Edgar Filing: CLEMENTE STRATEGIC VALUE FUND INC

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant toss.240.14a-11(c) orss.240.14a-12

CLEMENTE STRATEGIC VALUE FUND, INC.
Name of Registrant as Specified In Its Charter

N/A
Name of Person(s) Filing Proxy Statement if other than the Registrant

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which such offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

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4) Date Filed:

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PRELIMINARY PROXY MATERIAL FOR THE INFORMATION
OF THE SECURITIES AND EXCHANGE COMMISSION ONLY

CLEMENTE STRATEGIC VALUE FUND, INC.
575 Lexington Avenue
New York, New York 10022

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On Thursday, April 19, 2001

Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Clemente Strategic Value Fund, Inc. (the "Fund"), a Maryland
corporation, will be held at the executive offices of Bear Stearns Funds
Management Inc., 245 Park Avenue, 7th Floor, Conference Room F, New York, New
York 10167 on Thursday, April 19, 2001 at 11:30 a.m. for the following purposes:

1. To elect two Class I Directors until the year 2002 Annual Meeting, two
Class II Directors until the 2003 Annual Meeting and two Class III
Directors, until the 2004 Annual Meeting (Proposal 1);

2. To ratify a new investment management agreement between Cornerstone
Advisors, Inc. and the Fund (Proposal 2);

3. To ratify the selection of PricewaterhouseCoopers LLP as the Fund's
independent accountants for the year ending December 31, 2001 (Proposal
3); and

4. To consider and vote upon such other matters as may properly come
before said Meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on February 14,
2001 as the record date for the determination of stockholders entitled to notice
of, and to vote at this Meeting or any adjournment thereof. The stock transfer
books will not be closed.

A copy of the Fund's annual report to stockholders accompanies this
proxy material. Semi-annual reports may be ordered free of charge to
stockholders by writing to the Fund at c/o PFPC, Inc., 400 Bellevue Parkway,
Wilmington, Delaware 19809, or by telephone at (____) ___________.

By Order of the Board of Directors
Thomas R. Westle, Secretary

Dated: February 26, 2001

UNLESS YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN AND
MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED REPLY ENVELOPE. YOUR PROMPT
RESPONSE WILL ASSURE A QUORUM AT THE MEETING.

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.

1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.

2. Joint accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.

3. Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:

REGISTRATION

CORPORATE ACCOUNTS VALID SIGNATURE

(1) ABC Corp.................................ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp.................................John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer..................John Doe
(4) ABC Corp. Profit Sharing Plan............John Doe, Trustee

TRUST ACCOUNTS

(1) ABC Trust................................Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d/ 12/28/78..........................Jane B. Doe

CUSTODIAL OR ESTATE ACCOUNTS

(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA............John B. Smith
(2) John B. Smith............................John B. Smith, Jr., Executor

CLEMENTE STRATEGIC VALUE FUND, INC.
575 Lexington Avenue
NEW YORK, NEW YORK 10022
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, APRIL 19, 2001

This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Clemente Strategic Value Fund, Inc. (the
"Fund") for use at the Annual Meeting of Stockholders (the "Meeting") to be held
at the executive offices of Bear Stearns Funds Management Inc., 245 Park Avenue,
7th Floor, Conference Room F, New York, New York 10167 on Thursday, April 19,
2001, at 11:30 a.m., New York time, and at any and all adjournments thereof. A
form of proxy is enclosed herewith. This Proxy Statement and the accompanying
form of proxy are being first mailed to stockholders on or about February 28,
2001.

Any stockholder who executes and delivers a proxy may revoke it by
written communication to the Secretary of the Fund at any time prior to its use
or by voting in person at the Meeting. Unrevoked proxies will be voted in
accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the election of the nominees for Director, FOR the
ratification of the investment management agreement between Cornerstone
Advisors, Inc. and the Fund, and FOR the ratification of the selection of
PricewaterhouseCoopers LLP as the independent accountants of the Fund for the
year ending December 31, 2001.

In general, abstentions and broker non-votes (reflected by signed but
unvoted proxies), as defined below, count for purposes of obtaining a quorum but
do not count as votes cast with respect to any proposal where the broker does
not have discretion. With respect to a proposal requiring the affirmative vote
of a majority of the Fund's outstanding shares of Common Stock, the effect of
abstentions and broker non-votes is the same as a vote against such proposal.
Otherwise, abstentions and broker non-votes have no effect on the outcome of a
proposal. Broker non-votes are shares held in the name of the broker or nominee
for which an executed proxy is received by the Fund, but are not voted on a
proposal because voting instructions have not been received from the beneficial
owners or persons entitled to vote and the broker or nominee does not have
discretionary voting power.

In the event that a quorum is not present at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting to a date
not more than one hundred twenty (120) days after the original record date to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies which
they are entitled to vote FOR or AGAINST any such proposal in their discretion.
Under the By-Laws of the Fund, a quorum is constituted by the presence in person
or by proxy of the holders of record of a majority of the outstanding shares of
Common Stock of the Fund entitled to vote at the Meeting.

The cost of soliciting the proxies will be borne by the Fund. Proxy
solicitations will be made primarily by mail, but solicitations may also be made
by telephone, telegraph or personal interviews conducted by officers or
employees of the Fund, PFPC Inc., the administrator to the Fund (the
"Administrator"), or Shareholder Communications Corporation ("SCC"), a proxy
solicitation firm that has been retained by the Fund.

The agreement between SCC and the Fund provides for SCC to provide
general solicitation services to the Fund at an estimated cost of $6,000, plus
expenses. The Fund will, upon request, bear the reasonable expenses of brokers,
banks and their nominees who are holders of record of the Fund's Common Stock on
the record date, incurred in mailing copies of this Notice of Meeting and Proxy
Statement and the enclosed form of proxy to the beneficial owners of the Fund's
Common Stock.

Only holders of issued and outstanding shares of the Fund's Common
Stock of record at the close of business on February 14, 2001 are entitled to
notice of, and to vote at, the Meeting. Each such holder is entitled to one vote
per share of Common Stock so held. The number of shares of Common Stock
outstanding on February 14, 2001 was ________. The Fund is a closed-end,
management investment company.

A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT ACCOMPANIES THIS PROXY
MATERIAL AND COPIES OF ITS SEMI-ANNUAL REPORT ARE AVAILABLE FREE OF CHARGE BY
WRITING TO THE FUND, AT C/O PFPC, INC. 400 BELLEVUE PARKWAY, WILMINGTON,
DELAWARE 19809, OR BY TELEPHONE AT (___) _________. THIS REPORT IS NOT TO BE
REGARDED AS PROXY-SOLICITING MATERIAL.

This Proxy Statement is first being mailed to stockholders on or about
February 28, 2001.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

At its January 26, 2001, Board meeting (the "Special Meeting"), the
Board of Directors of the Fund amended Article III, Section 3.02 of the Fund's
By-laws (the "Amendment") pursuant to Article Sixth of the Fund's Articles of
Incorporation and Section 2-109 of the Maryland General Corporation Law. The
Amendment staggers the terms of the Fund's Board of Directors. The Board of
Directors now is divided into three classes: Class I, Class II and Class III,
each class having a term of three years. Each year the term of office of one
Class expires. The effect of these staggered terms is to limit the ability of
other entities or persons to acquire control of the Fund by delaying the
replacement of a majority of the Board of Directors.

At the Meeting, stockholders will be asked to elect two Class I
Directors to hold office until the year 2002 Annual Meeting or thereafter until
their successors are duly elected and qualified; two Class II Directors to hold
office until the year 2003 Annual Meeting or thereafter until their successors
are duly elected and qualified; and two Class III Directors to hold office until
the year 2004 Annual Meeting or thereafter until their successors are duly
elected and qualified. In the event that any of the nominees should become
unavailable for election for any presently unforeseen reason, the persons named
in the form of proxy will vote for any nominee who shall be designated by the
present Board of Directors. Directors shall be elected by a plurality of the
shares voting at the Meeting.

On January 26, 2001, Mr. William A. Clark, a Director since 2000,
announced his intention to resign from the Board of Directors and on January 31,
2001, Mr. Clark submitted his letter of resignation as a Director and as
Secretary and Treasurer of the Fund. The Board of Directors then elected Mr.
Edwin Meese III to complete Mr. Clarks term of office. At the January 26, 2001
Board Meeting, the Board of Directors nominated Messrs. Edwin Meese III and
Ralph W. Bradshaw as Class I Directors, Messrs. Thomas H. Lenagh and Scott B.
Rogers as Class II Directors, and Messrs. Andrew A. Strauss and Glenn W. Wilcox,
Sr. as Class III Directors.

At the Meeting, stockholders will be asked to vote for the election of
Messrs. Edwin Meese III and Ralph A. Bradshaw as Class I Directors to serve
until the year 2002 Annual Meeting or thereafter until a successor is duly
elected and qualified, to vote for the election of Messrs. Thomas H. Lenagh and
Scott B. Rogers as Class II Directors to serve until the year 2003 Annual
Meeting or thereafter until each of their successors is duly elected and
qualified, and to vote for the election of Messrs. Andrew A. Strauss and Glenn
W. Wilcox, Sr. as Class III Directors to serve until the year 2004 Annual
Meeting or thereafter until each of their successors is duly elected and
qualified. If elected, each nominee has consented to serve as a director of the
Fund until his successor is duly elected and qualified.

The persons named in the accompanying form of proxy intend to vote at
the Meeting (unless directed not to vote) FOR the election of Messrs. Edwin
Meese III, Ralph W. Bradshaw, Thomas H. Lenagh, Scott B. Rogers, Andrew Strauss,
and Glenn W. Wilcox, Sr. Each nominee has indicated that he will serve if
elected, and the Board of Directors has no reason to believe that any of the
nominees named above will become unavailable for election as a director, but if
any nominee should be unable to serve, the proxy will be voted for any other
person determined by the persons named in the proxy in accordance with their
judgment.

The following table sets forth the ages and principal occupations of
each of the nominees for election as Class II and Class III Directors, and the
number of shares of Common Stock of the Fund beneficially owned by each of them,
directly or indirectly:

NOMINEES

Class I Directors to serve until the Year 2002 Annual Meeting of Stockholders:

Position with Shares of Common Stock
the Fund Since Beneficially Owned
Principal Occupation Directly or Indirectly on
Nominees Age Over the Last 5 Years February 14, 2001*
------------------------------------------- ----------- --------------------------------------- ----------------------------

Edwin Meese III 2001 68 Distinguished Fellow, The Heritage -0-
Heritage Foundation Foundation, Washington D.C.;
214 Massachusetts Ave NE Distinguished Visiting Fellow at the
Washington, DC 20002 Hoover Institution, Stanford
University;
Distinguished
Senior Fellow at
the Institute of
United States
Studies, University
of London; Formerly
U.S. Attorney
General under
President Ronald
Reagan; Chairman of
the Domestic Policy
Council and the
National Drug
Policy Board and a
member of the
National Security
Council; Director
of Cornerstone
Strategic Return
Fund, Inc. and
Nominee for
Director of
Progressive Return
Fund, Inc.

Ralph W. Bradshaw** 1998 50 Chairman of the Board of Directors 600***
One West Pack Square and President of the Fund; President,
Suite 750 Director and shareholder of
Asheville, NC 28801 Cornerstone Advisors, Inc.; Financial
Consultant; Vice President Deep
Discount Advisers, Inc. (1993-1999);
Director of the Austria Fund, Inc.,
Cornerstone Strategic Value Fund,
Inc. and Progressive Return Fund, Inc.

Class II Directors to serve until the Year 2003 Annual Meeting of Stockholders:

1987 78 Chairman of the Board of Inrad Corp.; 1,000
Thomas H. Lenagh Independent Financial Adviser;
Gintel Equity Management Director of Gintel Fund, Adams
Greenwich Office Park #6 Express and Petroleum and Resources,
Greenwich, CT 06831 ASD Group, ICN Pharmaceuticals and
V-Band Corp., Nominee for Director of
Progressive Return Fund, Inc. and
Cornerstone Strategic Return Fund, Inc.

Scott B. Rogers 2000 44 Chief Executive Officer, Asheville 2,500***
30 Cumberland Avenue Buncombe Community Christian Ministry;
Asheville, NC 28801 President, ABCCM Doctor's Medical
Clinic; Director, Southeastern
Jurisdiction Urban Networkers;
Director, A-B Vision Board; Appointee,
NC Governor's Commission on Welfare to
Work; Chairman, Recycling Unlimited;
Director, Interdenominational
Ministerial Alliance; Director
Cornerstone Strategic Return Fund,
Inc. and Progressive Return Fund, Inc.

Class III Directors to serve until the Year 2004 Annual Meeting of Stockholders

Andrew A. Strauss 2000 45 Attorney and senior member of Strauss 10,700***
77 Central Avenue & Associates, P.A., attorneys,
Suite F Asheville, N.C.; previous President of
Asheville, NC 28801 White Knight Healthcare, Inc. and LMV
Leasing, Inc., a wholly owned
subsidiary of Xerox Credit
Corporation; Director of Cornerstone
Strategic Return Fund, Inc. and
Progressive Return Fund.

Glenn W. Wilcox, Sr. 2000 69 Chairman of the Board and Chief
One West Pack Square Executive Officer of Wilcox Travel
Suite 1700 Agency; Director, Champion Industries,
Asheville, NC 28803 Inc.; Chairman, Tower Associates, Inc.
(a real estate venture); Member and
Vice Chairman, the Board of First
Union National Bank; Board Trustee and
Vice Chairman, Appalachian State
University; Board Trustee and
Director, Mars Hill College; Director
of Cornerstone Strategic Return Fund
Inc. and Progressive Return Fund, Inc.

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

* Each director has sole voting and investment power with respect to the listed
shares.

** Mr. Bradshaw is an "interested person" as defined in the Investment Company Act of 1940 ("1940 Act").

*** For this purpose "beneficial ownership" is defined under Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The information as to beneficial ownership is based upon
information furnished to the Fund by the Nominees.

Under the federal securities laws, the Fund is required to provide to
stockholders in connection with the Meeting information regarding compensation
paid to Directors by the Fund as well as by the various other U.S. registered
investment companies advised by the Fund's investment adviser during its prior
fiscal year. The following table provides information concerning the
compensation paid during the year ended December 31, 2000, to each Director of
the Fund. Certain of the Directors received compensation for serving as a
Director of Cornerstone Strategic Return Fund, Inc., which was also advised by
Clemente Capital, Inc. during the year ended December 31, 2000. Please note that
the Fund has no bonus, profit sharing, pension or retirement plans.

Aggregate Total Compensation
Compensation From From Other Funds
Name of Director Director Since Fund for 2000 Advised by Clemente Total Compensation

Ralph W. Bradshaw 1998 10,500$ $0 $1,750
Glenn W. Wilcox, Sr. 2000 $0 $0 $0
Scott B. Rogers 2000 $0 $0 $0
Andrew A. Strauss 2000 $0 $0 $0
Thomas H. Lenagh 1987 10,000 $0 $0
Edwin Meese III 2001 ---- $0 $0

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Section 30(h) of the 1940 Act in combination require the Fund's
directors and officers, persons who own more than ten (10%) percent of the
Fund's Common Stock, and the Fund's investment adviser and their respective
directors and officers, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the New York Stock Exchange,
Inc. The Fund believes that the Fund's directors and officers, the Fund's
investment adviser and their respective directors and officers have complied
with applicable filing requirements during the year ended December 31, 2000.

REQUIRED VOTE

Directors are elected by a plurality (a simple majority of the votes
cast at the meeting) of the votes cast by the holders of shares of Common Stock
of the Fund present in person or represented by proxy at a meeting with a quorum
present. For purposes of the election of Directors, abstentions and broker
non-votes will be counted as shares present for quorum purposes will be
considered votes cast, and will affect the plurality vote required for
Directors.

THE BOARD OF DIRECTORS RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF MESSRS. EDWIN MEESE III AND RALPH W. BRADSHAW AS CLASS I DIRECTORS
OF THE FUND, MESSRS. THOMAS H. LENAGH AND SCOTT B. ROGERS AS CLASS II DIRECTORS
OF THE FUND AND MESSRS. ANDREW A. STRAUSS AND GLENN W. WILCOX, SR. AS CLASS III
DIRECTORS OF THE FUND.

PROPOSAL NO. 2

CONSIDERATION OF THE RATIFICATION OF THE INVESTMENT
MANAGEMENT AGREEMENT BETWEEN THE FUND
AND CORNERSTONE ADVISORS, INC.

Clemente Capital, Inc. ("Clemente Capital") currently serves as
investment adviser to the Fund pursuant to an investment advisory agreement with
the Fund, as amended and restated May 1, 2000 (the "Clemente Agreement").
Wilmington Trust Company currently serves as the Fund's Sub-Adviser pursuant to
a sub-advisory agreement dated May 29, 1997, as amended and restated May 1, 2000
(the "WTC Agreement"). At a meeting held on January 26, 2001, the Board of
Directors terminated each of the Clemente Agreement and the WTC Agreement
effective March 31, 2001. In connection with the termination of the Fund's
advisory relationship with Clemente Capital, Leopoldo M. Clemente, who is
affiliated with Clemente Capital, will no longer serve as President of the Fund,
effective March 31, 2001.

The Board of Directors unanimously approved a new investment management
agreement (the "Cornerstone Agreement") at a meeting of the Board of Directors
duly held on February 9, 2001 and hereby submits the Cornerstone Agreement to
the stockholders for their consideration and ratification. Cornerstone Advisors,
Inc. ("Cornerstone Advisors"), which has its principal office at One West Pack
Square, Suite 750, Asheville, North Carolina 28801, provides investment
management services to closed-end investment companies. Cornerstone Advisors is
a recently organized investment adviser being registered with the Securities and
Exchange Commission under the Investment Advisers Act of 1940, as amended, that
has no previous operating history. It is intended, subject to stockholder
ratification at each of their 2001 Annual Meetings of Stockholders, that
Cornerstone Advisors will also act as the investment adviser to Cornerstone
Strategic Return Fund, Inc. and Progressive Return Fund, Inc. Messrs. Ralph W.
Bradshaw and Gary A. Bentz are the stockholders of Cornerstone Advisors and Mr.
Bradshaw will serve as the Fund's portfolio manager assuming the Cornerstone
Agreement is ratified by stockholders at the Meeting. A copy of the proposed
Cornerstone Agreement is attached hereto as Appendix A.

The Board's decision to terminate the Clemente Agreement and adopt the
Cornerstone Agreement is, in part, intended to create a family of closed-end
funds including but not necessarily limited to the Fund, Progressive Return
Fund, Inc. and Clemente Strategic Value Fund, Inc. It is the intention of the
Board of Directors to create a family of closed-end funds utilizing the same
investment adviser, subject to stockholder ratification of this proposal.

The Board of Directors recommends that the stockholders ratify the
Cornerstone Agreement, entered into as of April 1, 2001, with Cornerstone
Advisors. The Cornerstone Agreement will become effective and the advisory fee
will become payable retroactive to April 1, 2001, subject to ratification by the
Fund's stockholders at the Meeting.

NAME CHANGE

As a result of the termination of the Fund's advisory relationship with
Clemente Capital, it is necessary that the Fund change its name. Therefore, in
connection with its approval of the Cornerstone Agreement, the Board of
Directors unanimously approved the change of the Fund's name to the "Cornerstone
Strategic Value Fund, Inc." The name change does not change the Fund's
fundamental investment objective, which may only be changed by stockholder vote.
Accordingly, the Board of Directors believes that, subject to stockholder
ratification of the Cornerstone Agreement, changing the name of the Fund to the
"Cornerstone Strategic Value Fund, Inc." is necessary and appropriate and in the
best interests of the Fund and its stockholders.

COMPARISON OF THE CLEMENTE AGREEMENT WITH THE WTC AGREEMENT AND THE
CORNERSTONE AGREEMENT

The Clemente Agreement together with the WTC Agreement are
substantially identical to the Cornerstone Agreement with respect to the scope
of the services provided by Clemente Capital, Inc. together with Wilmington
Trust Company and the scope of services to be provided by Cornerstone Advisors
to the Fund, but are substantially different with respect to the amount of
compensation to be paid for such services. The following description of the
Cornerstone Agreement is qualified in its entirety by reference to the copy of
the Cornerstone Agreement attached hereto and made a part hereof as Appendix A.

SERVICES TO BE PERFORMED

Pursuant to the Cornerstone Agreement, Cornerstone Advisors conducts
investment research and supervision for the Fund and is responsible for the
purchase and sale of investment securities for the Fund's portfolio, subject to
the supervision and direction of the Board of Directors. Cornerstone Advisors
provides the Fund with investment advice, supervises the Fund's management and
investment programs and provides investment advisory facilities and executive
and supervisory personnel for managing the investments and effectuating
portfolio transactions. Cornerstone Advisors also furnishes, at its own expense,
all necessary administrative services, office space, equipment and clerical
personnel for servicing the investments of the Fund. In addition, Cornerstone
Advisors pays the salaries and fees of all officers of the Fund who are
affiliated with Cornerstone Advisors.

EXPENSES

The Cornerstone Agreement provides that the Fund is responsible for all
of its expenses and liabilities, except that Cornerstone Advisors is responsible
for the expenses in connection with maintaining a staff within its organization
to furnish the above services to the Fund. Cornerstone Advisors has voluntarily
agreed to limit the Fund's annual operating expenses (excluding interest, taxes,
brokerage commissions, legal fees, expenditures which are capitalized in
accordance with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of such Fund's
business) to 1.65% (on an annualized basis) of the Fund's average net assets for
the fiscal period April 1, 2001 through December 31, 2001.

LIMITATION OF LIABILITY

The Cornerstone Agreement provides that, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard for its
obligations and duties thereunder ("disabling conduct"), Cornerstone Advisors
shall not be liable to the Fund or its stockholders for any act or omission in
the course of or in connection with the rendering of its services thereunder. In
addition, the Cornerstone Agreement provides that the Fund, under certain
circumstances, will indemnify Cornerstone Advisors against any losses or
expenses incurred, including amounts paid in satisfaction of judgments and
reasonable legal costs, not resulting from disabling conduct.

DURATION AND TERMINATION

The Cornerstone Agreement will have an initial term beginning April 1,
2001 and ending March 31, 2003, subject to stockholder ratification, and
thereafter will continue in effect for successive annual periods provided such
continuance is specifically approved at least annually by (i) a majority of the
members of the Fund's Board of Directors who are not parties to the Cornerstone
Agreement, and who are not "interested persons" of any such party, and (ii) a
majority of the Fund's Board of Directors or the holders of a "majority of the
outstanding voting securities" of the Fund. The Cornerstone Agreement may be
terminated, without penalty, on sixty (60) days' notice, by the Fund's Board of
Directors, by a vote of the holders of a "majority of the outstanding voting
securities" of the Fund (as defined under "Required Vote" below) or by
Cornerstone Advisors.

ADVISORY FEES

Under the Clemente Agreement, the fee payable to Clemente Capital in
consideration of services performed is considered an adjustable performance fee,
which may be adjusted pursuant to a comparative formula based upon the Fund's
performance and the performance of the S&P 500 Index ("S&P Index"). Annually,
Clemente Capital was entitled to receive a basic fee of one (1%) percent, which
could (i) increase from one (1%) percent to a maximum of two (2%) percent, or
conversely, (ii) decrease from one (1%) percent to a minimum of zero (0.00%)
percent depending upon the comparative formula. If the Fund outperformed the S&P
Index by exactly five (5%) percent, then Clemente Capital would earn the one
(1%) percent Basic Fee. If the Fund outperformed the S&P Index by at least
fifteen (15%) percent, then Clemente Capital would earn a two (2%) percent fee.
However, if the Fund under performed the S&P Index, then Clemente Capital would
earn a fee less than one (1%) percent. Under the WTC Agreement, Wilmington Trust
Company was entitled to a sub-advisory fee paid by Clemente Capital and not the
Fund equal to twenty-five (25%) percent of the fees received by Clemente
Capital. During the period January 1, 2000 through December 31, 2000, the
aggregate amount of fees paid by the Fund to Clemente Capital, under the
Clemente Agreement was $__________ or (___%). The amount of fees paid by
Clemente Capital to Wilmington Trust Company during the same period was
$_____________ or (____%).

Pursuant to the Cornerstone Agreement, the Fund will pay Cornerstone
Advisors a monthly flat fee at an annual rate of one (1.00%) percent of the
Fund's average weekly net assets for the investment management and research
services provided by Cornerstone Advisors. There is no performance component in
the Cornerstone Agreement's advisory fee. The approximate net assets of the Fund
on December 31, 2000 were $________(____) million. Pursuant to the Cornerstone
Agreement, the management fees began to accrue as of April 1, 2001, however, the
payment of such management fees is subject to stockholder ratification of the
Cornerstone Agreement.

In considering the change in fee structure between the Clemente
Agreement and the Cornerstone Agreement, the Board determined that a flat fee
structure, rather than the earned performance fee structure set forth under the
Clemente Agreement, was better suited for the Fund's current investments in
United States securities.

EVALUATION BY THE BOARD OF DIRECTORS

The Fund's Board of Directors, including the Directors who are not
interested persons of any party to the Cornerstone Agreement or its affiliates,
has approved the Cornerstone Agreement for the Fund and recommends that
stockholders of the Fund ratify such agreement. The Board's deliberations and
approval occurred at the Director's meeting held on February 9, 2001. The
Cornerstone Agreement is effective as of April 1, 2001, subject to stockholder
ratification. If the stockholders do not ratify the Cornerstone Agreement at the
Meeting (or at an adjournment thereof), the Board will either resubmit the
Cornerstone Agreement to the stockholders for their consideration and
ratification or consider alternative sources from which to obtain investment
management and research services for the Fund.

In approving the Cornerstone Agreement and determining to submit it to
stockholders for their ratification, the Board of Directors has sought to obtain
high quality and specialized management and advisory services. The Board of
Directors of the Fund believes that the Cornerstone Agreement will enable the
Fund to obtain high quality services at costs which it deems appropriate and
reasonable and that approval of the Cornerstone Agreement is in the best
interests of the Fund and its stockholders.

In approving the Cornerstone Agreement, the Board of Directors of the
Fund focused primarily on the nature, quality and scope of the operations and
services to be provided by Cornerstone Advisors to the Fund and the fact that
the Clemente Agreement together with the WTC Agreement and the Cornerstone
Agreement, including the terms relating to the services to be performed
thereunder by Cornerstone Advisors, are substantially identical. Based upon its
review of the above factors, the Board of Directors of the Fund concluded that
the Cornerstone Agreement is in the best interests of the Fund and its
stockholders.

REQUIRED VOTE

As provided by the 1940 Act, approval of the Cornerstone Agreement will
require the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which means the affirmative vote of the lesser of (a)
sixty-seven (67%) percent or more of the shares of the Fund entitled to vote
thereon present or represented by proxy at the Meeting, if the holders of more
than fifty (50%) percent of the outstanding shares of the Fund entitled to vote
thereon are present or represented by proxy, or (b) more than fifty (50%)
percent of the total outstanding shares of the Fund entitled to vote thereon.
For this purpose, abstentions and broker non-votes will be counted as shares
present at the Meeting for quorum purposes but not voting and will have the same
effect as votes cast against the Proposal.

THE BOARD OF DIRECTORS, INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED
PERSONS" OF THE FUND, CORNERSTONE ADVISORS OR THEIR AFFILIATES, RECOMMEND THAT
THE STOCKHOLDERS OF THE FUND VOTE "FOR" THE RATIFICATION OF THE CORNERSTONE
AGREEMENT.

PROPOSAL NO. 3

RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS

By vote of the Board of Directors, including the vote of the Directors
who are not "interested persons" as that term is defined in the 1940 Act, the
Board has selected the firm of PricewaterhouseCoopers LLP as the Fund's
independent accountants for the year ending December 31, 2001. Such selection is
being submitted to the stockholders for ratification. The engagement of
PricewaterhouseCoopers LLP is conditioned on the right of the Fund, by majority
vote of its stockholders, to terminate such employment. PricewaterhouseCoopers
LLP has acted as the Fund's independent accountants from its inception through
December 31, 2000.

The Fund's independent accountants are to perform any services normally
provided by independent accounting firms, provided that such services meet any
and all of the independence requirements of the American Institute of Certified
Public Accountants and the Securities Exchange Commission, including the
examination of the Fund's annual financial statements and limited review of its
unaudited quarterly statements, assistance and consultation in connection with
Securities and Exchange Commission and New York Stock Exchange filings, and
preparation of the Fund's annual federal and state income tax returns.

A representative of PricewaterhouseCoopers LLP is expected to be
present at the Meeting by telephone and will have the opportunity to make a
statement if he or she so desires. This representative will also be available to
respond to appropriate questions.

REQUIRED VOTE

Ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants of the Fund requires the affirmative vote of the holders
of a simple majority, defined as a majority of the votes cast by holders of
shares of Common Stock of the Fund present in person or represented by proxy at
a meeting with a quorum present. For purposes of this proposal, abstentions and
broker non-votes will be counted as shares present at the Meeting for quorum
purposes and will be considered votes cast for the foregoing purpose.

THE BOARD OF DIRECTORS, INCLUDING THE NON-INTERESTED DIRECTORS,
RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS THE FUND'S INDEPENDENT ACCOUNTANTS.

AUDIT COMMITTEE

The Fund's Audit Committee is currently composed of Messrs. Lenagh and
Wilcox. The principal functions of the Audit Committee includes but is not
limited to: (i) recommendations to the Board for the appointment of the Fund's
independent accountants; (ii) review of the scope and anticipated cost of the
independent accountant's audit; and (iii) consideration of the independent
accountant's reports concerning their conduct of the audit, including any
comments or recommendations the Board of Directors might want to make in
connection thereto. The Audit Committee convened twice during the fiscal year
ended December 31, 2000.

On June 1, 2000, the Audit Committee, followed by the full Board of
Directors, adopted a written charter setting forth the duties and
responsibilities of the Audit Committee, and such charter was reapproved by the
Board of Directors on February 9, 2001. A copy of the charter, as adopted by the
Board of Directors of the Fund, is included in this Proxy Statement as Appendix
B. The Audit Committee recommends to the Board of Directors, subject to
shareholder approval, the selection of PricewaterhouseCoopers LLP, as the Fund's
independent accountants.

The following table sets forth the aggregate fees billed by the
independent accountants for the Fund's most recent fiscal year for professional
services rendered for: (i) the audit of the Fund's annual financial statements
and the review of financial statements included in the Fund's reports to
stockholders ("Audit Fees"); (ii) financial information systems design and
implementation services provided to the Fund, its investment adviser and
entities that control, are controlled by or under common control with the
Adviser that provides services to the Fund ("Financial Information Systems
Design"); and (iii) all other services provided to the Fund, its investment
adviser and entities that control, are controlled by or under common control
with the Adviser that provides services to the Fund ("Other Fees").

--------------- ------------------------------------------ --------------------
AUDIT FEES FINANCIAL INFORMATION SYSTEMS DESIGN OTHER FEES
--------------- ------------------------------------------ --------------------
$50,000
--------------- ------------------------------------------ --------------------

The Fund has no nominating or compensation committees.

Each Director attended at least seventy-five (75%) percent or more of
the aggregate number of the Board and committee meetings held during the period
for which he was a Director.

AUDIT COMMITTEE REPORT

The Audit Committee has met and held discussions with the Fund's
Administrator and the Fund's independent accountants. The Administrator
represented to the Audit Committee that the Fund's consolidated financial
statements were prepared in accordance with U.S. generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the consolidated
financial statements with the Administrator and the Fund's independent
accountants. The Audit Committee also discussed with the independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61.

The Fund's independent accountants also provided to the Audit Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants' their independence.

Based upon the Audit Committee's discussion with the Administrator and
the independent accountants and the Audit Committee's review of the
representations of the Administrator and the report of the independent
accountants to the Audit Committee, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in the
Fund's Annual Report for the fiscal year ended December 31, 2000 filed with the
Securities and Exchange Commission.

Respectfully submitted,

Thomas H. Lenagh
Glenn W. Wilcox, Sr.

INFORMATION PERTAINING TO THE FUND'S INVESTMENT ADVISER
AND ADMINISTRATOR

THE PROPOSED INVESTMENT ADVISER

Cornerstone Advisors, Inc. ("Cornerstone Advisors"), the Fund's
proposed investment adviser, has its principal office at One West Pack Square,
Suite 750, Asheville, North Carolina 28801. Ralph W. Bradshaw owns fifty (50%)
percent of the common stock of Cornerstone Advisors and is a Director of the
Fund. Gary A. Bentz, who is the Vice President and Treasurer of the Fund, also
owns fifty (50%) percent of the common stock of Cornerstone Advisors.
Cornerstone Advisors is a newly organized registered investment adviser, that
has no previous operating history.

THE INVESTMENT ADVISER

Clemente Capital, Inc., the Fund's current investment adviser, has its
principal office at 152 West 57th Street, New York, New York 10019. Lilia C.
Clemente is Chairman and Chief Executive Officer of the Adviser. Leopoldo M.
Clemente, Jr., President of the Fund, is President, Chief Investment Officer and
a Director of the Adviser. In addition to Mr. and Mrs. Clemente, the Adviser's
Directors are: Salvador Diaz-Verson, Jr., President of Diaz-Verson Capital
Investments, Inc., an investment advisory firm located in Columbus, Georgia;
Robert J. Christian, Chief Investment Officer, Wilmington Trust Company; and
Irving L. Gartenberg, Esq., general counsel to the Adviser. Mrs. Clemente owns
approximately sixty (60%) percent of the outstanding Common Stock of the
Adviser. The address for Mr. and Mrs. Clemente is 152 West 57th Street, New
York, New York 10019. The address for Mr. Diaz-Verson is 1200 Brookstone Centre
Parkway, Suite 105, Columbus, Georgia 31904; the address for Mr. Christian is
1100 North Market Street, Wilmington, Delaware 19890; and the address for Mr.
Gartenberg is 122 East 42nd Street, 46th Floor, New York, New York 10017.
Wilmington Trust Company owns twenty-four (24%) percent of the outstanding
Common Stock of the Adviser.

THE SUB-ADVISER

Wilmington Trust Company is a Delaware bank and trust company with
principal offices at 1100 North Market Street, Wilmington, Delaware 19890.
Wilmington Trust Company is a wholly-owned subsidiary of Wilmington Trust
Corporation, 1100 North Market Street, Wilmington, Delaware 19890.

THE ADMINISTRATOR

PFPC, Inc., whose address is 400 bellevue Parkway, Wilmington, DE
19809, acts as the administrator of the Fund.

At the February 9, 2001 Meeting of the Board of Directors, the Board
approved a new Administration Agreement with Bear Stearns Funds Management, Inc.
effective on or about May 1, 2001. The Board also approved a new Custodian
Agreement with Custodial Trust Company, an affiliate of Bear Stearns Funds
Management, Inc. on or about effective May 1, 2001.

INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS

The following table sets forth the beneficial ownership of shares of
the Fund, at ______________, 2001, by each person known to the Fund to be deemed
the beneficial owner of more than five (5%) percent of the outstanding shares of
the Fund:

NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF COMMON STOCK % OF FUND'S OUTSTANDING
BENEFICIALLY OWNED, SHARES BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY DIRECTLY OR INDIRECTLY

Deep Discount Advisors, Inc.(1) 702,080 16.3%
One West Pack Square
Suite 777
Asheville, NC 28801

Ron Olin Investment(1) 801,100 18.5%
Management Company
One West Pack Square
Suite 777
Asheville, NC 28801

Karpus Investment Management, Inc.(2) 368,015 7.39%
14 Tobey Village Office Park
Pittsford, NY 14534

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

(1) Based solely upon information presented in Schedule 13G, dated February 12,
2001, filed jointly by Deep Discount Advisors, Inc. and Ron Olin Investment
Management Company.

(2) Based solely on information presented in Schedule 13D, dated February 7,
2001, filed by Karpus Investment Management, Inc.

The Fund's understanding is that the aggregate beneficial ownership of
shares of the Fund by these entities as of February 12, 2001 was 1,871,195
shares, representing 42.19% of the Fund.

In addition, on February 14, 2001, Cede & Co., a nominee for participants in the
Depository Trust Company, held of record ___________ shares of the Fund, equal
to approximately ____% of the outstanding shares of the Fund.

OTHER BUSINESS

The Board of Directors of the Fund does not know of any other matter
which may come before the Meeting, but should any other matter requiring a vote
of stockholders arise, including any questions as to the adjournment of the
Meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter.

PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS

All proposals by stockholders of the Fund which are intended to be
presented at the Fund's next Annual Meeting of Stockholders, to be held in the
year 2002, must be received by the Fund addressed to Clemente Strategic Value
Fund, Inc. c/o Bear Stearns Management, Inc., 575 Lexington Avenue, New York,
New York 10022 for inclusion in the Fund's proxy statement and proxy relating to
that meeting in advance of the meeting as set forth below. Any stockholder who
desires to bring a proposal at the Fund's 2002 Meeting of Stockholders without
including such proposal in the Fund's proxy statement must deliver (via the U.S.
Post Office or such other means that guarantees delivery) written notice thereof
to the Secretary of the Fund c/o Bear Stearns Management, Inc., 575 Lexington
Avenue, New York, New York 10022 no earlier than one hundred eighty (180) days
(approximately December 18, 2001) and no later than sixty (60) days
(approximately February 1, 2002) before the date of the Meeting of Stockholders
which will be scheduled to be held in April 2002 or the tenth (10th) day after
public announcement is made by way of publication by the New York Stock Exchange
of the Fund's Meeting date.

Clemente Strategic Value Fund, Inc.

Thomas R. Westle
Secretary

Dated: February 26, 2001

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEEING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVEOPE.

FORM OF PROXY CARD

CLEMENTE STRATEGIC VALUE FUND, INC.

The undersigned stockholder of Clemente Strategic Value Fund, Inc. (the
"Fund") hereby constitutes and appoints Messrs. Ralph W. Bradshaw, Thomas R.
Westle and Frank J. Maresca, or any of them, the action of a majority of them
voting to be controlling, as proxy of the undersigned, with full power of
substitution, to vote all shares of Common Stock of the Fund standing in his or
her name on the books of the Fund at the Annual Meeting of Stockholders of the
Fund to be held on Thursday, April 19, 2001 at 11:30 A.M., New York time, at the
offices of Bear Stearns Funds Management Inc., 245 Park Avenue, 7th Floor,
Conference Room F, New York, New York 10167, or at any adjournment thereof, with
all the powers which the undersigned would possess if personally present, as
designated on the reverse hereof:

The undersigned hereby revokes any proxy previously given and instructs
the said proxies to vote in accordance with the aforementioned instructions with
respect to (a) the election of two Class I Directors, two Class II Directors and
two Class III Directors, (b) the ratification of a new investment management
agreement between Cornerstone Advisors, Inc. and the Fund, (c) the ratification
of the selection by the Board of Directors of the Fund's independent
accountants, and (d) the consideration and vote of such other matters as may
properly come before the Meeting or any adjournment thereof. If no such
specification is made, the undersigned will vote FOR each of the proposals set
forth above, and in their discretion with respect to such other matters as may
properly come before the Meeting.

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

THIS PROXY IS SOLICITED ON BEHALF OF CLEMENTE STRATEGIC VALUE FUND, INC.'S
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON

April 19, 2001

(To be dated and signed on reverse side)

Please mark boxes / / or /X/ in blue or black ink.

PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE:

--------
X
--------

1. To elect the Directors:
Class I Directors: FOR WITHHELD ABSTAIN

Edwin Meese III [ ] [ ] [ ]
Ralph W. Bradshaw [ ] [ ] [ ]

Class II Directors: FOR WITHHELD ABSTAIN

Thomas H. Lenagh [ ] [ ] [ ]
Scott B. Rogers [ ] [ ] [ ]

Class III Directors: FOR WITHHELD ABSTAIN

Andrew A. Strauss [ ] [ ] [ ]

2. To ratify a new investment management agreement between Cornerstone
Advisors, Inc. and the Fund:

FOR WITHHELD ABSTAIN
[ ] [ ] [ ]

3. To ratify the selection by the Board of Directors of PricewaterhouseCoopers
LLP as the Fund's independent accountants for the year ending December 31,
2001:

FOR WITHHELD ABSTAIN
[ ] [ ] [ ]

In their discretion, the proxies are authorized to consider and vote upon
such matters as may properly come before said Meeting or any adjournment
thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE STOCKHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN
FAVOR OF EACH PROPOSAL.

Your proxy is important to assure a quorum at the annual meeting whether or not
you plan to attend the Meeting in person. You may revoke this proxy at anytime,
and the giving of it will not effect your right to attend the annual meeting and
vote in person.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.

SIGNATURE(S)____________________________ DATE___________________

NOTE: Please sign exactly as name appears. When shares are held as joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer and if a
partnership, please sign in full partnership name by authorized person.

PROXY STATEMENT APPENDIX A

INVESTMENT MANAGEMENT AGREEMENT

THIS INVESTMENT MANAGEMENT AGREEMENT dated and effective as of April 1,
2001 between CLEMENTE STRATEGIC VALUE FUND, INC., a Maryland corporation (herein
referred to as the "Fund"), and CORNERSTONE ADVISORS, INC., a corporation duly
organized under the laws of North Carolina (herein referred to as the
"Investment Manager").

1. APPOINTMENT OF INVESTMENT MANAGER. The Investment Manager hereby
undertakes and agrees, upon the terms and conditions herein set forth, to
provide overall investment management services for the Fund, and in connection
therewith to (i) supervise the Fund's investment program, including advising and
consulting with the Fund's Board of Directors regarding the Fund's overall
investment strategy; (ii) make, in consultation with the Fund's Board of
Directors, investment strategy decisions for the Fund; (iii) manage the
investing and reinvesting of the Fund's assets; (iv) place purchase and sale
orders on behalf of the Fund; (v) advise the Fund with respect to all matters
relating to the Fund's use of leveraging techniques; (vi) provide or procure the
provision of research and statistical data to the Fund in relation to investing
and other matters within the scope of the investment objective and limitations
of the Fund; (vii) monitor the performance of the Fund's outside service
providers, including the Fund's administrator, transfer agent and custodian;
(viii) be responsible for compliance by the Fund with U.S. federal, state and
other applicable laws and regulations; and (ix) pay the salaries, fees and
expenses of such of the Fund's directors, officers or employees who are
directors, officers or employees of the Investment Manager or any of its
affiliates, except that the Fund will bear travel expenses or an appropriate
portion thereof of directors and officers of the Fund who are directors,
officers or employees of the Investment Manager, to the extent that such
expenses relate to attendance at meetings of the Board of Directors or any
committees thereof. The Investment Manager may delegate any of the foregoing
responsibilities to a third party with the consent of the Board of Directors.

2. EXPENSES. In connection herewith, the Investment Manager agrees to
maintain a staff within its organization to furnish the above services to the
Fund. The Investment Manager shall bear all expenses arising out of its duties
hereunder.

Except as provided in Section 1 hereof, the Fund shall be responsible
for all of the Fund's expenses and liabilities, including expenses for legal,
accounting and auditing services; taxes and governmental fees; dues and expenses
incurred in connection with membership in investment company organizations; fees
and expenses incurred in connection with listing the Fund's shares on any stock
exchange; costs of printing and distributing shareholder reports, proxy
materials, prospectuses, stock certificates and distribution of dividends;
charges of the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents and
dividend reinvestment plan agents; payment for portfolio pricing services to a
pricing agent, if any; registration and filing fees of the Securities and

A-1

Exchange Commission; expenses of registering or qualifying securities of the
Fund for sale in the various states; freight and other charges in connection
with the shipment of the Fund's portfolio securities; fees and expenses of
non-interested directors or non-interested members of any advisory or investment
board, committee or panel of the Fund; fees and expenses of any officers and
interested directors of the Fund who are not affiliated with the Investment
Manager, the Administrator or their respective affiliates; travel expenses or an
appropriate portion thereof of directors and officers of the Fund, or members of
any advisory or investment board, committee or panel of the Fund, to the extent
that such expenses relate to attendance at meetings of the Board of Directors or
any committee thereof, or of any such advisory or investment board, committee or
panel; salaries of shareholder relations personnel; costs of shareholders
meetings; insurance; interest; brokerage costs; and litigation and other
extraordinary or non-recurring expenses.

3. TRANSACTIONS WITH AFFILIATES. The Investment Manager is authorized
on behalf of the Fund, from time to time when deemed to be in the best interests
of the Fund and to the extent permitted by applicable law, to purchase and/or
sell securities in which the Investment Manager or any of its affiliates
underwrites, deals in and/or makes a market and/or may perform or seek to
perform investment banking services for issuers of such securities. The
Investment Manager is further authorized, to the extent permitted by applicable
law, to select brokers (including any brokers affiliated with the Investment
Manager) for the execution of trades for the Fund.

4. BEST EXECUTION; RESEARCH SERVICES. The Investment Manager is
authorized, for the purchase and sale of the Fund's portfolio services, to
employ such dealers and brokers as may, in the judgment of the Investment
Manager, implement the policy of the Fund to obtain the best results taking into
account such factors as price, including dealer spread, the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Investment Manager is authorized to
direct the execution of the Fund's portfolio transactions to dealers and brokers
furnishing statistical information or research deemed by the Investment Manager
to be useful or valuable to the performance of its investment advisory functions
for the Fund. It is understood that in these circumstances, as contemplated by
Section 28(e) of the Securities Exchange Act of 1934, the commissions paid may
be higher than those which the Fund might otherwise have paid to another broker
if those services had not been provided. Information so received will be in
addition to and not in lieu of the services required to be performed by the
Investment Manager. It is understood that the expenses of the Investment Manager
will not necessarily be reduced as a result of the receipt of such information
or research. Research services furnished to the Investment Manager by brokers
who effect securities transactions for the Fund may be used by the Investment
Manager in servicing other investment companies and accounts which it manages.
Similarly, research services furnished to the Investment Manager by brokers who
effect securities transactions for other investment companies and accounts which
the Investment Manager manages may be used by the Investment Manager in
servicing the Fund. It is understood that not all of these research services are
used by the Investment Manager in managing any particular account, including the
Fund.

A-2

5. REMUNERATION. In consideration of the services to be rendered by the
Investment Manager under this Agreement, the Fund shall pay the Investment
Manager a monthly fee in United States dollars for the previous month at an
annual rate of one (1.00%) percent of the Fund's average weekly net assets. If
the fee payable to the Investment Manager pursuant to this paragraph 5 begins to
accrue before the end of any month or if this Agreement terminates before the
end of any month, the fee for the period from such date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs. For purposes of
calculating each such monthly fee, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the Registration Statement.

6. REPRESENTATIONS AND WARRANTIES. The Investment Manager represents
and warrants that it is duly registered and authorized as an investment adviser
under the Investment Advisers Act of 1940, as amended, and the Investment
Manager agrees to maintain effective all requisite registrations, authorizations
and licenses, as the case may be, until the termination of this Agreement.

7. SERVICES NOT DEEMED EXCLUSIVE. The services provided hereunder by
the Investment Manager are not to be deemed exclusive and the Investment Manager
and any of its affiliates or related persons are free to render similar services
to other and to use the research developed in connection with this Agreement for
other clients or affiliates. Nothing herein shall be construed as constituting
the Investment Manager an agent of the Fund.

8. LIMIT OF LIABILITY. The Investment Manager shall exercise its best
judgment in rendering the services in accordance with the terms of this
Agreement. The Investment Manager shall not be liable for any error of judgment
or mistake of law or for any act or omission or any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Investment
Manager against any liability to the Fund or its shareholders to which the
Investment Manager would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this Agreement
("disabling conduct"). The Fund will indemnify the Investment Manager against,
and hold it harmless from, any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses), including any amounts
paid in satisfaction of judgments, in compromise or as fines or penalties, not
resulting from disabling conduct by the Investment Manager. Indemnification

A-3

shall be made only following: (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Investment Manager
was not liable by reason of disabling conduct, or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Manager was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding ("disinterested non-party
directors"), or (b) an independent legal counsel in a written opinion. The
Investment Manager shall be entitled to advances from the Fund for payment of
the reasonable expenses (including reasonable counsel fees and expenses)
incurred by it in connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent permissible under law.
Prior to any such advance, the Investment Manager shall provide to the Fund a
written affirmation of its good faith belief that the standard conduct necessary
for indemnification by the Fund has been met and a written undertaking to repay
any such advance if it should ultimately be determined that the standard of
conduct has not been met. In addition, at least one of the following additional
conditions shall be met: (a) the Investment Manager shall provide a security in
form and amount acceptable to the Fund for its undertaking; (b) the Fund is
insured against losses arising by reason of the advance; or (c) a majority of a
quorum of disinterested non-party directors, or independent legal counsel, in a
written opinion, shall have determined, based on a review of facts readily
available to the Fund at the time the advance is proposed to be made, that there
is reason to believe that the Investment Manager will ultimately be found to be
entitled to indemnification.

9. DURATION AND TERMINATION. This Agreement shall have an intial term
beginning April 1, 2001 and ending on March 31, 2003, subject to stockholder
ratification, and then shall continue in effect thereafter for successive annual
periods, but only so long as such continuance is specifically approved at least
annually by the affirmative vote of (i) a majority of the members of the Fund's
Board of Directors who are not parties to this Agreement or "interested persons"
(as defined in the Investment Company Act of 1940 (the "1940 Act")) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) the Fund's Board of Directors or the holders of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the Fund.

Notwithstanding the above, this Agreement (a) may nevertheless
be terminated at any time, without penalty, by the Fund's Board of Directors, by
vote of holders of a majority of the outstanding voting securities (as defined
in the 1940 Act) of the Fund or by the Investment Manager, upon sixty (60) days'
written notice delivered to each party hereto, and (b) shall automatically be
terminated in the event of its assignment (as defined in the 1940 Act). Any such
notice shall be deemed given when received by the addressee.

10. GOVERNING LAW. This Agreement shall be governed, construed and
interpreted in accordance with the laws of the State of New York, provided,
however, that nothing herein shall be construed as being inconsistent with the
1940 Act.

11. NOTICES. Any notice hereunder shall be in writing and shall be
delivered in person or by telex or facsimile (followed by delivery in person) to
the parties at the addresses set forth below:

A-4

IF TO THE FUND:
--------------

CLEMENTE STRATEGIC VALUE FUND, INC.
c/o Cornerstone Advisors, Inc.
One West Pack Square
Suite 750
Asheville, North Carolina 28801
Attention: Mr. Ralph W. Bradshaw
Telephone No.: (828) 255-4833
Fax No.: (828) 210-8183

IF TO THE INVESTMENT MANAGER:
----------------------------

CORNERSTONE ADVISORS, INC
One West Pack Square
Suite 750
Asheville, North Carolina 28801
Attention: Mr. Gary A. Bentz
Telephone No.: (828) 255-4831
Fax No.: (828) 210-8183

or to such other address as to which the recipient shall have informed
the other party in writing.

Unless specifically provided elsewhere, notice given as
provided above shall be deemed to have been given, if by personal delivery, on
the day of such delivery, and, if by facsimile and mail, on the date on which
such facsimile or mail is sent.

12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

A-5

IN WITNESS WHEREOF, the parties hereto caused their duly authorized
signatories to execute this Agreement as of the day and year first written
above.

CLEMENTE STRATEGIC VALUE FUND, INC.

By: /S/ RALPH W. BRADSHAW
---------------------------------
Name: Ralph W. Bradshaw
Title: Chairman of the Board

CORNERSTONE ADVISORS, INC

By: /S/ GARY A. BENTZ
---------------------------------
Name: Gary A. Bentz
Title: Vice President

A-6

PROXY STATEMENT APPENDIX B

AUDIT COMMITTEE CHARTER

CLEMENTE STRATEGIC VALUE FUND, INC.

ORGANIZATION

The members of the Audit Committee of the Board of Directors
("Directors") of Clemente Strategic Value Fund, Inc., a closed-end registered
investment company (the "Fund") are selected by the full Board of Directors. The
members of the Audit Committee shall consist of not less than three persons
(except as otherwise provided below) who are not "interested persons" (as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended)
of the Fund and who are "independent" within the meaning of the audit committee
rules of any securities exchange on which the Fund's shares are listed for
trading. Each member of the Audit Committee shall be financially literate, as
such qualification is interpreted by the Board of Directors in its business
judgment, or must become financially literate within a reasonable period of time
after his appointment to the Audit Committee. At least one member of the Audit
Committee must have accounting or related financial management expertise, as the
Board of Directors interprets such qualification in its business judgment. In
the event that the Fund currently has less than three members on its Audit
Committee it must have three members not later than June 14, 2001.

STATEMENT OF POLICY

The Fund's Audit Committee oversees the financial reporting process for
the Fund. The Fund's Board and its Audit Committee recognize that they are the
shareholders' representatives, that the auditors are ultimately accountable to
the Board of Directors and the Audit Committee and that the Board of Directors
and the Audit Committee have the authority and responsibility to select,
evaluate and, where appropriate, recommend to shareholders the selection or
replacement of the outside auditors.

The Fund's Audit Committee shall monitor the process for the Fund's
valuation of portfolio assets. This is key to providing shareholders and
regulators adequate, meaningful information for decision making. Members of the
Fund's Audit Committee must have a general understanding regarding the
accounting process and the control structure in place for the Fund. Open
communication with management and the independent auditors is essential.

This Charter shall be reviewed annually by the Board of the Fund.

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RESPONSIBILITIES OF THE AUDIT COMMITTEE

In order to provide reasonable flexibility, the following listed
Committee responsibilities are described in broad terms:

-- The Audit Committee's role is clearly one of oversight and review and not
of direct management of the audit process. The Fund's Board and Audit
Committee note that the outside auditors are ultimately accountable to the
Board and the Audit Committee.

-- The Audit Committee members are responsible for a general understanding of
the Fund's accounting systems and controls.

-- Committee members shall periodically evaluate the independent audit firm's
performance and the costs of its services. The Audit Committee will make
recommendations to the full Board of Directors regarding the selection of
the independent audit firm. The Committee shall request from the
independent auditors periodically a formal written statement (1)
delineating all relationships between the auditors and the Fund, its
investment adviser and their corporate affiliates and including disclosures
regarding the auditors' independence required by Independence Standards
Board Standard No. 1, as may be modified or supplemented, and (2)
certifying that, in the view of the auditors, they are independent public
accountants with respect to the Fund within the meaning of the Securities
Act of 1933, as amended, and the applicable rules and regulations
thereunder. The Audit Committee is responsible for actively engaging in a
dialogue with the auditors with respect to any disclosed relationships or
services that may affect the objectivity and independence of the auditors,
and for recommending that the full Board take appropriate steps, if any, in
response to the auditors' response to satisfy itself of the independence of
the auditors.

-- The Fund's Audit Committee is responsible for reviewing the scope of the
audit proposed by the Fund's independent auditors.

-- The Fund's Audit Committee is responsible for recording minutes of its
meetings and reporting significant matters to the full Board of Directors.
The Audit Committee, shall meet no less frequently than annually and
receive information (as necessary) from, among others, the Fund's
investment advisor or its counsel and Fund counsel, in addition to the
auditors, in order to be informed about legal and accounting issues having
the possibility of affecting the financial reporting process. This would
include items of industry-wide importance and internal issues such as
litigation.

-- The Fund's Audit Committee is responsible for (i) reviewing and discussing
with management and the auditors the Fund's audited financial statements;
and (ii) discussing with the auditors the matters required to be discussed
by Statement on Auditing Standards No. 61, as may be modified or
supplemented. The Audit Committee shall confirm that the independent
auditors are satisfied with the disclosure and content of the Fund's
audited financial statements and shall advise the Board of Directors with
respect to its recommendation as to the inclusion of the Fund's audited
financial statements in its Annual Report to Shareholders.

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-- In reviewing the activities of the independent auditors, the Fund's Audit
Committee shall consider the auditors' comments with respect to the
appropriateness and adequacy of the Fund's accounting policies, procedures
and principles.

-- The Audit Committee should take appropriate steps to keep apprised of
regulatory changes and new accounting pronouncements that affect net asset
value calculations and financial statement reporting requirements.

-- The Fund's Audit Committee shall review and reassess the adequacy of this
Charter on an annual basis.

EFFECTIVE DATE

This Audit Committee Charter shall be effective as of June 1, 2000. The
Audit Committee Charter was reapproved by the Fund's Board of Directors on
February 9, 2001.

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