-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JbD826QWTGNbY6kjUYBcFDOdJx8tMQC60G3jbs+a3Ns6o0tnzlZ0oxifgRdyJyox Y9tY13n3SCwzLdLVo8q38Q== 0000909012-07-001362.txt : 20071102 0000909012-07-001362.hdr.sgml : 20071102 20071102131906 ACCESSION NUMBER: 0000909012-07-001362 CONFORMED SUBMISSION TYPE: 40-17G PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20071102 DATE AS OF CHANGE: 20071102 EFFECTIVENESS DATE: 20071102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNERSTONE STRATEGIC VALUE FUND INC/ NEW CENTRAL INDEX KEY: 0000814083 IRS NUMBER: 133407699 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 40-17G SEC ACT: 1940 Act SEC FILE NUMBER: 811-05150 FILM NUMBER: 071209606 BUSINESS ADDRESS: STREET 1: BEAR STEARNS FUNDS MANAGEMENT INC. STREET 2: 383 MADISON AVENUE - 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10179 BUSINESS PHONE: 2122722093 MAIL ADDRESS: STREET 1: BEAR STEARNS FUNDS MANAGEMENT INC. STREET 2: 383 MADISON AVENUE - 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10179 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE STRATEGIC VALUE FUND INC DATE OF NAME CHANGE: 19990622 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE GLOBAL GROWTH FUND INC DATE OF NAME CHANGE: 19920703 40-17G 1 t303781.txt CORNERSTONE TOTAL RETURN FUND, INC. CORNERSTONE STRATEGIC VALUE FUND, INC. CORNERSTONE PROGRESSIVE RETURN FUND 383 Madison Avenue New York, New York 10179 (212) 272-2889 November 2, 2007 Securities and Exchange Commission 450 Fifth Street, N.W. Judiciary Plaza Washington, D.C. 20549 Gentlemen: Pursuant to the requirements of Rule 17g-l(g)(l) of the Investment Company Act of 1940 as amended (the "1940 Act"), I enclose herewith the following: 1. a copy of the binder agreement and endorsement stating the addition of Cornerstone Progressive Return Fund to the joint fidelity bond for the following Funds (attached as EX-99.1): o Cornerstone Total Return Fund, Inc. (File No. 811-02363) o Cornerstone Strategic Value Fund, Inc. (File No. 811-05150) o Cornerstone Progressive Return Fund (File No. 811-22066) o (hereafter defined as the "Fund" or collectively the "Funds") 2. certified copy of the resolutions of a majority of the Board of Trustees who are not "interested persons" of the Fund approving the amount, type, form and coverage of the bond and the premium paid (attached as EX-99.2); 3. a statement showing the amount of the single insured bonds which the Funds would have provided and maintained had they not been named as the insured under a joint insured bond (see EX-99.3); 4. a statement setting forth the period for which the additional premium has been paid (attached as EX-99.4); and 5. a copy of the agreement between each Fund entered into pursuant to an agreement of the joint insured (attached as EX-99.5). Very truly yours, /s/ Jodi B. Levine - ------------------ Jodi B. Levine Treasurer Enclosures EX-99.1 2 exh99-1.txt
FRANK CRYSTAL & COMPANY FINANCIAL SQUARE o 32 OLD SLIP o NEW YORK, NY 10005 INSURANCE BINDER 72785 (212) 344-2444 o (800) 221-5830 TELEX: 222792 o CABLE: CRYSTINSCOS TELECOPIER: (212) 425-7017 - --------------------------------------------------------------------------------------------------------------------------------- Insured's Cornerstone Total Return Fund, Inc. et al Date Typed 9/12/07 Mailing c/o Bear Stearns Funds Management, Inc. By: BK172785 Address 383 Madison Avenue A/E: BK1 New York, NY 10179 Insured's No. - --------------------------------------------------------------------------------Telephone Confirmation [X] Company National Union Fire Insurance Company or c/o Marsh Affinity Group Services Date Agency P.O. Box 9234 With Whom Des Moines, IA 50306 - --------------------------------------------------------------------------------------------------------------------------------- New Order [ ] Endorsement [X] Renewal [ ] Rewrite [ ] Information Only [ ] Inception or Effective Date 03/23/07 - -------------------------------------------------------------------------------- Name (if different from mailing address) Expiration 03/23/08 Policy No. 6214266 - --------------------------------------------------------------------------------Company National Union Fire Insurance Co. Location(s) (if different from mailing address) Prepaid Installment [X] - -------------------------------------------------------------------------------- Type of Coverage - Registered Management Investment Company Bond Premium $389 [ ] - --------------------------------------------------------------------------------------------------------------------------------- SPECIFICATIONS - IT IS HEREBY UNDERSTOOD AND AGREED THAT THE FOLLOWING FUND IS ADDED TO THE ABOVE REFERENCED BOND NO. 6214266, EFFFECTIVE SPETEMBER 7, 2007: - CORNERSTONE PROGRESSIVE RETURN FUND THE ADDITIOANL PREMIUM APPLICABLE TO THIS TRANSACTION IS $389. ALL OTHER TERMS AND CONDITIONS SHALL REMAIN UNCHANGED - --------------------------------------------------------------------------------------------------------------------------------- Mortgagee [ ] Loss Payee [ ] Additional Insured [ ] Other [ ] - --------------------------------------------------------------------------------------------------------------------------------- Enclosure [ ] The undersigned company agrees, for its respective interests only and to the extent respectively indicated to effect insurance or changes as set forth. This agreement is binding for account of the Assured until acceptance of satisfactory policy and/or endorsement and/or term agreed to by Frank Crystal & Co., Inc. This Binder is issued for a period of 60 days and automatically will be extended for additional - --------------------------------------------------------------------------------consecutive periods of 60 days until acceptance Remarks [ ] of the Policy, Bond, and/or Endorsement by the Assured. - --------------------------------------------------------------------------------------------------------------------------------- For Frank Crystal & Co., Inc. Name of Underwriter: Refer to: Brian P. Kill (Print or Type) Ida Dominquez Signature - --------------------------------------------------------------------------------------------------------------------------------- Admitted [X] Non-Admitted [ ] For (Insurance Company) National Union Fire Insurance Co. Date Signed - ---------------------------------------------------------------------------------------------------------------------------------
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA RIDER NO. #5 To be attached to and form part of Investment Company Blanket Bond No. 6214266 in favor of Cornerstone Total Return Fund. 1. In consideration of the additional premium of $389, it is hereby understood and agreed that Cornerstone Progressive Return Fund is added to the list of the insured under the attached bond and that Item 3 of the Declaration Page is deleted in its entirety and replaced with the following: ITEM 3. Limit of Liability - Subject to Section 9, 10, and 12 hereof: Limit of Liability Deduction Insuring Agreement A - FIDELITY 1525000 Insuring Agreement B - AUDIT EXPENSE 25000 Insuring Agreement C - ON PREMISES 1525000 Insuring Agreement D - IN TRANSIT 1525000 Insuring Agreement E - FORGERY OR ALTERATION 1525000 Insuring Agreement F - SECURITIES 1525000 Insuring Agreement G - COUNTERFEIT CURRENCY 1525000 Insuring Agreement H - STOP PAYMENT 25000 Insuring Agreement I - UNCOLLECTIBLE ITEMS OF DEPOSIT 25000 OPTIONAL COVERAGES ADDED BY RIDER: Insuring Agreement J - COMPUTER SYSTEMS 1525000 Insuring Agreement K - UNAUTHORIZED SIGNATURES 25000 Insuring Agreement L - AUTOMATED PHONE SYSTEMS 0 Insuring Agreement M - TELEFACSIMILE 0 If "Not Covered" is inserted above opposite any specified Insuring Agreement or Coverage, such Insuring Agreement or Coverage and any other reference thereto in this bond shall be deemed to be deleted therefro 2. Nothing herein shall be held to vary, alter, waive or extend any of the terms, limitations, conditions or provisions of the attached bond other than as above stated. 3. This rider shall become effective as of 12:01 a.m. on 09/07/2007 standard time as specified in the attached bond. By: /s/ STEVEN E. LISTON ------------------------- Authorized Representative EX-99.2 3 exh99-2.txt CORNERSTONE TOTAL RETURN FUND, INC. CORNERSTONE STRATEGIC RETURN FUND, INC. CORNERSTONE PROGRESSIVE RETURN FUND (THE "FUND") (COLLECTIVELY THE "FUNDS") SECRETARY'S CERTIFICATE I, Thomas R. Westle, Secretary of the Fund, a closed-end management investment company organized under the laws of the State of Delaware, hereby certify that the following resolutions were duly and unanimously adopted by the Trustees, including a majority of the non-interested Trustees, at a special telephonic meeting held on September 26, 2007 and such resolutions are in full force and effect as of the date hereof: APPROVAL OF JOINT FIDELITY BOND RESOLVED, that it is the finding of the Board of Trustees of the Fund that the fidelity bond for the Funds, written by National Union Fire Insurance Company (the "Bond"), which is in the aggregate amount of $1,525,000 to cover, among others, officers and employees of the Funds, in accordance with Rule 17g-1 under the 1940 Act, is reasonable in form and amount, after having given due consideration to, among other things, the value of the aggregate assets of the Funds to which any person covered under the Bond may have access, the type and terms of the arrangements made for the custody and safekeeping of assets of the Funds and the nature of the securities of the Funds; and further RESOLVED, that the allocation and payment of the premium by each of the Funds under the Bond in the amounts presented at this meeting is hereby ratified by the Board of Trustees of the Fund, including a majority of the disinterested Trustees, after having given due consideration to, among other things, the number of other parties insured under the Bond, the nature of business activities of those other parties, the amount of the Bond and the amount of the premium, the ratable allocation of the premium among all parties named as insureds, and the extent to which the share of the premium allocated to Fund under the Bond is less than the premium that the Fund would have had to pay had it maintained a single insured Bond; and further RESOLVED, that the Bond is hereby ratified by the Board of Trustees, including a majority of the disinterested Trustees; and further RESOLVED, that the officers of the Fund be, and each hereby is, authorized to execute and deliver such documents as may be required to effect the foregoing resolutions, to pay any premium as may from time to time be required and to take such further action as may be required by applicable laws, rules or regulations in connection with implementing the foregoing resolutions. /s/ Thomas R. Westle --------------------- Thomas R. Westle Secretary of each Fund EX-99.3 4 exh99-3.txt
CORNERSTONE FAMILY OF CLOSED-END FUNDS Cornerstone Total Return Fund, Inc. Cornerstone Strategic Value Fund, Inc. Cornerstone Progressive Return Fund Joint Fidelity Bond Rule 17g-1 Stand-alone Gross Assets (1) Individual Allocated Annual Fund 6/30/2007 Bond Premium Premium ------------ ----------------------- -------------- ---------------- Cornerstone Total Return Fund, Inc. $52,389,896 $400,000 $823 $2,000 Cornerstone Strategic Value Fund, Inc. 138,800,128 525,000 2,177 2,250 Cornerstone Progressive Return Fund ("CFP") 140,100,020 (2) 525,000 389 (3) 1,575 -------------- ------------ ---------------- Total Coverage Required $1,450,000 -------------- Actual Coverage Obtained $1,525,000 ============== Original Annual Premium Paid $3,000 $4,250 ------------ ---------------- Additional Annual Premium for inclusion of CFP $389 $1,575 ------------ ---------------- Total Premium for this Policy Year $3,389 (4) $5,825 ============ ================ - --------------------------------------------------------------------------------------------------------------------------- (1) In accordance with Rule 17g-1, amount of registered management investment company gross assets should be at the end of the most recent fiscal quarter prior to date of termination (March 23, 2008). Amounts above are for purposes of obtaining premium estimate. (2) Gross assets are projected to reach a maximum of $140,100,020 within 45 days of the initial public offering ("IPO"), effective September 7, 2007. The total assets at the IPO was $121,567,020. (3) Premium amount is for the stub-period September 7, 2007 to March 23, 2008, such premium is not allocated amongst joint policy holders because it is solely for the addition of CFP. The stub-period stand-alone premium would have been $725. (4) Does not include $90 charge for optional terrorism coverage.
EX-99.4 5 exh99-4.txt CORNERSTONE TOTAL RETURN FUND, INC. CORNERSTONE STRATEGIC VALUE FUND, INC. CORNERSTONE PROGRESSIVE RETURN FUND 383 Madison Avenue New York, New York 10179 (212) 272-2889 October 26, 2007 The invoice for the additional premium due on the fidelity bond, covering the period September 7, 2007 to March 23, 2008 for Cornerstone Progressive Return Fund has been paid in full. /s/ Jodi B. Levine ------------------ Jodi B. Levine Treasurer EX-99.5 6 exh99-5.txt AGREEMENT OF THE JOINT INSUREDS THIS AGREEMENT dated April 20, 2001, as amended and restated as of December 27, 2002, February 21, 2003, February 16, 2007 and September 26, 2007 is hereby entered into by and among CORNERSTONE TOTAL RETURN FUND, INC., CORNERSTONE STRATEGIC VALUE FUND, INC. and CORNERSTONE PROGRESSIVE RETURN FUND (hereinafter referred to singularly as the "Fund" or collectively as the "Funds")(the Funds are sometimes referred to individually herein as the "Insured Party" or collectively the "Insured Parties"). WHEREAS, the Insured Parties are management investment companies registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, Rule 17g-1 under the 1940 Act requires each Fund to provide and maintain in effect a bond against larceny and embezzlement by its officers and employees; and WHEREAS, Rule 17g-1 authorizes each Fund, by virtue of its affiliated status, to secure a joint insured bond naming each of them as insureds; and WHEREAS, Rule 17g-1 also requires that each investment company named as an insured in a joint bond enter into an agreement with the other named insureds containing certain provisions regarding the respective shares to be received by said insureds in the event recovery is received under the joint insured bond as a result of a loss sustained by them; and WHEREAS, the Boards of Directors of the Cornerstone Total Return Fund, Inc. and Cornerstone Strategic Value Fund, Inc. and the Board of Trustees of the Cornerstone Progressive Return Fund, including a majority of the Directors/Trustees of such Fund who are not "interested persons" of the Fund as defined by Section 2(a)(19) of the 1940 Act, have given due consideration to all factors relevant to the form, amount and ratable allocation of premiums of such a joint insured bond and have determined that this joint insured bond is in the best interest of each Insured Party and their respective shareholders, and, accordingly, the majority of such Directors/Trustees have approved the amount, type, form and coverage of the joint insured bond and the portion of the premium payable by each such Insured Party hereunder; and WHEREAS, the Directors/Trustees of each Fund have determined, with respect to each Insured Party, that the allocation of the proceeds payable under the joint insured bond as set forth herein, which takes into account the minimum amount of coverage required for each Fund by Rule 17g-1, is equitable. NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants contained herein, hereby agree as follows: 1. JOINT INSURED BOND. The Insured Parties shall maintain in effect a joint fidelity insurance bond (the "Bond") from a reputable fidelity insurance company authorized to do business in the place where the Bond is issued, insuring each Insured Party against larceny and embezzlement and covering such of their respective officers and employees who may, singly or jointly with others, have access, directly or indirectly, to the particular Insured Party's securities or other assets. The Bond shall name each Insured Party as an insured and shall comply with the requirements for such bonds established by Rule 17g-1. 2. AMOUNT. The Bond shall be in at least the minimum amount required by Rule 17g-1(d) to be maintained by the Insured Parties, in accordance with the policies of the staff of the Securities and Exchange Commission. 3. RATABLE ALLOCATION OF PREMIUMS. The Insured Parties shall divide the initial premium and any additional premiums which may become due under the Bond among them based upon their relative net assets at the time of payment of the premium involved. 4. RATABLE ALLOCATION OF PROCEEDS. (a) If more than one of the Insured Parties sustains a single loss (including a loss sustained before the date hereof), for which recovery is received under the Bond, each such Insured Party shall receive that portion of the recovery that is sufficient in amount to indemnify that Insured Party in full for the loss sustained by it, unless the recovery is inadequate to fully indemnify all such Insured Parties sustaining a single loss. (b) If the recovery is inadequate to fully indemnify all Insured Parties sustaining a single loss, the recovery shall be allocated among such Funds as follows: (i) Each of the Insured Parties, to the extent it sustains a loss, shall be allocated an amount equal to the lesser of its actual loss or the minimum amount of the fidelity bond that it would be required to maintain under a single insured bond (determined as of the time of the loss in accordance with the provisions of Rule 17g-1). (ii) The remainder, if any, shall be allocated among the other Insured Parties based upon their relative net assets at the time of the loss (provided that, if such allocation would result in any Insured Party receiving a portion of the recovery in excess of the loss actually sustained by it, the aggregate of such excess among such other Insured Parties shall be reallocated among the remaining Insured Parties not fully indemnified as a result of the foregoing allocations, in proportion to the allocation percentages set forth in this sub-provision). 5. CLAIMS AND SETTLEMENTS. Each Insured Party shall, within five (5) days after the making of any claim under the Bond, provide the other Insured Parties with written notice of the amount and nature of such claim. Each Insured Party shall, within five (5) days of the receipt thereof, provide the other Insured Parties with written notice of the terms of settlement of any claim made under the Bond by such Insured Party. In the event that two (2) or more Insured Parties shall agree to a settlement of a claim made under the Bond with respect to a single loss, notice of the settlement shall also include calculation of the amounts to be received under Paragraph 4 hereof. The officers of each Insured Party designated as responsible for filing notices required by paragraph (g) of Rule 17g-1 under the Act shall give and receive any notices required hereby with respect to such Insured Party. 2 6. MODIFICATIONS AND AMENDMENTS. Any Insured Party may increase the amount of the Bond. Such Insured Party must give written notice thereof to the other Insured Parties to this Agreement and to the Securities and Exchange Commission in accordance with Rule 17g-1. If, pursuant to Rule 17g-1, any Fund shall determine that the coverage provided pursuant to this Agreement should otherwise be modified, it shall so notify the other Insured Parties hereto and indicate the nature of the modification (including the treatment of any increase or return premium) which it believes to be appropriate. If within sixty (60) days of such notice any necessary amendments to this Agreement shall not have been made and the request for modification shall not have been withdrawn, this Agreement shall terminate (except with respect to losses occurring prior to such termination). Any Insured Party may withdraw from this Agreement at any time and cease to be an Insured Party hereto (except with respect to losses occurring prior to such withdrawal) by giving not less than sixty (60) days prior written notice to the other parties of such withdrawal. Upon withdrawal, a withdrawing Insured Party shall be entitled to receive such portion of any premium rebated by the fidelity company with respect to such withdrawal. Upon termination of the Bond, each Insured Party shall receive any premium rebated by the fidelity company with respect to such termination in proportion to the premium paid by such insured, less any premium previously refunded with respect to such insured. 7. GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of New York. 8. NO ASSIGNMENT. This Agreement is not assignable. 9. NOTICES. All notices and other communications hereunder shall be addressed to the appropriate Insured Party, at: c/o Bear Stearns Funds Management, Inc., 383 Madison Avenue, New York, New York 10179, Attention: Mr. Frank J. Maresca. 10. COUNTERPARTS. This Agreement may be executed in two (2) or more parts which together shall constitute a single agreement. 3 IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the day and year first above written. CORNERSTONE TOTAL RETURN FUND, INC. By: /s/ Ralph W. Bradshaw --------------------------- Name: Ralph W. Bradshaw --------------------------- Title: President --------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. By: /s/ Ralph W. Bradshaw --------------------------- Name: Ralph W. Bradshaw --------------------------- Title: President --------------------------- CORNERSTONE PROGRESSIVE RETURN FUND By: /s/ Ralph W. Bradshaw --------------------------- Name: Ralph W. Bradshaw --------------------------- Title: President --------------------------- 4 -----END PRIVACY-ENHANCED MESSAGE-----