe  such  matters  should be left to a board's nominating
committee,  which  is  generally  responsible  for establishing and implementing
policies  regarding  the composition of the board. Members of this committee may
be  held  accountable  through  the  director election process. However, we will
consider   supporting  reasonable,  well-crafted  proposals  to  increase  board
diversity  where there is evidence a board's lack of diversity lead to a decline
in shareholder value.

Reimbursement of Solicitation Expenses

Where  a dissident shareholder is seeking reimbursement for expenses incurred in
waging  a  contest  or  submitting  a  shareholder proposal and has received the
support  of  a majority of shareholders, Glass Lewis generally will recommend in
favor  of reimbursing the dissident for reasonable expenses. In those rare cases
where  a  shareholder  has  put  his or her own time and money into organizing a
successful  campaign  to  unseat  a poorly performing director (or directors) or
sought  support  for a shareholder proposal, we feel that the shareholder should
be entitled to reimbursement of expenses by other shareholders, via the company.
We  believe  that, in such cases, shareholders express their agreement by virtue
of  their majority vote for the dissident (or the shareholder proposal) and will
share in the expected improvement in company performance.

Majority Vote for the Election of Directors

If  a  majority  vote standard were implemented, shareholders could collectively
vote  to reject a director they believe will not pursue their best interests. We
think  that this minimal amount of protection for shareholders is reasonable and
will  not  upset the corporate structure nor reduce the willingness of qualified
shareholder-focused directors to serve in the future.

We  believe  that  a  majority  vote standard will likely lead to more attentive
directors.  Further,  occasional  use  of  this  power  will  likely prevent the
election  of  directors  with  a record of ignoring shareholder interests. Glass
Lewis  will  generally support shareholder proposals calling for the election of
directors by a majority vote, except for use in contested director elections.

Cumulative Vote for the Election of Directors

Glass  Lewis  believes  that cumulative voting generally acts as a safeguard for
shareholders  by  ensuring  that those who hold a significant minority of shares
can  elect  a candidate of their choosing to the board. This allows the creation
of  boards  that are responsive to the interests of all shareholders rather than
just  a  small group of large holders. However, when a company has both majority


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<PAGE>


voting  and  cumulative  voting in place, there is a higher likelihood of one or
more  directors  not being elected as a result of not receiving a majority vote.
This  is because shareholders exercising the right to cumulate their votes could
unintentionally  cause  the  failed  election  of one or more directors for whom
shareholders do not cumulate votes.

Given  the above, where a company (i) has adopted a true majority vote standard;
(ii)  has  simultaneously  proposed  a  management-initiated  true majority vote
standard; or (iii) is simultaneously the target of a true majority vote standard
shareholder  proposal,  Glass  Lewis  will  recommend  voting against cumulative
voting  proposals  due  to  the  potential  incompatibility  of the two election
methods.

For  companies  that  have  not adopted a true majority voting standard but have
adopted  some form of majority voting, Glass Lewis will also generally recommend
voting  against  cumulative  voting  proposals  if  the  company has not adopted
antitakeover protections and has been responsive to shareholders.

Supermajority Vote Requirements

We  believe  that  a  simple  majority  is  appropriate  to  approve all matters
presented   to   shareholders,   and   will  recommend  that  shareholders  vote
accordingly.  Glass  Lewis  believes that supermajority vote requirements impede
shareholder  action  on  ballot  items  critical  to shareholder interests. In a
takeover context supermajority vote requirements can strongly limit the voice of
shareholders  in  making  decisions  on  crucial  matters  such  as  selling the
business.  These  limitations in turn may degrade share value and can reduce the
possibility  of  buyout  premiums  for shareholders. Moreover, we believe that a
supermajority  vote  requirement  can  enable  a  small group of shareholders to
overrule the will of the majority of shareholders.

Independent Chairman

Glass  Lewis  views  an  independent  chairman  as  better  able  to oversee the
executives and set a pro-shareholder agenda in the absence of the conflicts that
a  CEO,  executive  insider, or close company affiliate may face. Separating the
roles  of  CEO  and chairman may lead to a more proactive and effective board of
directors.  The  presence  of  an independent chairman fosters the creation of a
thoughtful  and  dynamic board, not dominated by the views of senior management.
We believe that the separation of these two key roles eliminates the conflict of
interest  that  inevitably occurs when a CEO, or other executive, is responsible
for  self-oversight.  As  such,  we  will  typically  support reasonably crafted
shareholder  proposals  seeking the installation of an independent chairman at a
target  company.  However,  we  will  not  support proposals that include overly
prescriptive definitions of "independent."

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ENVIRONMENT

There  are  significant  financial,  legal  and  reputational risks to companies
resulting  from  poor environmental practices or negligent oversight thereof. We
believe  part  of  the  board's  role  is  to  ensure that management conducts a
complete  risk  analysis  of  company  operations,  including  those  that  have
environmental implications. Directors should monitor management's performance in
mitigating  environmental  risks attendant with operations in order to eliminate
or minimize the risks to the company and shareholders.

When  management and the board have displayed disregard for environmental risks,
have  engaged  in  egregious  or  illegal  conduct, or have failed to adequately
respond  to  current  or  imminent environmental risks that threaten shareholder
value,  we  believe  shareholders  should  hold  directors  accountable.  When a
substantial  environmental  risk  has been ignored or inadequately addressed, we
may recommend voting against responsible members of the governance committee, or
members of a committee specifically charged with sustainability oversight.

With  respect  to  environmental  risk,  Glass  Lewis  believes companies should
actively consider their exposure to:

Direct  environmental  risk:  Companies  should  evaluate  financial exposure to
direct  environmental risks associated with their operations. Examples of direct
environmental  risks  are those associated with spills, contamination, hazardous
leakages,  explosions,  or  reduced water or air quality, among others. Further,
firms  should  consider  their  exposure  to  environmental risks emanating from
systemic change over which they may have only limited control, such as insurance
companies  affected  by  increased  storm  severity and frequency resulting from
climate change.

Risk  due to legislation/regulation: Companies should evaluate their exposure to
shifts  or  potential shifts in environmental regulation that affect current and
planned   operations.   Regulation   should   be   carefully  monitored  in  all
jurisdictions within which the company operates. We look closely at relevant and
proposed   legislation   and   evaluate   whether   the  company  has  responded
appropriately.

Legal  and  reputational  risk:  Failure  to take action on important issues may
carry the risk of damaging negative publicity and potentially costly litigation.
While  the  effect  of  high-profile  campaigns  on shareholder value may not be
directly  measurable,  in general we believe it is prudent for firms to evaluate
social and environmental risk as a necessary part in assessing overall portfolio
risk.

If  there  is  a  clear  showing that a company has inadequately addressed these
risks,  Glass  Lewis  may  consider supporting appropriately crafted shareholder
proposals  requesting  increased  disclosure,  board  attention  or,  in limited
circumstances, specific actions. In general, however, we believe that boards and
management  are in the best position to address these important issues, and will
only  rarely  recommend  that  shareholders  supplant  their  judgment regarding
operations.

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<PAGE>



Climate Change and Green House Gas Emission Disclosure

Glass  Lewis  will consider recommending a vote in favor of a reasonably crafted
proposal  to  disclose a company's climate change and/or greenhouse gas emission
strategies  when  (i)  a company has suffered financial impact from reputational
damage,  lawsuits  and/or government investigations, (ii) there is a strong link
between climate change and its resultant regulation and shareholder value at the
firm,  and/or  (iii) the company has inadequately disclosed how it has addressed
climate  change risks. Further, we will typically recommend supporting proposals
seeking disclosure of greenhouse gas emissions at companies operating in carbon-
or  energy-  intensive industries, such basic materials, integrated oil and gas,
iron  and  steel,  transportation,  utilities,  and  construction.  We  are  not
inclined,  however,  to  support  proposals  seeking  emissions  reductions,  or
proposals  seeking  the  implementation  of  prescriptive  policies  relating to
climate change.

Sustainability Report

When  evaluating  requests  that a firm produce a sustainability report, we will
consider, among other things:

     o The financial risk to the company from the firm's environmental practices
     and/or regulation;

     o The relevant company's current level of disclosure;

     o The level of sustainability information disclosed by the firm's peers;

     o The industry in which the firm operates;

     o  The  level  and  type  of  sustainability  concerns/controversies at the
     relevant firm, if any;

     o The time frame within which the relevant report is to be produced; and

     o  The  level  of flexibility granted to the board in the implementation of
     the proposal.

In  general,  we  believe  that  firms operating in extractive industries should
produce sustainability reports, and will recommend a vote for reasonably crafted
proposals  requesting  that  such  a  report  be  produced; however, as with all
shareholder proposals, we will evaluate sustainability report requests on a case
by case basis.


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<PAGE>


Oil Sands

The   procedure   required   to  extract  usable  crude  from  oil  sands  emits
significantly  more greenhouse gases than do conventional extraction methods. In
addition,  development  of  the  oil sands has a deleterious effect on the local
environment,  such as Canada's boreal forests which sequester significant levels
of  carbon.  We  believe firms should strongly consider and evaluate exposure to
financial, legal and reputational risks associated with investment in oil sands.

We  believe firms should adequately disclose their involvement in the oil sands,
including  a  discussion  of  exposure  to sensitive political and environmental
areas.  Firms should broadly outline the scope of oil sands operations, describe
the  commercial  methods  for  producing  oil,  and  discuss  the  management of
greenhouse  gas  emissions.  However,  we  believe  that  detailed disclosure of
investment   assumptions  could  unintentionally  reveal  sensitive  information
regarding  operations and business strategy, which would not serve shareholders'
interest. We will review all proposals seeking increased disclosure of oil sands
operations  in  the  above  context,  but  will  typically not support proposals
seeking cessation or curtailment of operations.

Sustainable Forestry

Sustainable  forestry  provides for the long-term sustainable management and use
of  trees and other non-timber forest products. Retaining the economic viability
of  forests is one of the tenets of sustainable forestry, along with encouraging
more  responsible  corporate  use  of  forests.  Sustainable  land  use  and the
effective  management  of  land  are viewed by some shareholders as important in
light  of  the impact of climate change. Forestry certification has emerged as a
way that corporations can address prudent forest management. There are currently
several   primary   certification  schemes  such  as  the  Sustainable  Forestry
Initiative ("SFI") and the Forest Stewardship Council ("FSC").

There  are nine main principles that comprise the SFI: (i) sustainable forestry;
(ii)  responsible  practices;  (iii) reforestation and productive capacity; (iv)
forest health and productivity; (v) long-term forest and soil productivity; (vi)
protection   of   water   resources;  (vii)  protection  of  special  sites  and
biodiversity; (viii) legal compliance; and (ix) continual improvement.

The  FSC  adheres  to  ten  basic  principles:  (i) compliance with laws and FSC
principles;  (ii)  tenure  and use rights and responsibilities; (iii) indigenous
peoples' rights; (iv) community relations and workers' rights; (v) benefits from
the  forest; (vi) environmental impact; (vii) management plan; (viii) monitoring
and  assessment;  (ix)  maintenance  of high conservation value forests; and (x)
plantations.

Shareholder  proposals  regarding  sustainable forestry have typically requested
that  the  firm comply with the above SFI or FSC principles as well as to assess
the  feasibility  of phasing out the use of uncertified fiber and increasing the
use  of certified fiber. We will evaluate target firms' current mix of certified
and  uncertified  paper  and the firms' general approach to sustainable forestry
practices,  both  absolutely  and  relative  to  its peers but will only support
proposals  of  this  nature  when  we  believe  that  the  proponent has clearly
demonstrated  that  the  implementation of this proposal is clearly linked to an
increase in shareholder value.

                                       62
<PAGE>



SOCIAL ISSUES

Non-Discrimination Policies

Companies   with   records   of   poor   labor   relations  may  face  lawsuits,
efficiency-draining  turnover,  poor  employee  performance, and/or distracting,
costly  investigations.  Moreover,  as  an  increasing number of companies adopt
inclusive  EEO  policies,  companies  without  comprehensive  policies  may face
damaging recruitment, reputational and legal risks. We believe that a pattern of
making  financial  settlements  as  a result of lawsuits based on discrimination
could indicate investor exposure to ongoing financial risk. Where there is clear
evidence  of employment practices resulting in negative economic exposure, Glass
Lewis may support shareholder proposals addressing such risks.

MacBride Principles

To promote peace, justice and equality regarding employment in Northern Ireland,
Dr.  Sean  MacBride,  founder of Amnesty International and Nobel Peace laureate,
proposed the following equal opportunity employment principles:

     1.  Increasing  the  representation  of  individuals  from underrepresented
     religious  groups  in  the  workforce  including  managerial,  supervisory,
     administrative, clerical and technical jobs;

     2.  Adequate  security for the protection of minority employees both at the
     workplace and while traveling to and from work;

     3.  The  banning  of  provocative  religious  or political emblems from the
     workplace;

     4.  All  job openings should be publicly advertised and special recruitment
     efforts   should  be  made  to  attract  applicants  from  underrepresented
     religious groups;

     5.  Layoff,  recall,  and  termination  procedures should not, in practice,
     favor particular religious groupings;

     6.  The  abolition  of  job  reservations, apprenticeship restrictions, and
     differential  employment  criteria,  which  discriminate  on  the  basis of
     religion or ethnic origin;

     7.  The  development  of  training  programs  that will prepare substantial
     numbers  of  current  minority  employees  for  skilled jobs, including the
     expansion  of  existing programs and the creation of new programs to train,
     upgrade, and improve the skills of minority employees;

                                       63
<PAGE>



     8. The establishment of procedures to assess, identify and actively recruit
     minority employees with potential for further advancement; and

     9.  The  appointment  of  senior  management  staff  member  to oversee the
     company's  affirmative action efforts and setting up of timetables to carry
     out affirmative action principles.

Proposals  requesting  the  implementation of the above principles are typically
proposed  at  firms  that  operate,  or  maintain  subsidiaries that operate, in
Northern  Ireland.  In  each  case,  we will examine the company's current equal
employment  opportunity  policy  and  the  extent  to which the company has been
subject  to  protests,  fines,  or  litigation  regarding  discrimination in the
workplace,  if any. Further, we will examine any evidence of the firm's specific
record of labor concerns in Northern Ireland.

Human Rights

Glass Lewis believes explicit policies set out by companies' boards of directors
on  human  rights  provides  shareholders with the means to evaluate whether the
company  has  taken  steps to mitigate risks from its human rights practices. As
such,  we  believe  that  it  is prudent for firms to actively evaluate risks to
shareholder  value  stemming  from  global activities and human rights practices
along  entire  supply chains. Findings and investigations of human rights abuses
can  inflict,  at  a minimum, reputational damage on targeted companies and have
the  potential  to  dramatically  reduce shareholder value. This is particularly
true  for  companies  operating  in  emerging  market  countries  in  extractive
industries and in politically unstable regions. As such, while we typically rely
on  the  expertise  of  the board on these important policy issues, we recognize
that,  in some instances, shareholders could benefit from increased reporting or
further codification of human rights policies.

Military and US Government Business Policies

Glass  Lewis  believes  that  disclosure  to  shareholders of information on key
company endeavors is important. However, we generally do not support resolutions
that  call  for  shareholder  approval  of  policy  statements  for  or  against
government programs, most of which are subject to thorough review by the federal
government  and  elected officials at the national level. We also do not support
proposals favoring disclosure of information where similar disclosure is already
mandated  by  law,  unless  circumstances  exist  that  warrant  the  additional
disclosure.

                                       64
<PAGE>


Foreign Government Business Policies

Where a corporation operates in a foreign country, Glass Lewis believes that the
company  and  board  should  maintain  sufficient controls to prevent illegal or
egregious  conduct with the potential to decrease shareholder value, examples of
which  include  bribery,  money  laundering,  severe environmental violations or
proven  human  rights violations. We believe that shareholders should hold board
members,  and  in particular members of the audit committee and CEO, accountable
for  these  issues  when they face reelection, as these concerns may subject the
company  to  financial  risk.  In  some instances, we will support appropriately
crafted  shareholder  proposals specifically addressing concerns with the target
firm's actions outside its home jurisdiction.

Health Care Reform Principles

Health  care  reform  in the United States has long been a contentious political
issue  and  Glass  Lewis therefore believes firms must evaluate and mitigate the
level of risk to which they may be exposed regarding potential changes in health
care legislation. Over the last several years, Glass Lewis has reviewed multiple
shareholder  proposals requesting that boards adopt principles for comprehensive
health  reform,  such  as  the  following  based upon principles reported by the
Institute of Medicine:

     o Health care coverage should be universal;

     o Health care coverage should be continuous;

     o Health care coverage should be affordable to individuals and families;

     o  The  health  insurance strategy should be affordable and sustainable for
     society; and

     o Health insurance should enhance health and well-being by promoting access
     to   high-quality   care   that  is  effective,  efficient,  safe,  timely,
     patient-centered and equitable.

In  general,  Glass Lewis believes that individual corporate board rooms are not
the  appropriate  forum  in  which  to address evolving and contentious national
policy  issues.  The  adoption  of  a  narrow  set of principles could limit the
board's  ability  to comply with new regulation or to appropriately and flexibly
respond  to  health  care  issues  as  they arise. As such, barring a compelling
reason  to  the  contrary,  we  typically  do  not support the implementation of
national health care reform principles at the company level.

Tobacco

Glass  Lewis  recognizes  the contentious nature of the production, procurement,
marketing  and  selling  of  tobacco  products.  We  also recognize that tobacco
companies  are  particularly susceptible to reputational and regulatory risk due
to  the  nature of its operations. As such, we will consider supporting uniquely
tailored  and  appropriately  crafted shareholder proposals requesting increased
information  or the implementation of suitably broad policies at target firms on
a  case-by-case basis. However, we typically do not support proposals requesting
that  firms  shift  away  from,  or significantly alter, the legal production or
marketing of core products.

                                       65
<PAGE>



Reporting Contributions and Political Spending

While  corporate  contributions  to  national  political  parties and committees
controlled   by   federal   officeholders  are  prohibited  under  federal  law,
corporations  can  legally  donate  to state and local candidates, organizations
registered  under  26  USC Sec. 527 of the Internal Revenue Code and state-level
political  committees.  There  is,  however,  no  standardized  manner  in which
companies  must  disclose  this  information.  As  such, shareholders often must
search  through  numerous campaign finance reports and detailed tax documents to
ascertain  even  limited  information.  Corporations  also  frequently use trade
associations,  which  are not required to report funds they receive for or spend
on political activity, as a means for corporate political action.

Further,  in 2010 the Citizens United v. Federal Election Commission decision by
the  Supreme  Court  affirmed  that  corporations  are entitled to the same free
speech  laws  as individuals and that it is legal for a corporation to donate to
political  causes without monetary limit. While the decision did not remove bans
on  direct  contributions  to  candidates,  companies are now able to contribute
indirectly,  and  substantially,  to candidates through political organizations.
Therefore,  it  appears companies will enjoy greater latitude in their political
actions by this recent decision.

When  evaluating  whether  a  requested report would benefit shareholders, Glass
Lewis seeks answers to the following three key questions:

     o Is the Company's disclosure comprehensive and readily accessible?

     o  How  does  the  Company's  political  expenditure  policy and disclosure
     compare to its peers?

     o What is the Company's current level of oversight?

Glass  Lewis will consider supporting a proposal seeking increased disclosure of
corporate   political  expenditure  and  contributions  if  the  firm's  current
disclosure is insufficient, or if the firm's disclosure is significantly lacking
compared  to  its  peers.  We  will also consider voting for such proposals when
there  is evidence of inadequate board oversight. Given that political donations
are  strategic  decisions  intended  to  increase shareholder value and have the
potential  to  negatively affect the company, we believe the board should either
implement  processes  and  procedures  to  ensure the proper use of the funds or
closely  evaluate  the  process  and procedures used by management. We will also
consider  supporting  such  proposals  when  there  is verification, or credible
allegations,  that  the company is mismanaging corporate funds through political
donations.  If  Glass  Lewis  discovers  particularly  egregious  actions by the
company,  we  will consider recommending voting against the governance committee
members or other responsible directors.

                                       66
<PAGE>



Animal Welfare

Glass  Lewis  believes  that  it  is  prudent for management to assess potential
exposure  to  regulatory,  legal  and  reputational  risks  associated  with all
business  practices,  including  those related to animal welfare. A high profile
campaign  launched  against  a  company  could  result  in shareholder action, a
reduced  customer  base, protests and potentially costly litigation. However, in
general,  we  believe  that the board and management are in the best position to
determine  policies  relating  to  the care and use of animals. As such, we will
typically  vote against proposals seeking to eliminate or limit board discretion
regarding animal welfare unless there is a clear and documented link between the
board's policies and the degradation of shareholder value.

Internet Censorship

Legal and ethical questions regarding the use and management of the Internet and
the worldwide web have been present since access was first made available to the
public  almost twenty years ago. Prominent among these debates are the issues of
privacy,  censorship,  freedom  of expression and freedom of access. Glass Lewis
believes  that  it is prudent for management to assess its potential exposure to
risks  relating  to the internet management and censorship policies. As has been
seen  at  other  firms,  perceived  violation  of  user privacy or censorship of
Internet access can lead to high-profile campaigns that could potentially result
in  decreased  customer  bases  or  potentially  costly  litigation. In general,
however,  we  believe  that management and boards are best equipped to deal with
the evolving nature of this issue in various jurisdictions of operation.



                                       67


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>4
<FILENAME>ex99cert.txt
<TEXT>
                                                                      EX-99.CERT

                                 CERTIFICATIONS

      I, Ralph W. Bradshaw, certify that:

      1. I have reviewed this report on Form N-CSR of Cornerstone Total Return
Fund, Inc.;

      2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;

      4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

            (b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;

            (c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of a date
      within 90 days prior to the filing date of this report based on such
      evaluation; and

            (d) Disclosed in this report any change in the registrant's internal
      control over financial reporting that occurred during the second fiscal
      quarter of the period covered by this report that has materially affected,
      or is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and

      5. The registrant's other certifying officer(s) and I have disclosed to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize, and report financial information; and

            (b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.

Date: March 8, 2011                                /s/ Ralph W. Bradshaw
                                                   -----------------------------
                                                   Ralph W. Bradshaw,
                                                   Chairman and President
                                                   (Principal Executive Officer)
<PAGE>

                                 CERTIFICATIONS

      I, Frank J. Maresca, certify that:

      1. I have reviewed this report on Form N-CSR of Cornerstone Total Return
Fund, Inc.;

      2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;

      4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

            (b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;

            (c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of a date
      within 90 days prior to the filing date of this report based on such
      evaluation; and

            (d) Disclosed in this report any change in the registrant's internal
      control over financial reporting that occurred during the second fiscal
      quarter of the period covered by this report that has materially affected,
      or is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and

      5. The registrant's other certifying officer(s) and I have disclosed to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize, and report financial information; and

            (b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.

Date: March 8, 2011                                /s/ Frank J. Maresca
                                                   -----------------------------
                                                   Frank J. Maresca,
                                                   Treasurer
                                                   (Principal Financial Officer)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906 CERT
<SEQUENCE>5
<FILENAME>ex99-906cert.txt
<TEXT>
                                                                   EX-99.906CERT

                                 CERTIFICATIONS

Ralph W. Bradshaw, Chief Executive Officer, and Frank J. Maresca, Chief
Financial Officer, of Cornerstone Total Return Fund, Inc. (the "Registrant"),
each certify to the best of his knowledge that:

1.    The Registrant's periodic report on Form N-CSR for the period ended
      December 31, 2010 (the "Form N-CSR") fully complies with the requirements
      of section 13(a) or section 15(d) of the Securities Exchange Act of 1934,
      as amended; and

2.    The information contained in the Form N-CSR fairly presents, in all
      material respects, the financial condition and results of operations of
      the Registrant.

CHIEF EXECUTIVE OFFICER                     CHIEF FINANCIAL OFFICER

Cornerstone Total Return Fund, Inc.         Cornerstone Total Return Fund, Inc.

/s/ Ralph W. Bradshaw                       /s/ Frank J. Maresca
------------------------------------        -----------------------------------
Ralph W. Bradshaw, President                Frank J. Maresca, Treasurer

Date:  March 8, 2011                         Date:  March 8, 2011

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER
DOCUMENT AUTHENTICATING, ACKNOWLEDGING OR OTHERWISE ADOPTING THE SIGNATURE THAT
APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT
REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO CORNERSTONE TOTAL RETURN FUND,
INC. AND WILL BE RETAINED BY CORNERSTONE TOTAL RETURN FUND, INC. AND FURNISHED
TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

This certification is being furnished to the Securities and Exchange Commission
solely pursuant to 18 U.S.C. 1350 and is not being filed as part of the Form
N-CSR filed with the Commission.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
