<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 24, 1999
FILE NO. 2-71066
FILE NO. 811-2898
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 22 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 22 /X/
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THE VALUE LINE CASH FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
220 East 42nd Street
New York, New York 10017-5891
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's Telephone number, including Area Code: (212) 907-1500
David T. Henigson
Value Line, Inc.
220 East 42nd Street
New York, New York 10017-5891
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copy to:
Peter D. Lowenstein
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830
It is proposed that this filing will become effective (check
appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/X/ on May 3, 1999 pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
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<PAGE>
THE VALUE LINE CASH FUND, INC.
A MONEY MARKET MUTUAL FUND
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PROSPECTUS
MAY 3, 1999
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[LOGO]
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS, AND ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
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FUND SUMMARY
What are the Fund's goals? PAGE 2
What are the Fund's main investment strategies? PAGE
2
What are the main risks of investing in the Fund?
PAGE 2
How has the Fund performed? PAGE 3
What are the Fund's fees and expenses? PAGE 4
HOW WE MANAGE THE FUND
Our investment strategies PAGE 5
The risks of investing in the Fund PAGE 5
WHO MANAGES THE FUND
Investment Adviser PAGE 7
Management fees PAGE 7
Portfolio management PAGE 7
ABOUT YOUR ACCOUNT
How to buy shares PAGE 8
How to sell shares PAGE 10
Special services PAGE 12
Dividends, distributions and taxes PAGE 13
FINANCIAL HIGHLIGHTS
Financial Highlights PAGE 14
<PAGE>
FUND SUMMARY
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WHAT ARE THE FUND'S GOALS?
The Fund is a money market mutual fund whose primary
investment objective is to secure as high a level of current
income as is consistent with maintaining liquidity and
preserving capital. The Fund attempts to maintain a stable
net asset value of $1.00 per share. Although the Fund will
strive to achieve these goals, there is no assurance that it
will.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
To achieve the Fund's goals, we invest in short-term money
market instruments which we determine to be of high quality.
The Fund does not invest for the purpose of seeking capital
appreciation or gains. The Fund intends to keep the average
maturity of its holdings to 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Investing in any mutual fund involves risk. An investment in
the Fund is not a complete investment program and you should
consider it just one part of your total investment program.
AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY
BY INVESTING IN THE FUND. FOR A MORE COMPLETE DISCUSSION OF
RISK, PLEASE TURN TO PAGE 5.
2
<PAGE>
HOW HAS THE FUND PERFORMED?
This bar chart and table can help you evaluate the potential
risks of investing in the Fund. We show how returns for the
Fund's shares have varied over the past ten calendar years,
as well as the average annual returns of these shares for
one, five, and ten years all compared to the performance of
the Lipper Money Market Funds Average. The Fund's past
performance is not necessarily an indication of how it will
perform in the future.
YEAR BY YEAR RETURNS (%)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C>
1989 9.05%
1990 7.91%
1991 5.89%
1992 3.74%
1993 3.06%
1994 3.69%
1995 5.40%
1996 4.99%
1997 5.00%
1998 5.06%
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER: Q2 1989 2.35%
WORST QUARTER: Q1 1994 0.69%
</TABLE>
AVERAGE ANNUAL RETURN AS OF 12/31/98
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
- ---------------------------------------------------------------
FUND 5.06% 4.84% 5.37%
- ---------------------------------------------------------------
LIPPER MONEY MARKET FUNDS AVERAGE 4.86% 4.78% 5.22%
- ---------------------------------------------------------------
</TABLE>
The Fund's 7-day yield as of December 31, 1998 was 4.84%. The
current 7-day yield may be obtained from the Fund by calling
800-243-2739.
3
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
These tables describe the fees and expenses you pay in
connection with an investment in the Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
<S> <C>
- --------------------------------------------------------
MAXIMUM SALES CHARGES (LOAD) IMPOSED ON PURCHASES NONE
AS A PERCENTAGE OF OFFERING PRICE
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MAXIMUM DEFERRED SALES CHARGES (LOAD) AS A NONE
PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PRICE, WHICHEVER IS LOWER
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MAXIMUM SALES CHARGES (LOAD) IMPOSED ON REINVESTED
DIVIDENDS NONE
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REDEMPTION FEE NONE
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EXCHANGE FEE NONE
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MAXIMUM ACCOUNT FEE NONE
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</TABLE>
Annual Fund operating expenses are expenses that are deducted
from the Fund's assets.
ANNUAL FUND OPERATING EXPENSES (% OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
<S> <C>
- ---------------------------------------------------------
MANAGEMENT FEES 0.40%
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DISTRIBUTION AND SERVICE (12B-1) FEES NONE
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OTHER EXPENSES 0.17%
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TOTAL ANNUAL FUND OPERATING EXPENSES 0.57%
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</TABLE>
EXAMPLE
This example is intended to help you compare the cost of
investing in the Fund to the cost of investing in other
mutual funds. We show the cumulative amount of Fund expenses
on a hypothetical investment of $10,000 with an annual 5%
return over the time shown, assuming that the Fund's
operating expenses remain the same. This is an example only,
and does not represent future expenses, which may be greater
or less than those shown here.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C>
$58 $183 $318 $714
</TABLE>
4
<PAGE>
HOW WE MANAGE THE FUND
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OUR INVESTMENT STRATEGIES
We analyze economic and market conditions, seeking to
identify the securities that we think make the best
investments towards our objective of seeking as high a level
of current income as is consistent with presentation of
capital and liquidity.
THE TYPE OF SECURITIES IN WHICH WE INVEST
The Fund invests only in short-term instruments. To minimize
the effect of changing interest rates on the net asset value
of its shares, the Fund intends to keep the average maturity
of its holdings to 90 days or less. The Fund invests only in
those securities which are rated in the highest two
categories of a nationally recognized rating organization.
The following is a brief description of the types of
short-term instruments in which the Fund may invest:
U.S. Government Securities: includes U.S. Treasury bills,
notes and bonds, which are direct obligations of the U.S.
Treasury supported by the full faith and credit of the United
States as well as securities issued by agencies and
instrumentalities of the U.S. Government supported by the
right of the issuer to borrow from the U.S. Treasury or
supported only by the credit of the instrumentality.
Bank instruments: includes certificates of deposit and
bankers' acceptances.
Commercial paper: refers to short-term unsecured promissory
notes issued by corporations.
Asset backed securities: refers to an underlying pool of
assets such as credit card or automobile trade receivables or
corporate loans or bonds which backs these bonds and provides
the interest and principal payments to investors.
Corporate obligations: includes other short-term corporate
debt obligations.
THE RISKS OF INVESTING IN THE FUND
Investing in any mutual Fund involves risk, including the
risk that you may receive little or no return on your
investment. Therefore, before you invest in this Fund you
should carefully evaluate the risks. The chief risk that you
assume when investing in the Fund is interest rate risk, the
possibility that as
5
<PAGE>
interest rates rise the value of some fixed income securities
may decrease. Market risk is the risk that the securities in
a certain market will decline in value because of factors
such as economic conditions. Credit risk is the risk that any
of the Fund's holdings will have its credit rating downgraded
or will default, thereby reducing the Fund's income level and
share price. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency.
YEAR 2000 RISKS
Like other mutual funds, the Fund could be adversely affected
if the computer systems used by the Adviser and the Fund's
service providers do not properly process and calculate
date-related information and data after January 1, 2000. The
Adviser is working to avoid such problems and to obtain
assurances from service providers that they are taking
similar steps.
6
<PAGE>
WHO MANAGES THE FUND
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The business and affairs of the Fund are managed by the
Fund's officers under the direction of the Fund's Board of
Directors.
INVESTMENT ADVISER
Value Line, Inc. serves as the Fund's investment adviser and
manages the Fund's business affairs. Value Line also acts as
investment adviser to the other Value Line mutual funds and
furnishes investment counseling services to private and
institutional clients with combined assets of over $5
billion.
The Adviser was organized in 1982 and is the successor to
substantially all of the operations of Arnold Bernhard & Co.,
Inc. which with its predecessor had been in business since
1931. Value Line Securities, Inc., the Fund's distributor, is
a subsidiary of the Adviser. Another subsidiary of the
Adviser publishes The Value Line Investment Survey and other
publications.
MANAGEMENT FEES
For managing the Fund and its investments, the Adviser is
paid a yearly fee of 0.40% of the Fund's average daily net
assets.
PORTFOLIO MANAGEMENT
A committee of employees of the Investment Adviser is jointly
and primarily responsible for the day-to-day management of
the Fund's portfolio.
7
<PAGE>
ABOUT YOUR ACCOUNT
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HOW TO BUY SHARES
/ / BY WIRE
If you are making an initial purchase by wire, you must call
us at 800-243-2729 so we can assign you an account number.
Request your bank to wire the amount you want to invest to
State Street Bank and Trust Company, ABA #011000028,
attention DDA # 99049868. Include your name, account number,
tax identification number and the name of the Fund in which
you want to invest.
/ / THROUGH A BROKER-DEALER
You can open an account and buy shares through a
broker-dealer, who may charge a fee for this service.
/ / BY MAIL
Complete the Account Application and mail it with your check
payable to NFDS, Agent, to Value Line Funds, c/o National
Financial Data Services, Inc., P.O. Box 419729, Kansas City,
MO 64141-6729. If you are making an initial purchase by mail,
you must include a completed Account Application, or an
appropriate retirement plan application if you are opening a
retirement account, with your check.
/ / MINIMUM/ADDITIONAL INVESTMENTS
Once you have completed an application, you can open an
account with an initial investment of $1,000, and make
additional investments at any time for as little as $100.
/ / TIME OF PURCHASE
If we or an authorized agent receives your order before the
close of regular trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time) on a business day, you
will pay that day's closing share price which is based
8
<PAGE>
on the Fund's net asset value. The net asset value per share
will normally remain fixed at $1.00 per share. If we receive
your order after the close of trading, you will pay the next
business day's price. Newly-purchased shares will begin to
accrue dividends on the business day after the Fund receives
Federal Funds from your purchase payment. A payment by check
is normally converted to Federal Funds within two business
days following receipt by the Fund. A business day is any day
that the New York Stock Exchange is open for business. We
reserve the right to reject any purchase order and to waive
the initial and subsequent investment minimums at any time.
/ / NET ASSET VALUE
We determine the Fund's net asset value (NAV) per share as of
the close of regular trading on the New York Stock Exchange
each day that exchange is open for business. We calculate NAV
by adding the market value of all the securities and assets
in the Fund's portfolio, deducting all liabilities, and
dividing the resulting number by the number of shares
outstanding. The result is the net asset value per share. The
securities held by the Fund are valued on the basis of
amortized cost which does not take into account unrealized
capital gains or losses. This involves valuing an instrument
at cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the
instrument. It is the policy of the Fund to attempt to
maintain a net asset value of $1.00 per share.
9
<PAGE>
HOW TO SELL SHARES
/ / BY MAIL
You can redeem your shares (sell them back to the Fund) by
mail by writing to: Value Line Funds, c/o National Financial
Data Services, Inc., P.O. Box 419729, Kansas City, MO
64141-6729. The request must be signed by all owners of the
account, and you must include a signature guarantee for each
owner. Signature guarantees are also required when redemption
proceeds are going to anyone other than the account holder(s)
of record. If you hold your shares in certificates, you must
submit the certificates properly endorsed with signature
guaranteed with your request to sell the shares. A signature
guarantee can be obtained from most banks or securities
dealers, but not from a notary public. A signature guarantee
helps protect against fraud.
/ / BY TELEPHONE OR WIRE
You can sell $1,000 or more of your shares by telephone or
wire, with the proceeds sent to your bank the next business
day after we receive your request.
/ / BY CHECK
You can sell $500 or more of your shares by writing a check
payable to the order of any person.
/ / THROUGH A BROKER-DEALER
You may sell your shares through a broker-dealer, who may
charge a fee for this service.
The Fund has authorized brokers to accept purchase and
redemption orders on behalf of the Fund. The Fund has also
authorized these brokers to designate others to accept
purchase and redemption orders on behalf of the Fund.
We treat any order to buy or sell shares that you place with
one of these brokers, or anyone they have designated, as if
you had placed it directly with the Fund. The shares that you
buy or sell through brokers or anyone they have designated
are priced at the next net asset value that is computed after
they accept your order.
10
<PAGE>
/ / BY EXCHANGE
You can exchange all or part of your investment in the Fund
for shares in other Value Line funds. You may have to pay
taxes on your exchange. When you exchange shares, you are
purchasing shares in another fund so you should be sure to
get a copy of that fund's prospectus and read it carefully
before buying shares through an exchange. To execute an
exchange, call 800-243-2729.
When you send us a properly completed request to sell or
exchange shares, you will receive the net asset value as
determined on the business day we receive your request. You
may have to pay taxes on the gain from your sale of shares.
We will pay you promptly, normally the next business day, but
no later than seven days after we receive your request to
sell your shares. If you purchased your shares by check, we
will wait until your check has cleared, which can take up to
15 days, before we send the proceeds to you.
ACCOUNT MINIMUM
If as a result of redemption your account balance falls below
$500, the Fund may ask you to increase your balance within 30
days. If your account is not at the minimum by the required
time, the Fund may redeem your account, after first notifying
you in writing.
11
<PAGE>
SPECIAL SERVICES
To help make investing with us as easy as possible, and to
help you build your investments, we offer the following
special services. You can get further information about these
programs by calling Shareholder Services at 800-223-0818.
/ / Valu-Matic-Registered Trademark- allows you to make
regular monthly investments of $25 or more automatically
from your checking account.
/ / Through our Systematic Cash Withdrawal Plan you can
arrange a regular monthly or quarterly payment from your
account payable to you or someone you designate. If your
account is $5,000 or more, you can have monthly or
quarterly withdrawals of $25 or more.
/ / You may buy shares in the Fund for your individual or
group retirement plan, including your Regular or Roth
IRA. You may establish your IRA account even if you
already are a member of an employer-sponsored retirement
plan. Not all contributions to an IRA account are tax
deductible; consult your tax advisor about the tax
consequences of your contribution.
12
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund earns interest daily on its investments and
distributes the income daily. Any capital gains that it has
realized are distributed annually. We automatically reinvest
all dividends and any capital gains, unless you instruct us
otherwise in your application to purchase shares.
Tax laws are subject to change, so we urge you to consult
your tax adviser about your particular tax situation and how
it might be affected by current tax law. The tax status of
your dividends from the Fund is not affected by whether you
reinvest your dividends or receive them in cash. Dividends
paid by the Fund from short-term capital gains and net
investment income are generally taxable as ordinary income.
Because the Fund is not expected to have long term capital
gains, we do not expect any of the Fund's distributions or
dividends to be taxable as long-term capital gains. You may
be subject to state and local taxes on distributions.
We will send you a statement by January 31 each year
detailing the amount and nature of all dividends and capital
gains that you were paid during the prior year.
13
<PAGE>
FINANCIAL HIGHLIGHTS
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The financial highlights table is intended to help you
understand the Fund's financial performance for the past five
years. Certain information reflects financial results for a
single Fund share. The total returns in the table represent
the rate that an investor would have earned or lost on an
investment in the Fund assuming reinvestment of all dividends
and distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the
Fund's financial statements, is included in the Fund's annual
report, which is available upon request by calling
800-223-0818.
FINANCIAL HIGHLIGHTS
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<TABLE>
<S> <C> <C> <C> <C> <C>
SELECTED DATA FOR A SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH YEAR:
YEAR ENDED DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
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NET ASSET VALUE, BEGINNING OF YEAR $1.000 $1.000 $1.000 $1.000 $1.000
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INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .051 .051 .050 .054 .037
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Net realized loss on securities -- -- -- -- (.005)
Voluntary capital contribution
from Adviser -- -- -- -- .005
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LESS DISTRIBUTIONS:
Dividends from net
investment income (.051) (.051) (.050) (.054) (.037)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.000 $1.000 $1.000 $1.000 $1.000
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TOTAL RETURN 5.06% 5.10% 5.00% 5.40% 3.69%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $317,311 $303,094 $361,797 $359,343 $ 341,632
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Ratio of expenses to average net
assets .57% .59% .55% .57% .61%
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Ratio of net income to average net
assets 4.93% 4.97% 4.86% 5.27% 3.63%
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</TABLE>
(1) The total return for 1994 reflects the effect of a
voluntary capital contribution from the Adviser. Without
such contribution the total return would have been 3.18%.
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14
<PAGE>
FOR MORE INFORMATION
Additional information about the Fund's investments is
available in the Fund's annual and semi-annual reports to
shareholders. You can find more detailed information about
the Fund in the current Statement of Additional Information
dated May 3, 1999, which we have filed electronically with
the Securities and Exchange Commission (SEC) and which is
legally a part of this prospectus. If you want a free copy of
the Statement of Additional Information, the annual or
semi-annual report, or if you have any questions about
investing in this Fund, you can write to us at 220 East 42nd
Street, New York, NY 10017-5891 or call toll-free
800-223-0818. You may also obtain the prospectus at no cost
from our Internet site at http://www.valueline.com.
You can find reports and other information about the Fund on
the SEC Web site (http://www.sec.gov), or you can get copies
of this information, after payment of a duplicating fee, by
writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Fund,
including its Statement of Additional Information, can be
reviewed and copied at the Securities and Exchange
Commission's Public Reference Room in Washington, D.C. You
can get information on operation of the public reference room
by calling the SEC at 1-800-SEC-0330.
<TABLE>
<S> <C>
INVESTMENT ADVISER SERVICE AGENT
Value Line, Inc. State Street Bank and Trust Company
220 East 42nd Street c/o NFDS
New York, NY 10017-5891 P.O. Box 419729
Kansas City, MO 64141-6729
CUSTODIAN DISTRIBUTOR
State Street Bank and Trust Company Value Line Securities, Inc.
225 Franklin Street 220 East 42nd Street
Boston, MA 02110 New York, NY 10017-5891
</TABLE>
<TABLE>
<S> <C>
Value Line Securities, Inc.
220 East 42nd Street, New York, NY 10017-5891 File no. 811-612
</TABLE>
<PAGE>
THE VALUE LINE CASH FUND, INC.
220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818 or 1-800-243-2729
www.valueline.com
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STATEMENT OF ADDITIONAL INFORMATION
MAY 3, 1999
- -------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of The Value Line Cash Fund, Inc. dated
May 3, 1999, a copy of which may be obtained without charge by writing or
telephoning the Fund. The financial statements, accompanying notes and report of
independent auditors appearing in the Fund's 1998 Annual Report to Shareholders
are incorporated by reference in this Statement. A copy of the Annual Report is
available from the Fund upon request and without charge by calling 800-223-0818.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Description of the Fund and Its Investments and Risks............................... B-2
Management of the Fund.............................................................. B-5
Investment Advisory and Other Services.............................................. B-7
Brokerage Arrangements.............................................................. B-8
Capital Stock....................................................................... B-9
Purchase, Redemption and Pricing of Shares.......................................... B-9
Taxes............................................................................... B-10
Determination of Yield.............................................................. B-11
Financial Statements................................................................ B-11
Appendix............................................................................ B-12
</TABLE>
B-1
<PAGE>
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
CLASSIFICATION. The Fund is an open-end, diversified management investment
company incorporated in Maryland in 1979. The Fund's investment adviser is Value
Line, Inc. (the "Adviser").
INVESTMENT STRATEGIES AND RISKS. The Fund's investment objective is to seek
as high a level of current income as is consistent with preservation of capital
and liquidity. There can be no assurance that the Fund will achieve its
investment objective.
The Fund invests only in short-term instruments (maturing in 397 days or
less) and primarily invests in:
(1)U.S. government obligations such as U.S. Treasury bills, notes or bonds,
and obligations of agencies or instrumentalities of the U.S. government
such as the Federal Home Loan Banks, the Federal Land Banks, or the
Federal National Mortgage Association.
(2)Obligations (including certificates of deposit and bankers acceptances)
of: (a) banks or savings and loan associations subject to regulation by
the U.S. government (including foreign branches of such banks), generally
limited to institutions with a net worth of at least $100 million and to
banks where the bank or its holding company carries a Value Line
financial strength rating of at least "A" (the third highest of nine
rating groups) or (b) U.S. branches of foreign banks, limited to
institutions having total assets of not less than $1 billion or its
equivalent.
(3)Instruments fully secured or collateralized by the type of obligation
described in the preceding paragraphs.
(4)Commercial paper issued by corporations maturing within 397 days from the
day of purchase and rated Prime-2 or better by Moody's Investors Service,
Inc. ("Moody's") or A-2 or better by Standard & Poor's Corporation
("Standard & Poor's"), or issued by corporations having unsecured debt
outstanding which is rated at least Aa by Moody's or AA by Standard &
Poor's.
(5)Asset backed securities in which an underlying pool of assets such as
credit card or automobile trade receivables or corporate loans or bonds
backs these bonds and provides the interest and principal payments to
investors.
(6)Other debt instruments issued by corporations maturing within 397 days
from the day of purchase and rated at least Aa by Moody's or AA by
Standard & Poor's.
See the Appendix for an explanation of the Value Line, Moody's and Standard
& Poor's ratings.
The Fund may also purchase variable or floating rate instruments with
periodic demand features referred to as "liquidity puts."
The Fund will limit its portfolio investments to U.S. dollar denominated
instruments that its Board of Directors determines present minimal credit risks
and which are "Eligible Securities" at the time of acquisition. The term
Eligible Securities includes securities rated by the Requisite NRSROs in one of
the two highest short-term rating categories (highest rating is "First Tier
Securities"), securities of issuers that have received such rating with respect
to other short-term debt securities and comparable unrated securities.
"Requisite NRSROs" means (a) any two nationally recognized statistical
B-2
<PAGE>
rating organizations ("NRSROs") that have issued a rating with respect to a
security or class of debt obligations of an issuer, or (b) one NRSRO, if only
one NRSRO has issued a rating with respect to such security or issuer at the
time the Fund purchases the security.
The Fund may not invest more than 5% of its total assets in the securities
of any one issuer, except for obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. In addition, the Fund may not
invest more than 5% of its total assets in Eligible Securities that have not
received the highest rating from the Requisite NRSROs and unrated securities of
comparable quality ("Second Tier Securities"). Futhermore, the Fund may not
invest more than the greater of 1% of its total assets or $1 million in the
Second Tier Securities of any one issuer.
Investments in obligations of a foreign branch of a U.S. bank and in U.S.
branches of a foreign bank may subject the Fund to additional investment risks.
These risks may include international and political developments, foreign
government restrictions, foreign withholding taxes or possible seizure or
nationalization of foreign deposits. In addition, foreign branches of domestic
banks and foreign banks are not necessarily subject to the same regulatory
requirements that apply to domestic banks, such as reserve requirements, loan
limitations, examinations, accounting and record keeping.
The Adviser uses its best judgment in selecting investments, taking into
consideration rates, terms and marketability of obligations as well as the
capitalization, earnings, liquidity and other indicators of the financial
condition of their issuers in arriving at investment decisions. Due to
fluctuations in the interest rates, the market value of the securities in the
portfolio may vary during the period of the shareholder's investment in the
Fund. To minimize the effect of changing interest rates on the net asset value
of its shares, the Fund intends to keep the average maturity of its holdings to
90 days or less.
REPURCHASE AGREEMENTS. The Fund may invest temporary cash balances in
repurchase agreements. A repurchase agreement involves a sale of securities to
the Fund, with the concurrent agreement of the seller (a member bank of the
Federal Reserve System or a securities dealer which the Adviser believes to be
financially sound) to repurchase the securities at the same price plus an amount
equal to an agreed-upon interest rate, within a specified time, usually less
than one week, but, on occasion, at a later time. The Fund will make payment for
such securities only upon physical delivery or evidence of book-entry transfer
to the account of the custodian or a bank acting as agent for the Fund.
Repurchase agreements may also be viewed as loans made by the Fund which are
collateralized by the securities subject to repurchase. The value of the
underlying securities will be at least equal at all times to the total amount of
the repurchase obligation, including the interest factor. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying securities and
losses, including: (a) possible decline in the value of the underlying security
during the period while the Fund seeks to enforce its rights thereto; (b)
possible subnormal levels of income and lack of access to income during this
period; and (c) expenses of enforcing its rights. The Fund has a fundamental
policy that it will not enter into repurchase agreements which will not mature
within seven days if any such investment, together with all other assets held by
the Fund which are not readily marketable, amounts to more than 10% of its total
assets. The Board of Directors monitors the creditworthiness of parties with
which the Fund enters into repurchase agreements.
B-3
<PAGE>
YEAR 2000. Like other mutual funds, the Fund could be adversely affected if
the computer systems used by the Adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Adviser
is taking steps that it believes are reasonably designed to address the Year
2000 Problem with respect to the computer systems that it uses and to obtain
satisfactory assurances that comparable steps are being taken by the Fund's
other major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact to the Fund.
The Year 2000 Problem is expected to impact U.S. Government agencies and
instrumentalities and corporations, which may include issuers of portfolio
securities held by the Fund, to varying degrees based upon various factors,
including, but not limited to, the corporation's industry sector and degree of
technological sophistication. The Fund is unable to predict what impact, if any,
the Year 2000 Problem will have on issuers of the portfolio securities held by
the Fund.
FUND POLICIES.
(i)
The Fund may not issue senior securities except evidences of
indebtedness permitted under clause (ii) below.
(ii)
The Fund may not borrow money in excess of 10% of the value of its
assets and then only as a temporary measure to meet unusually heavy
redemption requests or for other extraordinary or emergency purposes or
mortgage, pledge or hypothecate any assets except as may be necessary in
connection with such borrowings. Securities will not be purchased while
borrowings are outstanding.
(iii)
The Fund may not engage in the underwriting of securities of other
issuers.
(iv)
The Fund may not invest 25% or more of its assets in securities of
issuers in any one industry.
(v)
The Fund may not purchase securities of other investment companies
or invest in real estate, mortgages or illiquid securities of real
estate investment trusts although the Fund may purchase securities of
issuers which engage in real estate operations.
(vi)
The Fund may not lend money except in connection with the purchase
of debt obligations or by investment in repurchase agreements,
provided that repurchase agreements maturing in more than seven days when
taken together with other illiquid investments do not exceed 10% of the
Fund's assets.
(vii)
The Fund may not engage in arbitrage transactions, short sales,
purchases on margin or participate on a joint or joint and several
basis in any trading account in securities.
(viii)
The Fund may not purchase oil, gas, or other mineral exploration or
development programs.
(ix)
The Fund may not purchase more than 10% of the outstanding debt
securities of any one issuer. This restriction does not apply to
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
(x)
The Fund may not invest more than 5% of its total assets in
securities of issuers having a record, together with their
predecessors, of less than three years of continuous operation. This
restriction does not apply to any obligation issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
B-4
<PAGE>
(xi)
The Fund may not purchase securities for the purpose of exercising
control over another company.
(xii)
The Fund may not invest in commodities or commodity contracts.
(xiii)
The Fund may not purchase the securities of any issuer if, to the
knowledge of the Fund, those officers and directors of the Fund and
of the Adviser, who each owns more than 0.5% of the outstanding securities
of such issuer, together own more than 5% of such securities.
(xiv)
The primary investment objective of the Fund is to accrue as high a
level of current income as is consistent with liquidity and
preservation of capital.
The policies set forth above may not be changed without the affirmative vote
of the majority of the outstanding voting securities of the Fund which means the
lesser of (1) the holders of more than 50% of the outstanding shares of capital
stock of the Fund or (2) 67% of the shares present if more than 50% of the
shares are present at a meeting in person or by proxy.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed by the Fund's officers
under the direction of the Board of Directors. Set forth below is certain
information regarding the Directors and Officers of the Fund.
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------------------------- --------------------- ---------------------------------------------
<S> <C> <C>
*Jean Bernhard Buttner Chairman of the Board Chairman, President and Chief Executive
Age 64 of Directors and Officer of the Adviser and Value Line Pub-
President lishing, Inc. Chairman and President of the
Value Line Funds and Value Line Securities,
Inc. (the "Distributor"); Chairman and
President of each of the 15 Value Line Funds.
John W. Chandler Director Consultant, Academic Search Consultation
2801 New Mexico Ave., N.W. Service, Inc. Trustee Emeritus and Chairman
Washington, DC 20007 (1993-1994) of Duke University; President
Age 75 Emeritus, Williams College.
*Leo R. Futia Director Retired Chairman and Chief Executive Officer
201 Park Avenue South of The Guardian Life Insurance Company of
New York, NY 10003 America and Director since 1970. Director
Age 79 (Trustee) of The Guardian Insurance & Annuity
Company, Inc., Guardian Investor Services
Corporation and the Guardian-sponsored mutual
funds.
David H. Porter Director President Emeritus, Skidmore College since
813 North Broadway January 1, 1999; President, Skidmore College,
Saratoga Springs, NY 12866 1987-1998; Director of Adirondack Trust
Age 63 Company.
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------------------------- --------------------- ---------------------------------------------
<S> <C> <C>
Paul Craig Roberts Director Chairman, Institute for Political Economy;
505 S. Fairfax Street Director, A. Schulman Inc. (plastics).
Alexandria, VA 22320
Age 60
Nancy-Beth Sheerr Director Chairman, Radcliffe College Board of
1409 Beaumont Drive Trustees.
Gladwyne, PA 19035
Age 49
Nathan N. J. Grant Vice President Portfolio Manager with the Adviser since
Age 29 1996; Trader, Fixed Income Securities,
Blaylock & Partner, 1994-1996.
Christopher Coyle Vice President Portfolio Manager with the Adviser since
Age 28 1998; Securities Analyst with the Adviser
1996-1998; Credit Analyst, Bank One Corp.
David T. Henigson Vice President, Director, Vice President and Compliance
Age 41 Secretary and Officer of the Adviser. Director and Vice
Treasurer President of the Distributor. Vice Presi-
dent, Secretary and Treasurer of each of the
15 Value Line Funds.
</TABLE>
- --------------
* "Interested" director as defined in the Investment Company Act of 1940 (the
"1940 Act").
Unless otherwise indicated, the address for each of the above is 220 East 42nd
Street, New York, NY.
Directors of the Fund are also directors/trustees of 11 other Value Line
Funds.
The following table sets forth information regarding compensation of
Directors by the Fund and by the Fund and the eleven other Value Line Funds of
which each of the Directors is a director or trustee for the fiscal year ended
December 31, 1998. Directors who are officers or employees of the Adviser do not
receive any compensation from the Fund or any of the Value Line Funds.
COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
TOTAL
PENSION OR ESTIMATED COMPENSATION
RETIREMENT ANNUAL FROM FUND
AGGREGATE BENEFITS BENEFITS AND FUND
COMPENSATION ACCRUED AS PART UPON COMPLEX
NAME OF PERSONS FROM FUND OF FUND EXPENSES RETIREMENT (12 FUNDS)
- ------------------------------------------- --------------- ------------------ ----------- --------------
<S> <C> <C> <C> <C>
Jean B. Buttner $ -0- N/A N/A $ -0-
John W. Chandler 2,968 N/A N/A 35,620
Leo R. Futia 2,718 N/A N/A 32,620
David H. Porter 2,968 N/A N/A 35,620
Paul Craig Roberts 2,718 N/A N/A 32,620
Nancy-Beth Sheer 2,968 N/A N/A 35,620
</TABLE>
B-6
<PAGE>
As of February 5, 1999, no person owned of record or, to the knowledge of
the Fund, owned beneficially, 5% or more of the outstanding stock of the Fund
other than the Adviser and its affiliates, which owned an aggregate of
35,205,851 shares of record or approximately 10.3% and The Guardian Insurance &
Annuity Company, Inc., 3900 Burgess Place, Bethlehem, PA 18017, which owned
19,769,892 shares (approximately 5.8%). In addition, officers and directors of
the Fund as a group owned an aggregate of 7,876,250 or approximately 2.3% and
First Union National Bank as Trustee of the Value Line, Inc. Profit Sharing and
Savings Plan owned 9,263,000 shares or approximately 2.7%.
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund's investment adviser is Value Line, Inc. (the "Adviser"). Arnold
Bernhard & Co., Inc., 220 East 42nd Street, New York, NY 10017, a holding
company, owns approximately 81% of the outstanding shares of the Adviser's
common stock. Jean Bernhard Buttner, Chairman, President and Chief Executive
Officer of the Adviser and Chairman and President of the Fund, owns all of the
voting stock of Arnold Bernhard & Co., Inc.
The investment advisory agreement between the Fund and the Adviser, dated
August 10, 1988, provides for an advisory fee payable monthly at an annual rate
of 0.40% of the Fund's average daily net assets during the year. During 1996,
1997 and 1998, the Fund paid or accrued to the Adviser advisory fees of
$1,476,000, $1,298,567 and $1,284,721, respectively.
The investment advisory agreement provides that the Adviser shall render
investment advisory and other services to the Fund including, at its expense,
all administrative services, office space and the services of all officers and
employees of the Fund. The Fund pays all other expenses not assumed by the
Adviser including taxes, interest, brokerage commissions, insurance premiums,
fees and expenses of the custodian and shareholder servicing agents, legal and
accounting fees, fees and expenses in connection with qualification under
federal and state securities laws and costs of shareholder reports and proxy
materials. The Fund has agreed that it will use the words "Value Line" in its
name only so long as Value Line, Inc. serves as investment adviser to the Fund.
The agreement will terminate upon its assignment.
The Adviser acts as investment adviser to 14 other investment companies
constituting The Value Line Family of Funds and furnishes investment counseling
services to private and institutional accounts with combined assets in excess of
$5 billion.
Certain of the Adviser's clients may have investment objectives similar to
the Fund and certain investments may be appropriate for the Fund and for other
clients advised by the Adviser. From time to time, a particular security may be
bought or sold for only one client or in different amounts and at different
times for more than one but less than all such clients. In addition, a
particular security may be bought for one or more clients when one or more other
clients are selling such security, or purchases or sales of the same security
may be made for two or more clients at the same time. In such event, such
transactions, to the extent practicable, will be averaged as to price and
allocated as to amount in proportion to the amount of each order. In some cases,
this procedure could have a detrimental effect on the price or amount of the
securities purchased or sold by the Fund. In other cases, however, it is
believed that the ability of the Fund to participate, to the extent permitted by
law, in volume transactions will produce better results for the Fund.
The Adviser and/or its affiliates, officers, directors and employees may
from time to time own securities which are also held in the portfolio of the
Fund. The Adviser has imposed rules upon itself
B-7
<PAGE>
and such persons requiring monthly reports of security transactions for their
respective accounts and restricting trading in various types of securities in
order to avoid possible conflicts of interest. The Adviser may from time to
time, directly or through affiliates, enter into agreements to furnish for
compensation special research or financial services to companies, including
services in connection with acquisitions, mergers or financings. In the event
that such agreements are in effect with respect to issuers of securities held in
the portfolio of the Fund, specific reference to such agreements will be made in
the "Schedule of Investments" in shareholder reports of the Fund. As of the date
of this Statement of Additional Information no such agreements exist.
The Fund has entered into a distribution agreement with Value Line
Securities, Inc. (the "Distributor") whose address is 220 East 42nd Street, New
York, NY 10017, pursuant to which the Distributor acts as principal underwriter
and distributor of the Fund for the sale and distribution of its shares. The
Distributor is a wholly-owned subsidiary of the Adviser. For its services under
the agreement, the Distributor is not entitled to receive any compensation. The
Distributor also serves as distributor to the other Value Line funds. Jean
Bernhard Buttner is Chairman and President of the Distributor.
The Adviser has retained State Street Bank and Trust Company ("State
Street") to provide certain bookkeeping and accounting services for the Fund.
The Adviser pays State Street $32,400 per annum for each Value Line fund for
which State Street provides these services. State Street, whose address is 225
Franklin Street, Boston, MA 02110, also acts as the Fund's custodian, transfer
agent and dividend-paying agent. As custodian, State Street is responsible for
safeguarding the Fund's cash and securities, handling the receipt and delivery
of securities and collecting interest and dividends on the Fund's investments.
As transfer agent and dividend-paying agent, State Street effects transfers of
Fund shares by the registered owners and transmits payments for dividends and
distributions declared by the Fund. National Financial Data Services, Inc., a
State Street affiliate, whose address is 330 W. 9(th) Street, Kansas City, MO
64105, provides certain transfer agency functions to the Fund as an agent for
State Street. PricewaterhouseCoopers LLP, whose address is 1177 Avenue of the
Americas, New York, NY 10036, acts as the Fund's independent accountants and
also performs certain tax preparation services.
BROKERAGE ARRANGEMENTS
Since it is expected that most purchases made by the Fund will be principal
transactions at net prices, the Fund will incur little or no brokerage costs.
Purchases of portfolio securities from underwriters will include a commission or
concession paid by the issuer to the underwriter and purchases from dealers will
include the spread between the bid and asked prices. The Fund's policy is to
seek prompt execution at the most favorable prices. Transactions may be directed
to dealers in return for special research and statistical information, as well
as for services rendered by such dealers in the execution of orders. It is not
possible to place a dollar value on the special executions or on the research
services received by the Adviser from dealers effecting portfolio transactions.
While any such research services may allow the Adviser to supplement its own
research staffs of other securities firms, the Adviser has advised the Fund
that, in its opinion, the receipt of such research services from others will not
reduce its over-all expenses.
Since securities with maturities of less than one year are excluded from
required portfolio turnover rate calculations, the Fund's portfolio turnover
rate for reporting purposes will be zero.
B-8
<PAGE>
CAPITAL STOCK
Each share of the Fund's common stock, $.10 par value, has one vote with
fractional shares voting proportionately. Shares have no preemptive rights, are
freely transferable, are entitled to dividends as declared by the Directors and,
if the Fund were liquidated, would receive the net assets of the Fund.
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASES: Shares of the Fund are purchased at net asset value next calculated
after receipt of a purchase order. Minimum orders are $1,000 for an initial
purchase and $100 for each subsequent purchase. The Fund reserves the right to
reduce or waive the minimum purchase requirements in certain cases such as
pursuant to payroll deduction plans, etc., where subsequent and continuing
purchases are contemplated.
AUTOMATIC PURCHASES: The Fund offers a free service to its shareholders,
Valu-Matic, through which monthly investments of $25 or more may be made
automatically into the shareholder's Fund account. The required form to enroll
in this program is available upon request from the Distributor.
RETIREMENT PLANS: Shares of the Fund may be purchased as the investment medium
for various tax-sheltered retirement plans. Upon request, the Distributor will
provide information regarding eligibility and permissible contributions. Because
a retirement plan is designed to provide benefits in future years, it is
important that the investment objectives of the Fund be consistent with the
participant's retirement objectives. Premature withdrawals from a retirement
plan may result in adverse tax consequences. For more complete information,
contact Shareholder Services at 1-800-223-0818.
REDEMPTION: The right of redemption may be suspended, or the date of payment
postponed beyond the normal seven-day period, by the Fund under the following
conditions authorized by the 1940 Act: (1) For any period (a) during which the
New York Stock Exchange is closed, other than customary weekend and holiday
closing, or (b) during which trading on the New York Stock Exchange is
restricted; (2) For any period during which an emergency exists as a result of
which (a) disposal by the Fund of securities owned by it is not reasonably
practical, or (b) it is not reasonably practical for the Fund to determine the
fair value of its net assets; (3) For such other periods as the Securities and
Exchange Commission may by order permit for the protection of the Fund's
shareholders.
CALCULATION OF NET ASSET VALUE: The net asset value of the Fund's shares for
purposes of both purchases and redemptions is determined once daily as of the
close of regular trading on the New York Stock Exchange (generally 4:00 p.m.,
New York time) on each day that the New York Stock Exchange is open for trading
except on days on which no orders to purchase, sell or redeem Fund shares have
been received. The New York Stock Exchange is currently closed on New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and on the
preceding Friday or subsequent Monday if one of those days falls on a Saturday
or Sunday, respectively. The net asset value per share is determined by dividing
the total value of the investments and other assets of the Fund, less any
liabilities, by the total outstanding shares and adjusting the result to the
nearest full cent per share. The securities held by the Fund are valued on the
basis of amortized cost which does not take into account unrealized capital
gains or losses. This involves valuing an instrument at cost and thereafter
B-9
<PAGE>
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund would receive if it sold the instrument. Thus, if
the use of amortized cost by the Fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in the Fund would be able to
obtain a somewhat higher yield than would result from investment in a fund
utilizing solely market values, and existing investors in the Fund would receive
less investment income. The converse would apply in a period of rising interest
rates.
TAXES
The Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code"). The Fund so
qualified during the Fund's last fiscal year. By so qualifying, the Fund is not
subject to Federal income tax on its net investment income or net realized
capital gains which are distributed to shareholders (whether or not reinvested
in additional Fund shares).
The Code requires each regulated investment company to pay a nondeductible
4% excise tax to the extent the company does not distribute, during each
calendar year, 98% of its ordinary income, determined on a calendar year basis,
and 98% of its capital gains, determined, in general, on an October 31 year end,
plus certain undistributed amounts from previous years. The Fund anticipates
that it will make sufficient timely distributions to avoid imposition of the
excise tax.
All distributions, whether received in shares or cash, must be reported by
each shareholder on his Federal income tax return. Furthermore, under the Code,
dividends declared by the Fund in October, November or December of any calendar
year, and payable to shareholders of record in such a month, shall be deemed to
have been received by the shareholder on December 31 of such calendar year if
such dividend is actually paid in January of the following calendar year.
For shareholders who fail to furnish to the Fund their social security or
taxpayer identification numbers and certain related information or who fail to
certify that they are not subject to back-up withholding, dividends,
distributions of capital gains and redemption proceeds paid by the Fund will be
subject to a 31% Federal income tax withholding requirement. If the withholding
provisions are applicable, any such dividends or capital-gains distributions to
these shareholders, whether taken in cash or reinvested in additional shares,
and any redemption proceeds will be reduced by the amounts required to be
withheld.
The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents, domestic
corporations and partnerships, and certain trusts and estates) and is not
intended to be a complete discussion of all Federal tax consequences.
Shareholders are advised to consult with their tax advisers concerning the
application of Federal, state and local taxes to an investment in the Fund.
B-10
<PAGE>
DETERMINATION OF YIELD
The Fund will make available on each business day a "yield quotation", which
is a computation of the yield on its portfolio. The yield is calculated by
determining the net change in the value of a hypothetical preexisting account in
the Fund having a balance of one share at the beginning of a seven calendar day
period for which yield is to be quoted, dividing the net change by the value of
the account at the beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period return by 365/7). The
net change in the value of the account reflects the value of additional shares
purchased with dividends declared on the original share and any such additional
shares, but does not include realized gains and losses or unrealized
appreciation and depreciation. The Fund may also calculate an effective
annualized yield quotation computed on a compound basis by adding 1 to the base
period return (calculated as described above), raising that sum to a power equal
to 365 divided by 7, and subtracting 1.
Current yield will fluctuate from time to time and is not necessarily
representative of future results. Current yield information may be useful in
reviewing the Fund's performance, but because current yield will fluctuate such
information may not provide a basis for comparison with bank deposits, or other
investments which pay a fixed yield for a stated period of time. The kind and
quality of the instruments in the Fund's portfolio, its portfolio maturity, and
its operating expenses affect the current yield of the Fund. An investor's
principal is not guaranteed by the Fund.
Investors should recognize that in periods of declining interest rates the
Fund's yield will tend to be somewhat higher than prevailing market rates, and
in periods of rising interest rates the Fund's yield will tend to be somewhat
lower. Also, when interest rates are falling, the inflow of net new money to the
Fund from the continuous sale of its shares will likely be invested in portfolio
instruments producing lower yields than the balance of the Fund's portfolio,
thereby reducing the current yield of the Fund. In periods of rising interest
rates, the opposite can be expected to occur.
On occasion, the Fund may compare its yield to relevant indices, including
U.S., domestic and international taxable bond indices and data from Lipper
Analytical Services, Inc. or Standard & Poor's indices. From time to time,
evaluations of the Fund's performance by independent sources may also be used in
advertisements and in information furnished to present or prospective investors.
As with yield quotations, yield comparisons should not be considered as
representative of the Fund's yields for any future period. For the seven-day
period ended December 31, 1998, the yield for the Fund was 4.84%.
FINANCIAL STATEMENTS
The Fund's financial statements for the year ended December 31, 1998,
including the financial highlights for each of the five fiscal years in the
period ended December 31, 1998, appearing in the 1998 Annual Report to
Shareholders and the report thereon of PricewaterhouseCoopers LLP, independent
accountants, appearing therein, are incorporated by reference in this Statement
of Additional Information.
B-11
<PAGE>
APPENDIX
DESCRIPTION OF SHORT-TERM INSTRUMENTS
The types of instruments that form the major part of the Fund's investments
are described below:
U.S. GOVERNMENT AGENCY SECURITIES: Federal agency securities are debt
obligations which principally result from lending programs of the U.S.
government. Housing and agriculture have traditionally been the principal
beneficiaries of federal programs, and agencies involved in providing credit to
agriculture and housing account for the bulk of the outstanding debt securities.
U.S. TREASURY BILLS: U.S. Treasury bills are issued with maturities of any
period up to one year. Three-month bills are currently offered by the Treasury
on a 13-week cycle and are auctioned each week by the Treasury. Bills are sold
on a discount basis; the difference between the purchase price and the maturity
value (or the resale price if they are sold before maturity) constitutes the
interest income for the investor.
CERTIFICATES OF DEPOSIT: A certificate of deposit is a negotiable receipt
issued by a bank or savings and loan association in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus interest to the bearer
of the receipt on the date specified on the certificate.
COMMERCIAL PAPER: Commercial paper is generally defined as unsecured
short-term notes issued in bearer form by large well known corporations and
finance companies. Maturities on commercial paper range from a few days to nine
months. Commercial paper is also sold on a discount basis.
BANKERS' ACCEPTANCES: A bankers' acceptance generally arises from a
short-term credit arrangement designed to enable businesses to obtain funds to
finance commercial transactions. Generally, an acceptance is a time draft drawn
on a bank by an exporter or an importer to obtain a stated amount of funds to
pay for specific merchandise. The draft is then "accepted" by a bank that, in
effect, unconditionally guarantees to pay the face value of the instrument on
its maturity date.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
A Prime rating is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("Moody's"). Issuers rated Prime are further referred by
use of numbers 1, 2, and 3 to denote relative strength within this highest
classification. Among the factors considered by Moody's in assigning ratings are
the following: (1) evaluation of the management of the issuers; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer, and (8) recognition by management of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
Commercial paper rated A by Standard & Poor's corporation ("S&P") has the
following characteristics as determined by S&P: Liquidity ratios are better than
the industry average. Long-term senior debt rating is A or better. In some cases
BBB credits may be acceptable. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow have an upward trend with
allowances made for unusual circumstances. Typically, the issuer's industry is
B-12
<PAGE>
well established, the issuer has a strong position within its industry and the
reliability and quality of management is unquestioned. Issuers rated A are
further referred by use of numbers 1+, 1, 2 and 3 to denote relative strength
within the highest classification.
DESCRIPTION OF CORPORATE BOND RATINGS
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with bonds rated Aaa (Moody's highest rating) they comprise
what are generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear somewhat larger
than in Aaa securities.
Bonds rated AA by S&P are judged by S&P to be high-grade obligations, and,
in the majority of instances, to differ only in small degree from issues rated
AAA. Bonds rated AAA are considered by S&P to be highest grade obligations and
possess the ultimate degree of protection as to principal and interest. Here, as
with AAA bonds, prices move with the long-term money market.
DESCRIPTION OF VALUE LINE FINANCIAL STRENGTH RATINGS
A Value Line Financial Strength rating of A++, A+ or A indicates that the
company is within the financially strongest one-third among approximately 1,700
companies followed by The Value Line Investment Survey. The ratings are based
upon computer analysis of a number of key variables that determine (a) financial
leverage, (b) business risk and (c) company size plus the judgment of senior
analysts regarding factors that cannot be quantified across-the-board for all
stock. The primary variables that are indexed and studied include equity
coverage of debt, equity coverage of intangibles, "quick ratio", accounting
methods, variability of return, quality of fixed charge coverage, stock price
stability, and company size.
B-13
<PAGE>
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Articles of Incorporation, as amended.
(b) By-laws.
(c) Instruments Defining Rights of Security Holders. Reference is made to
Article Fifth of the Articles of Incorporation filed as Exhibit (a)
hereto.
(d) Investment Advisory Agreement.
(e) Distributor's Agreement.
(f) Not applicable.
(g) Custodian Agreement, as amended.
(h) Not applicable.
(i) Legal Opinion.
(j) Consent of independent accountants.
(k) Not applicable.
(l) Not applicable.
(m) Not applicable.
(27) Financial data schedule.
(o) Not applicable.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None
ITEM 25. INDEMNIFICATION.
Incorporated by reference to Article Seventh (7)(c) of the Articles of
Incorporation filed as Exhibit (a) hereto.
ITEM 26. BUSINESS OR OTHER CONNECTIONS OF INVESTMENT ADVISER.
Value Line, Inc., Registrant's investment adviser, acts as investment
adviser for a number of individuals, trusts, corporations and institutions, in
addition to the registered investment companies in the Value Line Family of
Funds listed in Item 27.
<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER OTHER EMPLOYMENT
- -------------------------- -------------------------------- ---------------------------------------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Board, President Chairman of the Board and Chief Executive Officer
and Chief Executive Officer of Arnold Bernhard & Co., Inc. and Chairman of the
Value Line Funds and the Distributor
Samuel Eisenstadt Senior Vice President and ---------------------------------------------
Director
David T. Henigson Vice President, Treasurer and Vice President and a Director of Arnold Bernhard &
Director Co., Inc. and the Distributor
Howard A. Brecher Vice President, Secretary and Vice President, Secretary, Treasurer and a Director
Director of Arnold Bernhard & Co., Inc.
Harold Bernard, Jr. Director Retired Administrative Law Judge
W. Scott Thomas Director Partner, Brobeck, Phleger & Harrison, attorneys,
One Market Plaza, San Francisco, CA 94105
Linda S. Wilson Director President, Radcliffe College, 10 Garden Street,
Cambridge, MA 02138
</TABLE>
C-1
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Value Line Securities, Inc., acts as principal underwriter for the
following Value Line funds, including the Registrant: The Value Line
Fund, Inc.; The Value Line Income Fund, Inc.; The Value Line Special
Situations Fund, Inc.; Value Line Leveraged Growth Investors, Inc.; The
Value Line Cash Fund, Inc.; Value Line U.S. Government Securities Fund,
Inc.; Value Line Centurion Fund, Inc.; The Value Line Tax Exempt Fund,
Inc.; Value Line Convertible Fund, Inc.; Value Line Aggressive Income
Trust; Value Line New York Tax Exempt Trust; Value Line Strategic Asset
Management Trust; Value Line Small-Cap Growth Fund, Inc.; Value Line
Asset Allocation Fund, Inc.; Value Line U.S. Multinational Company Fund,
Inc.
(b)
<TABLE>
<CAPTION>
(2)
POSITION AND (3)
(1) OFFICES POSITION AND
NAME AND PRINCIPAL WITH VALUE LINE OFFICES WITH
BUSINESS ADDRESS SECURITIES, INC. REGISTRANT
- ------------------------- ------------------ --------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Chairman of the
Board Board and President
David T. Henigson Vice President, Vice President,
Secretary, Secretary and
Treasurer and Treasurer
Director
Stephen LaRosa Asst. Vice Asst. Treasurer
President
</TABLE>
The business address of each of the officers and directors is 220 East
42nd Street, NY 10017-5891.
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
Value Line, Inc.
220 East 42nd Street
New York, NY 10017
For records pursuant to:
Rule 31a-1(b)(4),(5),(6),(7),(10),(11)
Rule 31a-1(f)
State Street Bank and Trust Company
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141
For records pursuant to Rule 31a-1(b)(2)(iv)
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
For all other records
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 30. UNDERTAKINGS.
None.
--------------
C-2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 22 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 12, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of The Value Line Cash Fund, Inc., which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Financial Statements" in the Statement of Additional
Information.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 22, 1999
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and State of New York, on
the 22 day of February, 1999.
THE VALUE LINE CASH FUND, INC.
By: /s/ DAVID T. HENIGSON
...................................
DAVID T. HENIGSON, VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
-------------------------------------------- --------------------------------- ---------------------
<S> <C> <C> <C>
*JEAN B. BUTTNER Chairman and Director; President; February 22, 1999
(JEAN B. BUTTNER) Principal Executive Officer
*JOHN W. CHANDLER Director February 22, 1999
(JOHN W. CHANDLER)
*LEO R. FUTIA Director February 22, 1999
(LEO R. FUTIA)
*DAVID H. PORTER Director February 22, 1999
(DAVID H. PORTER)
*PAUL CRAIG ROBERTS Director February 22, 1999
(PAUL CRAIG ROBERTS)
*NANCY-BETH SHEERR Director February 22, 1999
(NANCY-BETH SHEERR)
/s/ DAVID T. HENIGSON Treasurer; Principal Financial February 22, 1999
............................................ and Accounting Officer
(DAVID T. HENIGSON)
</TABLE>
*By /s/ DAVID T. HENIGSON
.................................
(DAVID T. HENIGSON,
ATTORNEY-IN-FACT)
C-4
<PAGE>
Exhibit 99(a)
ARTICLES OF INCORPORATION
OF
THE VALUE LINE CASH FUND, INC.
THIS IS TO CERTIFY:
FIRST: We, the subscribers, Harold Benjamin and Thomas J. Sexton, each of
whose post office address is 711 Third Avenue, New York, N.Y., all being of
full legal age, do, under and by virtue of the General Laws of the State of
Maryland authorizing the formation of corporations, associate ourselves with
the intention of forming a corporation.
SECOND: The name of the corporation is The Value Line Cash Fund, Inc.
(hereinafter called the "Corporation").
THIRD: The purpose or purposes for which the Corporation is formed and
the business or objects to be transacted, carried on and promoted by it, are
as follows:
(1) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct
of such operations.
(2) (a) To hold, invest and reinvest its funds, and in connection
therewith to hold part or all of its funds in cash, and to purchase or
otherwise acquire, hold for investment or otherwise, sell, assign, negotiate,
transfer, exchange or otherwise dispose of or turn to account or realize
upon, securities (which term "securities") shall for the purposes of these
Articles of Incorporation, without limitation of the generality thereof, be
deemed to include, but is not limited to common and preferred stocks;
warrants; bonds, debentures, bills, time notes and all other evidences of
indebtedness; negotiable or non-negotiable instruments; government
securities; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers acceptances and all kinds
of repurchase agreements,
<PAGE>
of any corporation, company, trust, association, firm or other business
organization however established, and of any country, state, municipality or
other political subdivision, or of any other governmental or
quasi-governmental agency or instrumentality created or issued by any issuer
(which term "issuer" shall for the purposes of these Articles of
Incorporation, without limitation of the generality thereof be deemed to
include any persons, firms, associations, corporations, syndicates,
combinations, organizations, governments, or subdivisions thereof); and to
exercise as owner or holder of any securities, all rights, powers and
privileges in respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of any or all
such securities.
(b) To aid by further investment any corporation, company,
trust, association, firm or other business organization, any obligation of or
interest in which is held by the Corporation or in the affairs of which the
Corporation has any direct or indirect interest, and to do anything designed
to protect, preserve, improve or enhance the value of such obligation or
interest.
(c) To promote or aid the incorporation of any organization or
enterprise under the laws of any country, state, municipality or other
political subdivision, and to cause the same to be dissolved, wound up,
liquidated, merged or consolidated.
(3) To issue and sell shares of its own capital stock in such
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration (including without limitation, thereto,
securities) now or hereafter permitted by the laws of Maryland and by these
Articles of Incorporation, as its Board of Directors may determine; when
shares of the capital stock of the Corporation are issued for a
2
<PAGE>
consideration consisting of or including securities, the actual value of such
securities shall for the purposes of Section 20 of the Maryland General
Corporation Law, be deemed to be an amount not exceeding the fair market
value thereof fixed on a date and in a manner determined by the Board of
Directors of the Corporation, and such consideration shall, for such
purposes, be deemed to be "securities".
(4) To purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock, in any manner
and to the extent now or hereafter permitted by the laws of said State and by
these Articles of Incorporation.
(5) To conduct its business in all its branches at one or more
offices in Maryland and elsewhere in any part of the world, without
restriction or limit as to extent.
(6) To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates or, to the extent now or
hereafter permitted by the laws of Maryland, as a member of, or as the owner
or holder of any stock of, or shares of interest in, any firm, association,
corporation, trust or syndicate; and in connection therewith to make or enter
into such deeds or contracts with any persons, firms, associations,
corporations, syndicates, governments or subdivisions thereof, and to do such
acts and things and to exercise such powers, as a natural person could
lawfully make, enter into, do or exercise.
(7) To do any and all such further acts and things and to exercise
any and all such further powers as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out or
attainment of all or any of the foregoing purposes or objects.
3
<PAGE>
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to, or inference
from, the terms of any other clause of this or any other Article of these
Articles of Incorporation, and shall each be regarded as independent, and
construed as powers as well as objects and purposes, and the enumeration of
specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms of the general powers of
the Corporation now or hereafter conferred by the laws of the State of
Maryland, nor shall the expression of one thing be deemed to exclude another,
though it be of like nature, not expressed; provided, however, that the
Corporation shall not have power to carry on within the State of Maryland any
business whatsoever the carrying on of which would preclude it from being
classified as an ordinary business corporation under the laws of said State;
nor shall it carry on any business, or exercise any powers, in any other
state, territory, district or country except to the extent that the same may
lawfully be carried on or exercised under the laws thereof.
FOURTH: The post office address of the place at which the principal
office of the Corporation in the State of Maryland will be located is 929
North Howard Street, Baltimore, Md. 21201.
The Corporation's resident agent is The Prentice-Hall Corporation System,
Maryland, whose post office address is 929 North Howard Street, Baltimore,
Maryland 21201. Said resident agent is a corporation of the State of
Maryland.
FIFTH: (1) The total amount of authorized capital stock of the
Corporation and the number and par value of its shares is $100,000,000
consisting of 100,000,000 shares of the par value of $1.00 each, all of one
class.
(2) At all meetings of stockholders each stockholder of the
Corporation shall be entitled to one vote for each
4
<PAGE>
share of stock standing in his name on the books of the Corporation. Any
fractional share, if any such fractional shares are outstanding, shall carry
proportionately all the rights of a whole share, including the right to vote
and the right to receive dividends. The presence in person or by proxy of the
holders of a majority of shares of capital stock of the Corporation
outstanding and entitled to vote thereat shall constitute a quorum at any
meeting of the shareholders. If at any meeting of the shareholders there
shall be less than a quorum present, the shareholders present at such meeting
may, without further notice, adjourn the same from time to time until a
quorum shall attend, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting
not been adjourned.
(3) All shares of the capital stock of the Corporation now or
hereafter authorized shall be subject to redemption and redeemable, in the
sense used in the General Laws of the State of Maryland authorizing the
formation of corporations, at the redemption price for any such shares,
determined in the manner set out in these Articles of Incorporation. In the
absence of any specification as to the purposes for which shares of the
capital stock of the Corporation are redeemed or purchased by it, all shares
so redeemed or purchased shall be deemed to be acquired for retirement in the
sense contemplated by the laws of the State of Maryland and the number of the
authorized shares of the capital stock of the Corporation shall not be
reduced by the number of any shares redeemed or purchased by it.
(4) Notwithstanding any provision of law requiring any action to
be taken or authorized by the affirmative vote of the holders of a majority
or other designated proportion of the shares, or to be otherwise taken or
authorized by a vote of the stockholders, such action shall be effective and
valid if
5
<PAGE>
taken or authorized by the affirmative vote of the holders of a majority of
the total number of shares outstanding and entitled to vote thereon pursuant
to the provisions of these Articles of Incorporation.
(5) No holder of stock of the Corporation shall, as such holder,
have any right to purchase or subscribe for any shares of the capital stock
of the Corporation which it may issue or sell (whether out of the number of
shares authorized by these Articles of Incorporation, or out of any shares of
capital stock of the Corporation acquired by it after the issue thereof, or
otherwise) other than such right, if any, as the Board of Directors, in its
discretion, may determine.
(6) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of these Articles of Incorporation.
SIXTH: (1) The number of Directors of the Corporation shall be nine and
the names of those who shall act as such until the first annual meeting or
until their successors are duly chosen and qualified are as follows:
Arnold Bernhard Charles E. Reed
George W. Anderson Ruxton M. Ridgely
Harold Benjamin Edmund F. Mansure
Shelby Cullom Davis Mark Tavel
Steven Lewins
However, the By-Laws of the Corporation may fix the number of Directors
at a number greater or less than that named in these Articles of
Incorporation and may authorize the Board of Directors, by the vote of a
majority of the entire Board of Directors, to increase or decrease the number
of Directors fixed by these Articles of Incorporation or by the By-Laws
within a limit specified in the By-Laws, provided that in no case shall the
number of Directors be less than three, and to fill the vacancies created by
any such increase in the number of Directors. Unless otherwise provided by
the By-Laws of the
6
<PAGE>
Corporation, the Directors of the Corporation need not be stockholders
therein.
(2) The By-Laws of the Corporation may divide the Directors of the
Corporation into classes and prescribe the tenure of office of the several
classes, until the next annual meeting and thereafter for a period shorter
than the interval between annual meetings or for a longer period than five
years, and the term of office of at least one class shall expire each year.
(3) Any officer elected or appointed by the Board of Directors or
by any committee of said Board or by the stockholders or otherwise, may be
removed at any time with or without cause, in such lawful manner as may be
provided in the By-Laws of the Corporation.
(4) If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold their meetings, to have an office or
offices and, subject to the provisions of the laws of Maryland, to keep the
books of the Corporation outside of said State at such places as may from
time to time be designated by them.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the Board of Directors may exercise
all such powers and do all acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the express provisions of the laws of
Maryland, of these Articles of Incorporation and of the By-Laws of the
Corporation.
(6) Shares of stock in other corporations shall be voted by the
President or a Vice-President, or such officer or officers of the Corporation
or such other person or
7
<PAGE>
persons as the Board of Directors shall designate for the purpose, or by a
proxy or proxies thereunto duly authorized by the Board of Directors, except
as otherwise ordered by vote of the holders of a majority of the shares of
the capital stock of the Corporation outstanding and entitled to vote in
respect thereto.
(7) Each director and officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation against reasonable
costs and expenses incurred by him in connection with any action, suit or
proceeding to which he is made a party by reason of his being or having been
a director or officer of the Corporation, except in relation to any action,
suit or proceeding in which he has been adjudged liable because of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. In the absence of an adjudication
which expressly absolves the director or officer of liability to the
Corporation or its stockholders for willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office, or in the event of a settlement, each director and officer (and his
heirs, executors and administrators) shall be indemnified by the Corporation
against payments made, including reasonable costs and expenses, provided that
such indemnity shall be conditioned upon the prior determination by a
resolution of two-thirds of those members of the Board of Directors of the
Corporation who are not involved in the action,
8
<PAGE>
suit or proceeding that the director or officer has no liability by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, and provided further that if a
majority of the members of the Board of Directors of the Corporation are
involved in the action, suit or proceeding, such determination shall have
been made by a written opinion of independent counsel. The indemnity provided
herein shall, in the event of the settlement of any such action, suit, or
proceeding, not exceed the costs and expenses (including attorneys' fees)
which would reasonably have been incurred if such action, suit or proceeding
had been litigated to a final conclusion. Such determination by resolution of
the Board of Directors or by independent counsel and the payment of amounts
by the Corporation on the basis thereof shall not prevent a stockholder from
challenging such indemnification by appropriate legal proceeding on the
grounds that the officer or director was liable because of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights and
indemnifications shall be exclusive of any other right to which the officers
and directors may be entitled according to law.
SEVENTH: The following provisions are hereby adopted for the purpose of
defining and regulating the powers of the Corporation and of the Directors
and stockholders.
SECTION I
ISSUE OF THE CORPORATION'S SHARES
1.01 GENERAL. The Board of Directors may from time to time issue and
sell or cause to be issued and sold any of the corporation's authorized
shares, including any additional shares hereafter authorized and any shares
redeemed or repurchased by the Corporation, except that only shares
previously contracted
9
<PAGE>
to be sold may be issued during any period when the determination of net
asset value is suspended pursuant to the provisions of Section 3 thereof. All
such authorized shares, when issued in accordance with the terms of this
Section 1, shall be fully paid and nonassessable.
1.02 PRICE. No shares of the Corporation shall be issued or sold by the
Corporation, except as a stock dividend distributed to shareholders, for less
than an amount which would result in proceeds to the Corporation, before
taxes payable by the Corporation in connection with such transaction, of at
least the net asset value per share determined as set forth in Section 3
hereof as of such time as the Board of Directors shall have by resolution
theretofore prescribed by not earlier than the close of business on the
business day (which terms, as used herein, shall mean a day on which the New
York Stock Exchange is open all or part of the day for unrestricted trading)
next preceding the date of receipt of an unconditional purchase order for
such shares. In the absence of a resolution of the Board of Directors
applicable to the transaction, such net asset value shall be that next
determined after receipt of such purchase order. For this purpose, the time
of receipt of such an unconditional order shall be the time it is first
received by the principal underwriter or by the custodian or depository of
the Corporation's assets or by another agent of the Corporation designated
for the purpose.
1.03 ON MERGER OR CONSOLIDATION. In connection with the acquisition of
all or substantially all the assets or stock of another investment company or
investment trust, the Board of
10
<PAGE>
Directors may issue or cause to be issued shares of the Corporation and
accept in payment therefor, in lieu of cash, such assets at their market
value, or such stock at the value of the assets held by such investment
company or investment trust as determined by the Board of Directors pursuant
to the provisions of Section 3.04(b)(2)(iii) of this Article SEVENTH, either
with or without adjustment for contingent costs or liabilities, provided that
the funds of the Corporation are permitted by law to be invested in such
assets or stock.
1.04 FRACTIONAL SHARES. The Board of Directors may issue and sell
fractions of shares having pro rata all the rights of full shares, including,
without limitation, the right to vote and to receive dividends.
SECTION II
REDEMPTION AND REPURCHASE OF
THE CORPORATION'S SHARES
2.01 REDEMPTION OF SHARES. The Corporation shall redeem its shares,
subject to the conditions and at the price determined as hereinafter set
forth, upon proper application of the record holder thereof at such office or
agency as may be designated from time to time for that purpose by the Board
of Directors. Any such application must be accompanied by the certificate or
certificates, if any, evidencing such shares, duly endorsed or accompanied by
a proper instrument of transfer. The Board of Directors shall have power to
determine from time to time the form and the other accompanying documents
which shall be necessary to constitute a proper application for redemption.
2.02 PRICE. Such shares shall be redeemed at their net asset value
determined as set forth in Section 3 hereof as of such time as the Board of
Directors shall have theretofore prescribed by resolution, which time shall
not be later than the close of business on the next business day succeeding,
and not earlier than the close of business on the next business day
11
<PAGE>
preceding, the date on which proper application is made for redemption. In the
absence of such resolution, the redemption price of shares deposited shall be
the net asset value of such shares next determined as set forth in Section 3
hereof after receipt of such application.
2.03 PAYMENT. Payment for such shares shall be made to the shareholder
of record within 7 days after the date upon which proper application is
received, subject to the provisions of Section 2.04 hereof. Such payment
shall be made in cash or other assets of the Corporation or both, as the
Board of Directors shall prescribe. For the purposes of such payment for
share redeemed, the value of assets delivered shall be determined as set
forth in Section 3 hereof as of the same time as of which the per share net
asset value of such shares is determined.
2.04 EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET VALUE. If,
pursuant to Section 3.03 hereof, the Board of directors shall declare a
suspension of the determination of net asset value, the rights of
shareholders (including those who shall have applied for redemption pursuant
to Section 2.01 hereof but who shall not yet have received payment) to have
shares redeemed and paid for by the Corporation shall be suspended until the
termination of such suspension is declared. Any record holder whose
redemption right is so suspended may, during the period of such suspension,
by appropriate written notice of revocation to the office or agency where
application was made, revoke his application and withdraw any share
certificates which accompanied such application. The redemption price of
shares for which redemption applications have not been revoked shall be the
net asset value of such shares next determined as set forth in Section 3
after the termination of such suspension, and payment shall be made within 7
days after the date upon which the application was made plus the period after
such application
12
<PAGE>
during which the determination of net asset value was suspended.
2.05 REPURCHASE BY AGREEMENT. The Corporation may repurchase shares of
the Corporation directly, or through its principal underwriter or other agent
designated for the purpose, by agreement with the owner thereof at a price
not exceeding the net asset value per share determined as of the time when
the purchase or contract of purchase is made or the net asset value as of any
time which may be later determined pursuant to Section 3 hereof, provided
payment is not made for the shares prior to the time as of which such net
asset value is determined.
2.06 CORPORATION'S OPTION TO REDEEM SHARES.
(a) The Corporation shall have the right at any time and without
prior notice to the shareholder to redeem all shares in any account for their
then-current net asset value per share if all shares in the account have an
aggregate net asset value of less than $500, or such lesser amount as the
Board of Directors may from time to time determine.
(b) the Corporation shall have the right at any time and without
prior notice to the shareholder to redeem shares in any account for their
then-current net asset value per share if and to the extent it shall be
necessary to reimburse the Corporation for any loss sustained by the
Corporation by reason of the failure of the shareholder in whose name such
account is registered to make full payment for shares of the Corporation
purchased by such shareholder.
(c) The right of redemption provided by each of the foregoing
subsections of this Section 2.06 shall be subject to such terms and conditions
as the Board of Directors may from time to time approve, and subject to
the Corporation's giving general notice of its intention to avail itself of
such right, either by publication in the Corporation's prospectus or by such
means as the Board of Directors shall determine.
13
<PAGE>
SECTION III
NET ASSET VALUE OF SHARES
3.01 BY WHOM DETERMINED. The Board of Directors shall have the power
and duty to determine from time to time the net asset value per share of the
outstanding shares of the Corporation. It may delegate such power and duty to
one or more of the directors and officers of the Corporation, to the
custodian or depository of the Corporation's assets, or to another agent of
the Corporation appointed for such purpose. Any determination made pursuant
to this Section by the Board of Directors or its delegate shall be binding on
all parties concerned.
3.02 WHEN DETERMINED. The net asset value shall be determined at such
times as the Board of Directors shall prescribe by resolution, provided that
such net asset value shall be determined at least once each week as of the
close of business on a business day. In the absence of a resolution of the
Board of Directors, the net asset value shall be determined as of the close
of trading on the New York Stock Exchange on each business day.
3.03 SUSPENSION OF DETERMINATION OF NET ASSET VALUE. The Board of
Directors may declare a suspension of the determination of net asset value
for the whole or any part of any period (a) during which the New York Stock
Exchange is closed other than customary weekend and holiday closings, (b)
during which trading on the New York Stock Exchange is restricted, (c) during
which an emergency exists as a result of which disposal by the Corporation of
securities owned by it is not reasonable practicable or it is not reasonably
practicable for the Corporation fairly to determine the value of its net
assets or (d) during which a governmental body having jurisdiction over the
Corporation may by order permit for the protection of the security holders of
the
14
<PAGE>
Corporation. Such suspension shall take effect such time as the Board of
Directors shall specify, which shall not be later than the close of business
on the business day next following the declaration, and thereafter there
shall be no determination of net asset value until the Board of Directors
shall declare the suspension at an end, except that the suspension shall
terminate in any event on the first day on which (1) the condition giving
rise to the suspension shall have ceased to exist and (2) no other condition
exists under which suspension is authorized under this Section 3.03. Each
declaration by the Board of Directors pursuant to this Section 3.03 shall be
consistent with such official rules and regulations, if any, relating to the
subject matter thereof as shall have been promulgated by the Securities and
Exchange Commission or any other governmental body having jurisdiction over
the Corporation and as shall be in effect at the time. To the extent not
inconsistent with such official rules and regulations, the determination of
the Board of Directors shall be conclusive.
3.04 COMPUTATION OF PER SHARE NET ASSET VALUE.
(a) NET ASSET VALUE PER SHARE. The net asset value of each share
as of any particular time shall be the quotient obtained by dividing the
value of the net assets of the Corporation by the total number of shares
outstanding.
(b) VALUE OF CORPORATION'S NET ASSETS. The value of the
Corporation's net assets as of any particular time shall be the value of the
Corporation's assets less its liabilities, determined and computed as follows:
(1) CORPORATION'S ASSETS. The Corporation's assets shall be
deemed to include: (A) all cash on hand or on deposit, including any interest
accrued thereon, (B) all bills and demand notes and accounts receivable, (C)
all securities owned or contracted for by the Corporation, (D) all stock and
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cash dividends and cash distributions payable to but not yet received by the
Corporation (when the valuation of the underlying security is being
determined ex-dividend), (E) all interest accrued on any interest-bearing
securities owned by the Corporation (except accrued interest included in the
valuation of the underlying security), (F) all repurchase agreements, and
(G) all other property of every kind and nature, including prepaid expenses.
(2) VALUATION OF ASSETS. The value of such assets is to be
determined as follows:
(i) CASH AND PREPAID EXPENSES. The value of any cash on
hand and of any prepaid expenses shall be deemed to be their full amount.
(ii) OTHER CURRENT ASSETS. The value of any cash or
deposit, bills, demand notes, accounts receivable, and cash dividends and
interest declared or accrued as aforesaid and not yet received shall be
deemed to be the full amount thereof, unless the Board of Directors shall
determine that any such item is not worth its full amount. In such case, the
value of the item shall be deemed to be its reasonable value, as determined
by the Board of Directors.
(iii) SECURITIES. Securities for which representative
market quotations are readily available are valued at the most recent bid
price or yield equivalent as quoted by one or more dealers who make markets
in such securities. Other securities are appraised at values deemed best to
reflect their fair value as determined in good faith by or under the
supervision of officers of the Fund specifically authorized by the Board of
Directors.
(3) THE CORPORATION'S LIABILITIES. The
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Corporation's liabilities shall not be deemed to include outstanding shares
and surplus. They shall be deemed to include: (A) all bills and accounts
payable, (B) all administrative expenses accrued, (C) all contractual
obligations for the payment of money or property, including the amount of any
declared but unpaid dividends upon the Corporation's shares, (D) all reserves
authorized or approved by the Board of Directors for taxes or contingencies
and (E) all other liabilities of whatsoever kind and nature except any
liabilities represented by the Corporation's outstanding shares and surplus.
3.05 INTERIM DETERMINATIONS. Any determination of net asset value other
than as of the close of trading on the New York Stock Exchange may be made
either by appraisal or by calculation or estimate. Any such calculation or
estimate shall be based on changes in the market value of representative or
selected securities or on changes in recognized market averages since the
last closing appraisal and made in a manner which in the opinion of the Board
of Directors or its delegate will fairly reflect the changes in the net asset
value.
3.06 MISCELLANEOUS. For the purposes of the Section 3.
(a) Shares of the Corporation sold shall be deemed to be
outstanding as of the time, an unconditional purchase order therefor has been
received by the Corporation (directly or through one of its agents) or by one
of its underwriters and the sale price in currency has been determined, when
the sale is reported to the Corporation or to its agent for determining net
asset value, and the sale price thereof to the Corporation (less commission,
if any, and less any stamp or other tax payable by the Corporation in
connection with the issue and sale thereof) shall be thereupon deemed to be
an asset of the Corporation.
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(b) Shares of the Corporation for which an application for
redemption has been made or which are subject to repurchase by the
Corporation shall be deemed to be outstanding up to and including the time as
of which the redemption or repurchase price is determined. After such time,
they shall be deemed to be a liability of the Corporation.
(c) Funds on deposit and contractual obligations payable to the
Corporation in foreign currency and liabilities and contractual obligations
payable by the Corporation in foreign currency shall be taken at the current
rate of exchange as nearly as practicable at the time as of which the net
asset value is computed.
SECTION IV
COMPLIANCE WITH INVESTMENT
COMPANY ACT OF 1940
Notwithstanding any of the foregoing provisions of this Article SEVENTH,
the Board of Directors may prescribe, in its absolute discretion, such other
bases and times for determining the per share net asset value of the
Corporation's shares as it shall deem necessary or desirable to enable the
Corporation to comply with any provision of the Investment Company Act of
1940, or any rule or regulation thereunder, including any rule or regulation
adopted pursuant to Section 22 of the Investment Company Act of 1940 by the
Securities and Exchange Commission or any securities association registered
under the Securities Act of 1934, all as in effect now or as hereafter
amended or added.
SECTION V
MISCELLANEOUS
5.01 INSPECTION OF CORPORATION'S BOOKS. The Board
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of Directors shall have power from time to time to determine whether and to
what extent, and at what times and places and under what conditions and
regulations the accounts and books of the Corporation (other than the stock
ledger) or any of them shall be open to the inspection of shareholders; and
no shareholder shall have any right of inspecting any account, book or
document of the Corporation except as at the time conferred by statute,
unless authorized by a resolution of the shareholders or the Board of
Directors.
5.02 NAME. The Corporation acknowledges that it is utilizing its
corporate name pursuant to contract with Arnold Bernhard & Company, Inc., a
New York corporation, and that Arnold Bernhard & Co., Inc. reserves the right
to withdraw its permission to utilize such name upon the expiration of any
such contract or successor contract, and further agrees that Arnold Bernhard
& Company, Inc. reserves itself and any successor to its business the right
to grant and withdraw the non-exclusive right to use the name "Value Line" or
any similar name to any other corporation or entity, including but not
limited to any investment company of which Arnold Bernhard & Company, Inc. or
any subsidiary or affiliate thereof or any successor to the business of any
thereof shall be the investment adviser.
5.03 DETERMINATION OF NET PROFITS, ETC.; DIVIDENDS. The Board of
Directors is expressly authorized to determine in accordance with generally
accepted accounting principles and practices what constitutes net profits,
earnings, surplus or net assets in excess of capital, and to determine what
accounting periods shall be used by the Corporation for any purpose, whether
annual or any other period, including daily; to set apart out of any funds of
the Corporation such reserves for such purposes as it shall determine and to
abolish the same; to declare and pay dividends and distributions in cash,
securities or other property from surplus or any funds legally
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<PAGE>
available therefor, at such intervals (which may be as frequently as daily)
or on such other periodic basis, as it shall determine; to declare such
dividends or distributions by means of a formula or other method of
determination, at meetings held less frequently than the frequency of the
effectiveness of such declarations; to establish payment dates for dividends
or any other distributions on any basis, including dates occurring less
frequently than the effectiveness of the declaration thereof; and to provide
for the payment of declared dividends on a date earlier than the specified
payment date in the case of stockholders of the Corporation redeeming their
entire ownership of shares of the Corporation.
5.04 CONTRACTS. The Board of Directors may in its discretion from time
to time authorize the Corporation to enter into an exclusive or non-exclusive
underwriting contract or contracts providing for the sale of the shares of
Capital Stock of the Corporation at prices computed in accordance with
Section 1.02 of Article SEVENTH hereof, whereby the Corporation may either
agree to sell the shares to the other party to the contract or appoint such
other party its sales agent for such shares (such other party being herein
sometimes called the "underwriter"), and in either case on such terms and
conditions as may be prescribed in the By-Laws, if any, and such further
terms and conditions as the Board of Directors may in its discretion
determine to inconsistent with the provisions of Article SEVENTH hereof or of
the By-Laws; and such contract may also provide for the repurchase of shares
of the Corporation by such other party as agent of the Corporation.
The Board of Directors may in its discretion from time to time authorize
the Corporation to enter into an investment advisory or management contract
whereby the other party to such contract shall undertake to furnish to the
Corporation such management, investment advisory, statistical
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and research facilities and services and such other facilities and services,
if any, and all upon such terms and conditions, as the Board of Directors may
in its discretion determine.
Any contract of the character described in the paragraphs above or for
services as custodian, transfer agent or disbursing agent or related services
may be entered into with any corporation, firm, trust or association or any
subsidiary or affiliate of such corporation, firm, trust or association,
although one or more of the directors or officers of the Corporation may be
an officer, director, trustee, shareholder or member of such other party to
the contract, and no such contract shall be invalidated or rendered voidable
by reason of the existence of any such relationship, nor shall any person
holding such relationship be liable merely by reason of such relationship for
any loss or expense to the Corporation under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom,
provided that the contract when entered into was reasonable and fair and not
inconsistent with the provisions of this Section 5.03. The same person
(including a firm, corporation, trust or association) may be the other party
to contracts entered into pursuant to the above paragraphs, and any
individual may be financially interested or otherwise affiliated with persons
who are parties to any or all of the contracts mentioned in this paragraph.
Any contract entered into pursuant to the first two paragraphs of this
Section 5.03 shall be consistent with and subject to the requirements of the
Investment Company Act of 1940 (including any amendment thereof or other
applicable Act of Congress hereafter enacted) with respect to its continuance
in effect, its termination and the method of authorization and approval of
such contract or renewal thereof.
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EIGHTH: From time to time any of the provisions of these Articles of
Incorporation may be amended, altered or repealed (including any amendment
which changes the terms of any of the outstanding stock classification,
reclassification or otherwise), upon the vote of the holders of a majority of
the shares of capital stock of the Corporation at the time outstanding and
entitled to vote, and other provisions which might under the statutes of the
State of Maryland at the time in force be lawfully contained in Articles of
Incorporation, may be added or inserted upon such a vote and all rights at
any time conferred upon the stockholders of the Corporation by these Articles
of Incorporation are granted subject to the provisions of this Article EIGHTH.
The term "these Articles of Incorporation" as used herein and in the
By-Laws of the Corporation shall be deemed to mean these Articles of
Incorporation as from time to time amended and restated.
IN WITNESS WHEREOF, we have signed these Articles of Incorporation on
this 23rd day of January 1979.
/s/ Harold Benjamin
-------------------------------
Harold Benjamin
/s/ Thomas J. Sexton
-------------------------------
Thomas J. Sexton
-------------------------------
22
<PAGE>
WITNESS:
- ------------------------------
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
This is to certify that on this 23 day of January, 1979, before me, the
subscriber, a Notary Public of the State of New York, personally appeared
Harold Benjamin and Thomas J. Sexton and severally acknowledged the foregoing
Articles of Incorporation to be their act.
Witness my hand and Notarial Seal the day and year last above written.
/s/ Kenneth M. Newcomb
----------------------------
Notary Public
[SEAL]
23
<PAGE>
THE VALUE LINE CASH FUND, INC.
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
The Value Line Cash Fund, Inc., a Maryland Corporation having its
principal office in Maryland (hereinafter called the ("Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The charter of the Corporation is hereby amended by striking out
Article FIFTH, Paragraph (1) and inserting in lieu thereof the following:
FIFTH: (1) The total amount of authorised capital stock of the
Corporation and the number and par value of its shares is $100,000,000
consisting of 1,000,000,000 shares of the par value of $.10 each,
all of one class.
SECOND: The board of directors of the Corporation, by written consent
to such action signed by all the members thereof and filed with the minutes of
proceedings of the board, adopted a resolution in which was set forth the
foregoing amendment to the charter declaring that said amendment of the
charter was advisable.
THIRD: Approval of the amendment of the charter of the Corporation as
herein above set forth, was not presented or submitted to the shareholders of
the Corporation for the reason that no shares of stock of the Corporation have
ever been issued nor subscribed to and there are no shareholders.
FOURTH: The amendment of the charter of the Corporation as hereinabove
set forth has been duly approved by the board of directors.
FIFTH: (a) The total number of shares of all classes of stock of the
Corporation heretofore authorized, and the number and par value of the shares
of each class are as follows: 100,000,000 shares of the par value of $1.00
per share.
(b) The total number of shares of all classes of stock of the
Corporation as changed, and the number and par value of the shares of each
class, are as follows: 1,000,000,000 shares of the par value of $.10 per
share.
<PAGE>
IN WITNESS WHEREOF, The Value Line Cash Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed
and attested by its Secretary or one of its Assistant Secretaries, on
March 19, 1979.
Attest: The Value Line Cash Fund, Inc.
/s/ Dorothy A. Berry /s/ Harold Benjamin
- --------------------------- ------------------------------
Dorothy A. Berry, Secretary By: Harold Benjamin, President
STATE OF NEW YORK,
ss:
COUNTY OF NEW YORK
I HEREBY CERTIFY that on March 19, 1979, before me the subscriber, a
notary public of the State of New York in and for the County of New York,
personally appeared Harold Benjamin, President of The Value Line Cash Fund,
Inc., a Maryland Corporation, and in the name and on behalf of said
Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation and further made oath in due form of law
that the matters and facts set forth in said Articles of Amendment with
respect to the approval thereof are true to the best of his knowledge,
information and belief.
WITNESS my hand and notarial seal, the day and year last above written.
/s/ Kenneth M. Newcomb
----------------------------
Notary Public
[SEAL]
<PAGE>
THE VALUE LINE CASH FUND, INC.
ARTICLE OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
The Value Line Cash Fund, Inc., a Maryland Corporation having its
principal office in Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The charter of the Corporation is hereby amended by striking our
Article SIXTH, Paragraph (7) and inserting in lieu thereof the following:
SIXTH: (7) Each director and officer (and his heirs, executors and
administrators) shall be indemnified by the Corporation against
reasonable costs and expenses incurred by him in connection with any
action, suit or proceeding to which he is made a party by reason of
his being or having been a director or officer of the Corporation,
except in relation to any action, suit or proceeding in which he
has been adjudged liable because of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. In the absence of an
adjudication which expressly absolves the director or officer of
liability to the Corporation or its stockholders for willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office, or in the event
of a settlement, each director and officer (and his heirs, executors
and administrators) shall be indemnified by the Corporation against
payments made, including reasonable costs and expenses, provided
that such indemnity shall be conditioned upon the prior
determination made by a written opinion of independent counsel that
the director or officer has no liability by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office. The indemnity
provided herein shall, in the event of the settlement of any such
action, suit, or proceeding, not exceed the costs and expenses
(including attorneys' fees) which would reasonably have been
incurred if such action, suit or proceeding had been litigated to a
final conclusion. Such determination by independent counsel and the
payment of amounts by the Corporation on the basis thereof shall
not prevent a stockholder from challenging such indemnification by
appropriate legal proceeding on the grounds that the officer or
director was liable because of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his office. The foregoing rights and
indemnifications shall be exclusive of any other right to which the
officers and directors may be entitled according to law.
<PAGE>
SECOND: The board of directors of the Corporation, by written consent
to such action signed by all the members thereof and filed with the minutes of
proceedings of the board, adopted a resolution in which was set forth the
foregoing amendment to the charter declaring that said amendment of the
charter was advisable and said amendment was also approved by unanimous
written consent and waiver of all the stockholders of the Corporation.
THIRD: A consent in writing, setting forth approval of the amendment of
the charter of the Corporation hereinabove set forth, was signed by all
stockholders of the Corporation entitled to vote thereon and any other
stockholders of the Corporation entitled to notice of a meeting of
stockholders (but not to vote thereat) have waived in writing any rights they
may have to dissent from such amendments; and such consent and waiver are
filed with the records of the Corporation.
FOURTH: The amendment of the charter of the Corporation as hereinabove
set forth has been duly advised by the board of directors and approved by the
stockholders of the Corporation.
IN WITNESS WHEREOF, the Value Line Cash Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its President or one
of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on April 9, 1979.
Attest: The Value Line Cash Fund, Inc.
/s/ Dorothy A. Berry /s/ Harold Benjamin
- --------------------------- ------------------------------
Dorothy A. Berry, Secretary By: Harold Benjamin, President
STATE OF NEW YORK
ss:
COUNTY OF NEW YORK,
I HEREBY CERTIFY that on April 9, 1979, before me the subscriber, a
notary public of the State of New York in and for the County of New York,
personally appeared Harold Benjamin, President of The Value Line Cash Fund,
Inc., a Maryland Corporation, and in the name and on behalf of said
Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation and further made oath in due form of law
that the matters and facts set forth in said Articles of Amendment with
respect to the approval thereof are true to the best of his knowledge,
information and belief.
WITNESS my hand and notarial seal, the day and year last above written.
/s/ Kenneth M. Newcomb
----------------------------
Notary Public
[SEAL]
<PAGE>
Exhibit 99(b)
THE VALUE LINE CASH FUND, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. PLACE OF MEETING. All meetings of the stockholders shall be
held at the principal office of the Corporation in the State of Maryland or
at such other place within or without the State of Maryland as may from time
to time be designated by the Board of Directors and stated in the notice of
meeting.
Section 2. ANNUAL MEETINGS. The annual meeting of the stockholders of
the Corporation shall be held at such hour as may be determined by the Board
of Directors and as shall be designated in the notice of meeting on such date
within 31 days after the 14th day of March in each year as may be fixed by
the Board of Directors for the purpose of electing directors for the ensuing
year and for the transaction of such other business as may properly be
brought before the meeting.
Section 3. SPECIAL OR EXTRAORDINARY MEETINGS. Special or extraordinary
meetings of the stockholders for any purpose or purposes may be called by the
Chairman of the Board of Directors, if any, or by the President or by a
majority of the Board of Directors who are not interested persons, as that
term is defined in the Investment Company Act of 1940 (the "1940 Act") of the
Corporation or of the Corporation's investment adviser.
<PAGE>
and shall be called by the Secretary upon receipt of the request in writing
signed by stockholders holding not less than one quarter in amount of the
entire capital stock issued and outstanding and entitled to vote thereat.
Such request shall state the purpose or purposes of the proposed meeting.
Section 4. NOTICE OF MEETINGS OF STOCKHOLDERS. Not less than ten days and
not more than ninety days written or printed notice of every meeting of
stockholders, stating the time and place thereof (and the general nature of
the business proposed to be transacted at any special or extraordinary
meeting), shall be given to each stockholder entitled to vote thereat by
leaving the same with him or at his residence or usual place of business or
by mailing it, postage prepaid, and addressed to him at his address as it
appears upon the books of the Corporation.
No notice of the time, place or purpose of any meeting of
stockholders need be given to any stockholder who attends in person or by
proxy or to any stockholder who, in writing executed and filed with the
records of the meeting, either before or after the holding thereof, waives
such notice.
Section 5. CLOSING OF TRANSFER BOOKS: RECORD DATES. The Board of
Directors may fix the time, not exceeding twenty days preceding the date of
any meeting of stockholders, and dividend payment date or any date for the
allotment of rights, during which the books of the Corporation shall be
closed against transfers of stock. If such books are closed for the purpose
of determining stockholders entitled to notice of or to vote at
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a meeting of stockholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of providing for the closing of
the books against transfers of stock as aforesaid, the Board of Directors may
fix, in advance, a date, not exceeding sixty days and not less than ten days
preceding the date of any meeting of stockholders, and not exceeding sixty
days preceding any dividend payment date or any date for the allotment of
rights, as a record date for the determination of the stockholders entitled
to notice of and to vote at such meeting, or entitled to receive such
dividends or rights, as the case may be; and only stockholders of record on
such date shall be entitled to notice of and to vote at such meeting or to
receive such dividends or rights, as the case may be.
Section 6. QUORUM, ADJOURNMENT OF MEETINGS. The presence in person or by
proxy of the holders of record of a majority of the shares of the capital
stock of the Corporation issued and outstanding and entitled to vote thereat,
shall constitute a quorum at all meetings of the stockholders. If at any
meeting of the stockholders there shall be less than a quorum present, the
stockholders present at such meeting may, without further notice, adjourn the
same from time to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might have been
lawfully transacted had the meeting not been adjourned.
Section 7. VOTING AND INSPECTORS. At all meetings of
3
<PAGE>
stockholders every stockholder of record entitled to vote thereat shall be
entitled to one vote for each share of stock standing in his name on the
books of the Corporation (and such stockholders of record holding fractional
shares, if any, shall have proportionate voting rights as provided in the
Articles of Incorporation) on the date for the determination of stockholders
entitled to vote at such meeting either in person or by proxy appointed by
instrument in writing subscribed by such stockholder or his duly authorized
attorney. No proxy which is dated more than three months before the meeting
at which it is offered shall be accepted, unless such proxy shall, on its
face, name a longer period for which it is to remain in force.
All elections shall be had and all questions decided by a majority of
the votes cast at a duly constituted meeting, except as otherwise provided in
the Articles of Incorporation or in these By-Laws or by specific statutory
provision superseding the restrictions and limitations contained in the
Articles of Incorporation or in these By-Laws.
At any election of Directors, the Board of Directors prior thereto may,
or, if they have not so acted, the Chairman of the meeting may, and upon the
request of the holders of ten percent (10%) of the stock entitled to vote at
such election shall, appoint two inspectors to election who shall first
subscribe an oath or affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and according to the
best of their ability, and
4
<PAGE>
shall after the election make a certificate of the result of the vote taken.
No candidate for the office of Director shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken upon
any election or matter, and such vote shall be taken upon the request of the
holders of ten percent (10%) of the stock entitled to vote on such election
or matter.
Section 8. CONDUCT OF STOCKHOLDERS' MEETINGS. The meetings of the
stockholders shall be presided over by the Chairman of the Board of
Directors, if any, or if he shall not be present by the President or if he
shall not be present, by a Vice-President, or if neither Chairman of the
Board of Directors, the President nor any Vice-President is present, by a
chairman to be elected at the meeting. The Secretary of the Corporation, if
present, shall act as Secretary of such meetings, or if he is not present, an
Assistant Secretary shall so act; if neither the Secretary nor an Assistant
Secretary is present, then the meeting shall elect its secretary.
Section 9. CONCERNING VALIDITY OF PROXIES, BALLOTS, ETC. At every
meeting of the stockholders, all proxies shall be received and taken in
charge of and all ballots shall be received and canvassed by the secretary of
the meeting, who shall decide all questions touching the qualification of
voters, the validity of the proxies, and the acceptance or rejection of
votes, unless inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall decide all such
questions.
5
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
Section 1. NUMBER AND TENURE OF OFFICE. The business and property of
the Corporation shall be conducted and managed by a Board of Directors
consisting of eight Directors, which number may be increased or decreased as
provided in Section 2 of this Article. Each director shall hold office until
the annual meeting of stockholders of the Corporation next succeeding his
election or until his successor is duly elected and qualifies. Directors need
not be stockholders.
Section 2. INCREASE OR DECREASE IN NUMBER OF DIRECTORS. The Board of
Directors, by the vote of a majority of the entire Board, may increase the
number of Directors to a number not exceeding fifteen, and may elect
Directors to fill the vacancies created by any such increase in the number of
Directors until the next annual meeting or until their successors are duly
elected and qualify; the Board of Directors, by the vote of a majority of the
entire Board, may likewise decrease the number of Directors to a number not
less than three. Vacancies occurring other than by reason of any such
increase shall be filled as provided by the Maryland General Corporation Law.
Section 3. PLACE OF MEETING. The Directors may hold their meetings,
have one or more offices, and keep the books of the Corporation outside the
State of Maryland, at any office or offices of the Corporation or at any other
place as they may
6
<PAGE>
from time to time by resolution determine, or, in the case of meetings, as
they may from time to time by resolution determine or as shall be specified
or fixed in the respective notices or waivers of notice thereof.
Section 4. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such time and on such notice, if any, as the Directors may
from time to time determine.
The annual meeting of the Board of Directors shall be held as soon
as practicable after the annual meeting of the stockholders for the election
of Directors.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held from time to time upon call of the Chairman of the Board of
Directors, if any, the President or two or more of the Directors, by oral or
telegraphic or written notice duly served on or sent or mailed to each
Director not less than one day before such meeting. No notice need be given
to any Director who attends in person or to any Director who, in writing
executed and filed with the records of the meeting either before or after the
holding thereof, waives such notice. Such notice or waiver of notice need not
state the purpose or purposes of such meeting.
Section 6. QUORUM. One third of the Directors then in office shall
constitute a quorum for the transaction of business, provided that a quorum
shall in no case be less than two Directors. If at any meeting of the Board
there shall be less than a quorum present, a majority of those present may
adjourn the meeting from time to time until a quorum shall have been
7
<PAGE>
obtained. The act of the majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Directors, except as may be
otherwise specifically provided by statute, by the Articles of Incorporation
or by these By-Laws.
Section 7. EXECUTIVE COMMITTEE. The Board of Directors may, by the
affirmative vote of a majority of the entire Board, elect from the Directors
an Executive Committee to consist of such number of Directors as the Board
may from time to time determine. The Board of Directors by such affirmative
vote shall have power at any time to change the members of such Committee and
may fill vacancies in the Committee by election from the Directors. When the
Board of Directors is not in session, the Executive Committee shall have and
may exercise any or all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation (including the
power to authorize the seal of the Corporation to be affixed to all papers
which may require it) except as provided by law and except the power to
increase or decrease the size of, or fill vacancies on the Board. The
Executive Committee may fix its own rules of procedure, and may meet, when
and as provided by such rules or by resolution of the Board of Directors, but
in every case the presence of a majority shall be necessary to constitute a
quorum. In the absence of any member of the Executive Committee the members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint a member of the Board of Directors to act in the place of such absent
member.
8
<PAGE>
Section 8. OTHER COMMITTEES. The Board of Directors, by the affirmative
vote of a majority of the entire Board; may appoint other committees which
shall in each case consist of such number of members (not less than two) and
shall have and may exercise such powers as the Board may determine in the
resolution appointing them. A majority of all members of any such committee
may determine its action, and fix the time and place of its meetings, unless
the Board of Directors shall otherwise provide. The Board of Directors shall
have power at any time to change the members and powers of any such
committee, to fill vacancies, and to discharge any such committee.
Section 9. INFORMAL ACTION BY DIRECTORS AND COMMITTEES. Any action
required or permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting, if a written consent to
such action is signed by all members of the Board, or of such committee, as
the case may be.
Section 10. COMPENSATION OF DIRECTORS. No Director shall receive any
stated salary or fees from the Corporation for his services as such Director
if such Director is, otherwise then by reason of being such Director,
employed by the Corporation or any manager/investment adviser of the
Corporation. Except as provided in the preceding sentence, Directors shall be
entitled to receive such compensation from the Corporation for their services
as may from time to time be voted by the Board of Directors.
9
<PAGE>
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The executive officers of the
Corporation shall be chosen by the Board of Directors as soon as may be
practicable after the annual meeting of the stockholders. These may include a
Chairman of the Board of Directors, and shall include a President, one or
more Vice-Presidents (the number thereof to be determined by the Board of
Directors), a Secretary and a Treasurer. The Chairman of the Board of
Directors, if any, and the President shall be selected from among the
Directors. The Board of Directors may also in its discretion appoint
Assistant Secretaries, Assistant Treasurers, and other officers, agents and
employees, who shall have such authority and perform such duties as the Board
or the Executive Committee may determine. The Board of Directors may fill any
vacancy which may occur in any office. Any two officers, except those of
President and Vice-President, may be held by the same person, but no officer
shall execute, acknowledge or verify any instrument in more than one
capacity, if such instrument is required by law or these By-Laws to be
executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. The term of office of all officers shall be
one year and until their respective successors are chosen and qualify,
subject, however, to any provision for removal contained in the Articles of
Incorporation. Any officer may be removed from office at any time with or
without cause by the vote of a majority of the entire Board of Directors.
10
<PAGE>
Section 3. POWERS AND DUTIES. The officers of the Corporation shall
have such powers and duties as generally pertain to their respective offices,
as well as such powers and duties as may from time to time be conferred by
the Board of Directors or the Executive Committee.
ARTICLE IV
CAPITAL STOCK
Section 1. CERTIFICATES OF SHARES. Each stockholder of the Corporation
shall be entitled to a certificate or certificates for the full shares of
stock of the Corporation owned by them in such form as the Board of Directors
may from time to time prescribe.
Section 2. TRANSFER OF SHARES. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person
or by his duly authorized attorney or legal representative, upon surrender
and cancellation of certificates, if any, for the same number of shares, duly
endorsed or accompanied by proper instruments of assignment and transfer,
with such proof of the authenticity of the signature as the Corporation or
its agents may reasonably require, in the case of shares not represented by
certificates, the same or similar requirements may be imposed by the Board of
Directors.
Section 3. STOCK LEDGERS. The stock ledgers of the Corporation,
containing the name and address of the stockholders and the number of shares
held by them respectively, shall be
11
<PAGE>
kept at the principal offices of the Corporation or, if the Corporation
employs a transfer agent, at the offices of the transfer agent of the
Corporation.
Section 4. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of
Directors may determine the conditions upon which a new certificate of stock
of the Corporation of any class may be issued in place of a certificate which
is alleged to have been lost, stolen or destroyed; and may, in their
discretion, require the owner of such certificate or his legal representative
to give bond, with sufficient surety to the Corporation and the transfer
agent, if any, to indemnify it and such transfer agent against any and all
loss or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
ARTICLE V
CORPORATE SEAL
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of
Directors.
12
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 1. INDEMNIFICATION. Each director and officer (and his heirs,
executors and administrators) shall be indemnified by the Corporation to the
extent set forth in the Articles of Incorporation.
Section 2. ADVISORY CONTRACT. Any advisory or management contract to
which the Corporation shall be a party shall not be amended, without the
affirmative vote or the written consent of the holders of a majority (as
defined in the Investment Company Act of 1940) of all the shares of the
capital of the Corporation at the time outstanding and entitled to vote.
Section 3. CUSTODIANSHIP. All cash and securities owned by the
Corporation shall be held by a bank or trust company of good standing, having
a capital, surplus and undivided profits aggregating not less than two
million ($2,000,000), provided such a bank or trust company can be found
ready and willing to act. Upon resignation or inability to serve of any such
bank or trust company the Corporation shall (i) use its best efforts to
obtain a qualified successor, (ii) require the cash and securities of the
Corporation held by such bank or trust company to be delivered directly to
the successor, and (iii) in the event that no qualified successor can be
found, submit to the holders of the shares of the capital stock of the
Corporation at the time outstanding and entitled to vote, before permitting
delivery of such cash and securities to anyone other than a qualified
13
<PAGE>
Exhibit 99(d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 10th day of Aug. 1988, between THE VALUE LINE CASH
FUND, INC., a Maryland corporation (hereinafter called "the Fund"), and VALUE
LINE, INC., a New York corporation (hereinafter called "the Company");
W I T N E S S E T H:
WHEREAS, the Fund desires to have the Company Act as its investment
adviser and provide it with investment research, advice, supervision and
management; and
WHEREAS, the Company is willing to undertake the same upon the terms and
conditions set forth.
NOW, THEREFORE, it is hereby agreed by and between the parties hereto as
follows:
1. DUTIES. The Company shall provide the Fund with such investment
research, data, advice and supervision as the latter may from time to time
consider necessary for proper supervision of its funds. The company shall act
as manager and investment adviser of the Fund and, as such, shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased or sold by the Fund, and what portion of the
assets of the Fund shall be held uninvested, subject always to the provisions
of the Fund's Articles of Incorporation and By-Laws, to the Fund's
fundamental investment policies as in effect from time to time, and to the
control and review by the Fund's Board of Directors. The Company shall take,
on behalf of the Fund, all actions which it deems necessary to carry into
effect the investment policies determined as provided above, and to that end
the Company may designate a person or persons who are to be authorized by the
Fund as the representative or representatives of the Fund, to give
instructions to the Custodian of the assets of the Fund as to deliveries of
securities and payments of cash for the account of the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES; BROKERAGE. The Company shall
furnish at its own expense all administrative services, office space,
equipment and administrative, bookkeeping and clerical personnel necessary
for managing the affairs of the Fund. The Company shall also provide persons
satisfactory to the Fund's Board of Directors to act as officers and
employees of the Fund and shall pay the salaries and wages of all officers
and employees of the Fund who are also officers and employees of the Company
or of an affiliated person (as defined in the Investment Company Act of 1940)
other than the Fund. All other costs and expenses not expressly assumed by the
Company under this Agreement, or to be paid by the Distributor or
Distributors of the shares of the Fund, shall be paid by the Fund, including
(i) interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities; (iii) insurance premiums
for fidelity and other coverage requisite to its operations; (iv)
compensation and expenses of its directors other than those affiliated with
the Company; (v) legal and audit expenses; (vi) custodian and shareholder
servicing agent fees and expenses; (vii) expenses incident to the redemption
of its shares; (viii) expenses incident to the issuance of its shares against
payment therefor by or on behalf of the subscribers thereto, including
printing of stock certificates; (ix) fees and expenses incident to the
registration under the Securities Act of 1933 or under any state securities
laws of shares of the Fund for public sale and fees imposed on the Fund under
the Investment Company Act of 1940; (x) expenses of printing and mailing
prospectuses, reports and notices and proxy
A-1
<PAGE>
material to shareholders of the Fund; (xi) all other expenses incidental to
holding meetings of the Fund's shareholders; (xii) a pro rata share, based on
relative net asset value of the Fund and other investment companies for which
the Company also act as manager and investment adviser, of 50% of the fees or
dues of the Investment Company Institute; (xiii) fees and expenses in
connection with registration of the Fund or qualification of its shares under
the securities laws of states and foreign jurisdictions and (xiv) such
non-recurring expenses as may arise, including actions, suits or proceedings
to which the Fund is a party and the legal obligation which the Fund may have
to indemnify its officer and directors with respect thereto.
The Company shall place purchase and sale orders for portfolio
transactions of the Fund with brokers and/or dealers including, where
permitted by law, the Fund's Distributor or affiliates thereof or of the
Company, which, in the judgment of the Company, are able to execute such
orders as expeditiously as possible and at the best obtainable price.
Purchases and sales of securities which are not listed or traded on a
securities exchange shall ordinarily be executed with primary market makers
acting as principal except when it is determined that better prices and
executions may otherwise be obtained, provided, that the Company may cause
the Fund to pay a member of a securities exchange, broker or dealer an amount
of commission for effecting a purchase or sale order for a portfolio
transaction in excess of the amount of commission another member of an
exchange, broker or dealer would have charged for effecting that transaction
if the Company determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker, dealer, viewed in terms of that particular
transaction or the Company's overall responsibilities. As used herein,
"brokerage and research services" shall have the same meaning as in
Section 28(e)(3) of the Securities Exchange Act of 1934, as such Section may
be amended from time to time, and any rules or regulations promulgated by the
Securities and Exchange Commission. It is understood that, consistent with
the Company's fiduciary duty to the Fund, it is the intent of this Agreement
to allow the Company the widest discretion permitted by law in determining
the manner and means by which portfolio securities' transactions can be
effected in the best interests of the Fund.
3. COMPENSATION. (a) For its services and for the facilities to be
furnished as provided herein, the Fund shall pay to the Company an advisory
fee payable monthly, computed at the annual rate of 4/10 of 1% of the Fund's
average net assets during the year pro rated for any portion of a year during
which this Agreement is in effect. For this purpose, the value of the Fund's
net assets shall be determined in the same manner as for the purchase and
redemption of Fund shares as described in the Fund's current Prospectus.
(b) If the Fund's Distributor receives fees in connection with the tender
of portfolio securities of the Fund, the gross amount of the advisory fee
computed in accordance with the preceding paragraph 3(a) shall be reduced by
the amount of tender fees received; if the amount of such tender fees exceeds
the amount of advisory fees computed in accordance with paragraph 3(a), the
excess shall be paid by the Company to the Fund.
(c) In the event that the total expenses of the Fund, excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceeds in any
fiscal year the lowest applicable percentage limitation prescribed by any
state in which shares of the Fund are sold, the compensation of the Company,
computed in accordance with the preceding two paragraphs 3(a) and 3(b), shall
be reduced by the amount of such excess.
4. DURATION AND TERMINATION OF AGREEMENT. This Agreement shall become
effective on the date set forth above and will continue in effect from year
to year thereafter only so long as such continuance is specifically approved
at least annually in accordance with the Investment Company Act of 1940. This
Agreement may be terminated on sixty days written notice by either party.
This Agreement shall terminate automatically in the event of its assignment
as defined in the Investment Company Act of 1940.
A-2
<PAGE>
5. NAME OF FUND. The Company consents to the use by the Fund of the name
"The Value Line Cash Fund, Inc." so long, and only so long, as this Agreement
(or any agreement with any organization which has succeeded to the business
of the Company) or any extension, renewal or amendment thereof, remains in
effect. The Fund agrees that if and when no such agreement is in effect, (a)
it will cease to use said name or any name indicating or suggesting that the
Fund is advised by or otherwise connected with the Company and (b) it will
not thereafter refer to the former association between the Company and the
Fund.
6. COMPANY MAY ACT FOR OTHERS. Nothing herein contained shall limit the
freedom of the Company or any affiliated person of the Company to render
investment supervisory or corporate administrative services to other
investment companies, to act as investment adviser or investment counselor to
other persons, firms or corporations, and to engage in other business
activities.
7. AMENDMENT OF AGREEMENT. This Agreement may not be amended except
pursuant to a direction given by the vote of the holders of a majority (as
defined in the Investment Company Act of 1940) of the outstanding shares of
the Fund.
8. LIABILITY. The Company shall not be liable for any error of judgment,
or mistake of law, or any loss suffered by the Fund, in connection with the
matters to which this Agreement relates, except for loss resulting in the
performance of its duties or from reckless disregard by the Company of its
obligations and duties hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date and year first
above written.
THE VALUE LINE CASH FUND, INC.
By /s/ Thomas J. Sexton
-------------------------
VALUE LINE, INC.
By /s/ Jean E. Suttner
-------------------------
A-3
<PAGE>
Exhibit 99(e)
DISTRIBUTOR'S AGREEMENT
Between
THE VALUE LINE CASH FUND, INC.
and
VALUE LINE SECURITIES, INC.
March 28, 1979
VALUE LINE SECURITIES, INC.
711 Third Avenue
New York, N.Y. 10017
Dear Sirs:
THE VALUE LINE CASH FUND, INC. (the "Fund"), a Maryland corporation, is
registered as an Investment Company under the Investment Company Act of 1940
and an indefinite number of shares of its capital stock have been registered
under the Securities Act of 1933 to be offered continuously for sale to the
public in accordance with terms and conditions set forth in the Prospectus
included in such Registration Statement as it may be amended from time to
time.
In this connection, the Fund desires that your firm act as Distributor
and as Agent of the Fund for the sale and distribution of shares which have
been registered as described above and any additional shares which may become
registered during the term of this Agreement. You have advised the Fund that
you are willing to act as Distributor and Agent, and it is accordingly agreed
between us as follows:
1. The Fund hereby appoints you as Distributor and Agent for the sale
of its shares, pursuant to the aforesaid continuous public offering in
connection with any sales made to Fund investors in any states and/or
jurisdictions in which you are or shall from time to time become qualified as
a broker/dealer, or through securities dealers with whom you have entered
into sales agreements.
2. You hereby accept such appointment and agree to use your best
efforts to sell such shares, provided, however, that when requested by the
Fund at any time because of market or other economic considerations or
abnormal circumstances of any kind, you will suspend such efforts. The Fund
may also withdraw the offering of the shares at any time when required by the
provisions of any statute, order, rule or regulation of any governmental body
having jurisdiction. It is understood that you do not undertake to sell all
or any specific portion of the shares of the Fund.
<PAGE>
3. The shares shall be sold by you at net asset value without sales
charge. Shares may be sold directly to prospective purchasers or through
securities dealers who have entered into sales agreements with you. However,
in no event will shares be issued prior to the receipt by us of full payment
for such shares.
4. You agree that the Fund shall have the right to accept or reject
orders for the purchase of shares of the Fund. Any consideration which you
may receive in connection with a rejected purchase order will be returned
promptly. In the event that any cancellation of a share purchase order,
cancellation of a redemption order or error in the timing of the acceptance
of purchase or redemption orders shall result in a gain or loss, you agree
promptly to reimburse the Fund for any amount by which losses shall exceed
gains so arising; to retain any net gains so arising for application against
losses so arising in future periods and, on the termination of this
agreement to pay over to the Fund the amount of any such net gains which may
have accumulated. the Fund shall register or cause to be registered all
shares sold by your Company pursuant to the provisions hereof in such name or
names and amounts as you may request from time to time and the Fund shall
issue or cause to be issued certificates evidencing such shares for delivery
to you or pursuant to your direction if and to the extent that the
shareholder requests issuance of such share certificates.
5. The Fund has delivered to you a copy of its initial prospectus dated
on the effective date of its 1933 Act Registration Statement. It agrees that
it will use its best efforts to continue the effectiveness of the
Registration Statement under the Securities Act of 1933. The Fund further
agrees to prepare and file any amendments to its Registration Statement as
may be necessary and any supplemental data in order to comply with the
Securities Act of 1933.
6. The Fund is registered under the Investment Company Act of 1940 as
an investment company, and it will use its best efforts to maintain such
registration; and to comply with the requirements of said Act.
7. At your request, the fund will take, at its expense, such steps as
may be necessary and feasible to qualify shares for sale in states,
territories or dependencies of the United States of America, in the District
of Columbia and in foreign countries, in accordance with the laws thereof,
and to renew or extend any such qualifications; provided, however, that the
Fund shall not be required to qualify or to maintain the qualification of
shares in any state, territory, dependency, district or country where it
shall deem such qualification disadvantageous to the Fund.
2
<PAGE>
8. You agree:
(a) That neither you nor any of your officers will take any short
position in the shares of the Fund;
(b) To furnish to the Fund any pertinent information required to be
included with respect to you as Underwriter within the meaning of the
Securities Act of 1933 in any reports or registration required to be filed
with any government authority;
(c) You will not give any information or make any representations
other than as contained in the Registration Statement or prospectus filed
under the Securities Act of 1933, as in effect from time to time, or in any
supplemental sales literature authorized by the Fund for use in connection
with the sale of shares.
9. (a) We shall pay the cost of composition and printing of sufficient
copies of our prospectus as shall be required for distribution to our
shareholders and the expense of registering shares for sale under federal and
state securities laws.
(b) You shall pay all usual expenses of distribution, including
advertising and the costs of printing and mailing of the prospectus, other
than those furnished to existing shareholders.
10. This Agreement shall remain in effect until March 27, 1981 and
shall continue in effect from year to year thereafter provided:
(a) Such continuation shall be specifically approved at least
annually by the board of directors, including the vote of a majority of the
directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940) of any such
persons cast in person at a meeting called for the purpose of voting on such
approval or by a vote of the holders of a majority of the outstanding voting
securities of the Fund and by such a vote of the board of directors.
(b) You shall not have notified the Fund in writing at least sixty
days prior to the termination date that you shall not desire such
continuation.
11. This Agreement may not be amended or changed except in writing and
shall be binding upon and shall enure to the benefits of the parties hereto
and their respective successors, but this Agreement shall not be assigned by
either party and shall automatically terminate upon assignment.
3
<PAGE>
If the foregoing is in accordance with your understanding, kindly so
indicate by signing in the space provided below.
THE VALUE LINE CASH FUND, INC.
By /s/ [Illegible]
---------------------------------
Accepted:
VALUE LINE SECURITIES, INC.
By /s/ Thomas J. Sexton
----------------------------------
Vice President
Approved:
By
----------------------------------
4
<PAGE>
Exhibit 99(f)
CUSTODIAN AGREEMENT
Dated as of:
Between
THE VALUE LINE CASH FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Bank Appointed Custodian .......................................................... 1
2. Definitions ...................................................................... 1
(a) Authorized Person ............................................................ 1
(b) Security ..................................................................... 2
(c) Portfolio Security ........................................................... 2
(d) Officers' Certificate ........................................................ 2
(e) Book-Entry System and Depository ............................................. 2
3. A. Proper Instructions ........................................................... 3
B. Bank's Communications with Fund ............................................... 4
4. Separate Accounts ................................................................ 5
5. Certification as to Authorized Persons ........................................... 5
6. Custody of Cash and Securities ................................................... 6
A. Cash .......................................................................... 6
(a) Purchase of Securities ................................................... 6
(b) Redemptions .............................................................. 7
(c) Distributions and Expenses of Fund ....................................... 7
(d) Payment in Respect of Securities ......................................... 7
(e) Repayment of Cash ........................................................ 7
(f) Other Authorized Payments ................................................ 8
(g) Termination .............................................................. 8
B. Securities .................................................................... 8
(a) Book-Entry System ........................................................ 10
(b) Use of Direct Paper System for Commercial Paper .......................... 12
C. Options and Futures Transactions ..................... ........................ 14
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter .............................................. 14
(b) Puts, Calls and Futures Traded on Commodities Exchanges .................. 15
(c) Segregated Account ....................................................... 16
D. Segregated Account for "when issued", "forward commitment" and
Reverse Repurchase Agreement Transactions .................................... 17
7. Transfer of Securities ........................................................... 18
8. Redemptions ...................................................................... 20
9. Merger, Dissolution, etc. of Fund ................................................ 20
10. Actions of Bank Without Prior Authorization ...................................... 21
11. Maintenance of Records and Confidentiality ....................................... 23
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
12. Concerning the Bank .............................................................. 23
A. Performance of Duties ......................................................... 23
B Responsibility of Custodian ................................................... 24
C. No Duty of Bank ............................................................... 24
D. Fees and Expenses of Bank ..................................................... 25
E. Advances by Bank .............................................................. 26
13. Termination ...................................................................... 26
14. Notices .......................................................................... 28
15. Amendments ....................................................................... 29
16. Parties .......................................................................... 29
17. Governing Law .................................................................... 29
</TABLE>
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made as of this 21 day of June, 1990 between THE VALUE LINE
CASH FUND, INC., a corporation established under the laws of Maryland (the
"Fund"), and STATE STREET BANK AND TRUST COMPANY ("Bank").
The Fund, an open-end management investment company, desires to place
and maintain its portfolio securities and cash in the custody of the Bank. The
Bank has at least the minimum qualifications required by Section 17(f)(1) of
the Investment Company Act of 1940 to act as custodian of the portfolio
securities and cash of the Fund, and has indicated its willingness to so act,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. BANK APPOINTED CUSTODIAN. The Fund hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described, and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth.
2. DEFINITIONS. Whenever used herein, the terms listed below will have
the following meaning:
(a) AUTHORIZED PERSON. Authorized person will mean any of the persons
duly authorized to give Proper Instructions or otherwise act on behalf of the
Fund by appropriate resolution of the Board of Directors.
<PAGE>
(b) SECURITY. The term security as used herein will have the same
meaning as when such term is used in the Securities Act of 1933 as amended,
including, without limitation, any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security, certificate of deposit,
or group or index of securities (including any interest therein or based on
the value thereof), or any put, call, straddle, option, or privilege entered
into on a national securities exchange relating to a foreign currency, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to, or
option contract to purchase or sell any of the foregoing and futures, forward
contracts and options thereon.
(c) PORTFOLIO SECURITY. Portfolio security will mean any security
owned by the Fund.
(d) OFFICERS' CERTIFICATE. Officers' Certificate will mean unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Person of the Fund.
(e) BOOK-ENTRY SYSTEM AND DEPOSITORY. Book-Entry System shall mean
the Federal Reserve-Treasury Department Book Entry System for United States
government, instrumentality and agency securities operated by the Federal
Reserve Banks, its successor or successors and its nominee or nominees.
Depository shall mean the Depository
-2-
<PAGE>
Trust Company ("DTC"), a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of 1934,
it successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Fund's Directors.
3A. PROPER INSTRUCTIONS. For purposes of this Agreement, "Proper
Instructions" shall mean (i) instructions regarding the purchase or sale of
securities for the portfolio of the Fund, and payments and deliveries in
connection therewith, given by an Authorized Person as designated in an
Officers' Certificate, such instructions to be given in such form and manner
as the Bank and the Fund shall agree upon from time to time, and (ii)
instructions (which may be continuing instructions) regarding other matters
signed or initialled by such one or more persons from time to time designated
in an Officers' Certificate as having been authorized by the Directors of the
Fund. Oral instructions given by a person whom the Bank reasonably believes
to be authorized to give such instructions with respect to the
transaction involved will be considered Proper Instructions only if the Bank
receives written instructions (which may be sent by telecopier) confirming
such oral instructions, provided however that if the Bank is notified by an
Authorized person of the Fund that the Fund is unable to promptly confirm
such oral instructions in writing, then the Bank may act upon receipt of a
second oral instruction confirming such prior oral instruction. The Bank
shall compare the original oral instruction with any confirmatory written or
oral instruction, as the case may be, and shall report any discrepancy to the
Fund immediately, and the Bank shall be responsible for any expense incurred
in taking any action, including any reprocessing, necessary to correct any
-3-
<PAGE>
such discrepancy or error in Proper Instructions given by the Fund, to the
extent such expense is caused by the unreasonable delay of the Bank in
reporting such discrepancy to the Fund. Except as provided in the proceeding
sentence, the Fund shall be responsible, at the Fund's expense, for taking
any action, including any reprocessing, necessary to correct any such
discrepancy or error in Proper Instructions given by the fund, and to the
extent such action requires the Bank to act, the Fund shall give the Bank
specific Proper Instructions as to the action required. The Bank shall act
upon and comply with any subsequent Proper Instructions which modifies a
prior Proper Instruction. Upon receipt of an Officers' Certificate as to the
authorization by the Directors of the Fund accompanied by a detailed
description of procedures approved by the Fund, Proper Instructions may
include communication effected directly between electro-mechanical or
electronic devices provide that the Directors and the Bank are satisfied that
such procedures afford adequate safeguards for the Fund's assets.
3B. BANK'S COMMUNICATIONS WITH FUND. For purposes of this Agreement,
all communications from the Bank to the Fund shall be in writing (which may
be sent by means of a telecopier) and any such writing reasonably believed by
the Fund to be from a person authorized to make such communication on behalf
of the Bank may be relied upon the Fund. An oral communication from a person
whom the fund reasonably believes to be authorized to make such communication
on behalf of the Bank with respect to the transaction may be relied upon by
the Fund only if the Fund receives a written communication (which may be sent
by telecopier) confirming such oral communication, provided however, that if
the Fund is notified by such authorized person that the Bank is unable to
promptly confirm such oral communication in writing, then the Fund may act in
reliance upon receipt of a second oral communication confirming such prior
oral communication. The Fund shall compare the original oral communication
with any confirmatory written or oral
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communication, as the case may be, and shall report any discrepancy to the
Bank immediately, and the Fund shall be responsible for any expense incurred
in taking any action, including any reprocessing, necessary to correct any
such discrepancy or error in communications given by the Bank, to the extent
such expense is caused by the unreasonable delay of the Fund in reporting
such discrepancy to the Bank. Except as provided in the preceding sentence,
the Bank shall be responsible, at the Bank's expense, for any action taken,
including any reprocessing, necessary to correct any such discrepancy or
error in communications given by the Bank, and to the extent such action
requires the Bank to act, the Fund shall give the Bank specific Proper
Instructions as to the action required. The Fund may act in reliance upon
any subsequent communication from the Bank which modifies a prior
communication.
4. SEPARATE ACCOUNTS. If the fund has more than one series or
portfolio, the Bank will segregate the assets of the Fund into a Separate
Account for each such series or portfolio containing the assets of such
series or portfolio (and all investment earnings thereon), all as directed
from time to time by Proper Instructions.
5. CERTIFICATE AS TO AUTHORIZED PERSONS. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of
the names and signatures of the Authorized Persons, it being understood that
upon the occurrence of any change in the information set forth in the most
recent certification on file (including) without limitation any person named
in the most recent certification who is no longer an Authorized Person as
designated therein), the Secretary or Assistant Secretary of the Fund will
sign a new or amended certification setting forth the change and the new,
additional or omitted names or signatures. The bank will be entitled to rely
and act upon any Officers' Certificate given to
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it by the Fund which has been signed by Officers named in the most recent
certification.
6. CUSTODY OF CASH AND SECURITIES. As custodian for the Fund, the Bank
will keep safely all of the portfolio securities delivered to the Bank, and
will deposit to the account of the Fund all of the cash of the Fund delivered
to the Bank, as set forth below.
A. CASH. The Bank will open and maintain a separate account or
accounts in the name of the Fund or in the name of the Bank, as custodian of
the Fund, subject only to draft or order by the Bank acting pursuant to the
terms of this Agreement. The Bank will hold in such account or accounts as
custodian, subject to the provisions hereof (including sections 6(C) and
6(D), all cash received by it, for the account of the Fund. Upon receipt by
the Bank of Proper Instructions (which may be continuing instructions) or in
the case of payments for redemptions and repurchases of outstanding shares of
beneficial interest of the Fund, notification from the Fund's transfer agent
as provided in Section 8, requesting such payment, designating the payee or
the account or accounts to which the Bank will release funds or deposit, and
stating that is is for a purpose permitted under the terms of this Section
6(A), specifying the applicable subsection, or describing such purpose with
sufficient particularity to permit the Bank to ascertain the applicable
subsection, the Bank will make payments of cash held for the accounts of the
Fund, insofar as funds are available for that purpose, only as permitted in
(a)-(g) below.
(a) PURCHASE OF SECURITIES: upon the purchase of securities for
the Fund, against contemporaneous receipt of such securities by the Bank
registered in the name of the Fund or in the name of, or properly
endorsed and in form for transfer to, the Bank, or a nominee of the Bank,
or receipt for the account of the Bank through use of (1) the
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Book-Entry System pursuant to Section 6(B)(a)(3) below, (2) a Depository
pursuant to 6(B)(b) below, or (3) Book Entry Paper pursuant to Section
6(B)(c) below, each such payment to be made at the purchase price shown
on a broker's confirmation (or transaction report in the case of Book
Entry Paper) of purchase of the securities received by the Bank before
such payment is made, as confirmed in the Proper Instructions received by
the Bank before payment is made;
(b) REDEMPTIONS: in such amount as may be necessary for the
repurchase or redemption of shares of beneficial interest of the Fund
offered for repurchase or redemption in accordance with Section 8 of this
Agreement;
(c) DISTRIBUTIONS AND EXPENSES OF FUND: for the payment on the
account of the Fund of dividends or other distributions to shareholders
as may from time to time be declared by the Directors of the Fund,
interest, taxes, management or supervisory fees, distribution fees,
fees of the Bank for its services hereunder and reimbursement of the
expenses and liabilities of the Bank as provided hereunder, fees of any
transfer agent, fees for legal, accounting, and auditing services, or
other operating expenses of the Fund;
(d) PAYMENT IN RESPECT OF SECURITIES: for payments in connection
with the conversion, exchange or surrender of portfolio securities or
securities subscribed to by the Fund held by or to be delivered to the
Bank;
(e) REPAYMENT OF CASH: to repay the cash delivered to the Fund for
the purpose of collateralizing the obligation to return to the Fund
certificates borrowed from the Trust representing portfolio securities,
but only upon redelivery to the Bank of such borrowed certificates;
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(f) OTHER AUTHORIZED PAYMENTS: for other authorized transactions of
the Fund, or other obligations of the Fund incurred for proper Fund
purposes; provided that before making any such payment the Bank will also
receive a certified copy of a resolution of the Directors signed by an
Authorized Person of the Fund (other than the Person certifying such
resolution) and certified by its Clerk or Assistant Clerk, naming the
person or persons to whom such payment is to be made, and either
describing the transaction for which payment is to be made and declaring
it to be an authorized transaction of the Fund, or specifying the amount
of the obligation for which payment is to be made, setting forth the
purpose for which such obligation was incurred and declaring such purpose
to be a proper corporate purpose; and
(g) TERMINATION: upon the termination of this Agreement as
hereinafter set forth pursuant to Section 9 and Section 13 of this
Agreement.
The Bank is hereby authorized to endorse for collection and collect on
behalf of and in the name of the Fund all checks, drafts, or other negotiable
or transferrable instruments or other orders for the payment of money
received by it for the account of the Fund.
B. SECURITIES. Except as provided in subsections (a), (b) and (c) of
this Section 6(B), and in Section 6(C) and 6(D), the Bank as custodian, will
receive and hold pursuant to the provisions hereof, in a separate account or
accounts and physically segregated at all times from those of other
persons, any and all portfolio securities which may now or hereafter be
delivered to it by or for the account of the Fund. All such portfolio
securities will be held or disposed of by the Bank for, and subject at all
times to, the instructions of the Fund pursuant to the terms of this
Agreement. Subject to the
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specific provisions in Subparagraphs (a), (b), and (c) relating to securities
that are not physically held by the Bank, the Bank will register all
portfolio securities (unless otherwise directed by Proper Instructions or an
Officers' Certificate), in the name of a registered nominee of the Bank as
defined in the Internal Revenue Code and any Regulations of the Treasury
Department issued thereunder, which nominee shall be exclusively assigned to
the Fund, and will execute and deliver all such certificates in connection
therewith as may be required by such laws or Regulations or under the laws of
any State. The Bank will ensure that the specific portfolio securities of the
Fund held by it hereunder will be at all times identifiable.
The Bank will use the same care with respect to the safekeeping of
portfolio securities and cash of the Fund held by it as it uses in respect
of its own similar property but it need not maintain any special insurance
for the benefit of the Fund.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or
to registered in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
Neither the Bank nor any nominee of the Bank will vote any of the
portfolio securities held hereunder by or for the account of the Fund, except
in accordance with Proper Instructions of an Officers' Certificate.
The Bank will execute and deliver, or cause to be executed and delivered,
to the Fund all notices, proxies and proxy soliciting materials with respect
to such securities, such proxies to be executed by the registered holder of
such securities (if registered otherwise than in the name of the Fund), but
without indicating the manner in which such proxies are to be voted.
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(a) BOOK-ENTRY SYSTEM. Provided (i) the Bank has received a certified
copy of a resolution of the Directors of the Fund specifically approving
deposits of the Fund assets in the Book-Entry System, indicating that, and
(ii) for each year following such approval, the Directors of the Fund has
reviewed and approved the arrangement and has not delivered an Officer's
Certificate to the Bank indicating that it has withdrawn its approval:
1. The Bank may keep Securities of the Fund in the Book-Entry System
provided that such securities are represented in an account ("Account") of
the Bank (or its agent) in such System which shall not include any assets
of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers.
2. The records of the Bank (and any such agent) with respect to the
Fund's participation in the Book-Entry System through the Bank (or any
such agent) will identify by book entry securities belonging to the Fund
which are included with other securities deposited in the Account and
shall at all times during the regular business hours of the Bank (or such
agent) be open for inspection by duly authorized officers, employees or
agents of the Fund. Where securities are transferred to the Fund's account,
the Bank shall also, by book entry or otherwise, identify as belonging to
the Fund a quantity of securities in fungible bulk of securities (i)
registered in the name of the Bank or its nominee, or (ii) shown on the
Bank's account on the books of the Federal Reserve Bank.
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3. The Bank (or its agent) shall pay for securities purchased for
the account of the Fund or shall pay cash collateral against the return of
securities loaned by the Fund upon (i) receipt of advice from the Book-
Entry System that such Securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Bank (or its agent)
to reflect such payment and transfer for the account of the Fund. The Bank
(or its agent) shall transfer securities sold or loaned for the account of
the Fund upon
(a) receipt of advice from the Book-Entry System that payment for
Securities sold or payment of the initial cash collateral against the
delivery of securities loaned by the Fund has been transferred to the
Account, and
(b) the making of an entry on the records of the Bank (or its
agent) to reflect such transfer and payment for the account of the
Fund. Copies of all advices from the Book-Entry System of transfers of
Securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Bank and shall be provided to the Fund
at its request. The Bank shall send the Fund a confirmation, as
defined by Rule 17f-4 under the Investment Company Act of 1940, of any
transfers to or from the account of the Fund.
4. The Bank will promptly provide the Fund with any report obtained
by the Bank or its agent on the Book-Entry System's accounting system,
internal accounting control and procedures for safeguarding Securities
deposited in the Book-Entry System. The
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Bank will provide the Fund and cause any such agent to provide, at such
times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control
and procedures for safeguarding securities, including Securities
deposited in the Book-Entry System, relating to the services provided by
the Bank or such agent under the Agreement.
5. Anything to the contrary in the Agreement notwithstanding, the Bank
shall be liable to the Fund for any loss or damage to the Fund resulting
from use of the Book-Entry System by reason of any gross negligence,
wilful misfeasance or bad faith of the Bank or any of its agents or of any
of its or their employees or from any reckless disregard by the Bank or
any such agent of its duty to enforce effectively such rights as it may
have against the Book-Entry System; at the election of the Fund, it shall
be entitled to be subrogated for the Bank in any claim against the Book-
Entry System or any other person which the Bank or its agent may have as a
consequence of any such loss or damage if and to the extent that the Fund
has not been made whole for any loss or damage.
(b) USE OF DIRECT PAPER SYSTEM FOR COMMERCIAL PAPER. Provided (i)
the Bank has received a certified copy of a resolution of the Fund's
Directors specifically approving participation in a system maintained by
the Bank for the holding of commercial paper in direct paper form ("Direct
Paper") and (ii) for each year following such approval the Directors of
the Fund have received and approved the arrangements, upon receipt of
Proper Instructions and upon receipt of confirmation from an Issuer (as
defined below) that the Fund has purchased such Issuer's Direct Paper,
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the Bank shall issue and hold in direct paper form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a
direct paper agreement (the "Issuers"). In maintaining its Direct Paper
System, the Bank agrees that:
1. the Bank will maintain all Direct Paper held by the Fund in an
account of the Bank that includes only assets held by it for customers;
2. the records of the Bank with respect to the Fund's purchase of
Direct Paper through the Bank will identify, by book entry, Commercial
Paper belonging to the Fund which is included in the Direct Paper System
and shall at all times during the regular business hours of the Bank be
open for inspection by duly authorized officers, employees or agents of
the Fund.
3. (a) The Bank shall pay for Direct Paper purchased for the account
of the Fund upon contemporaneous (i) receipt of advice from the Issuer
that such sale of Direct Paper has been effected, and (ii) the making of
an entry on the records of the Bank to reflect such payment and transfer
for the account of the Fund.
(b) The Bank shall cancel such Direct Paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment
for such Direct Paper has been transferred to the Fund, and (ii) the
making of an entry on the records of the Bank to reflect such payment for
the account of the Fund.
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4. the Bank shall transmit to the Fund a transaction journal
confirming each transaction in Direct Paper for the account of the Fund
on the next business day following the transaction;
5. the Bank will send to the Fund such reports on its system of
internal accounting control as the Fund may reasonably request from time
to time;
C. OPINIONS AND FUTURES TRANSACTIONS.
(a) PUTS AND CALLS TRADED ON SECURITIES EXCHANGES, NASDAQ OR
OVER-THE-COUNTER.
1. The Bank shall take action as to put options ("puts") and call
options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of
any agreement entered into upon receipt of Proper Instructions between
the Bank, any broker-dealer registered under the Securities Exchange Act
of 1934 and a member of the National Association of Securities Dealers,
Inc., and, if necessary, the Fund relating to the compliance with the
rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations.
2. Unless another agreement requires it to do so, the Bank shall be
under no duty or obligation to see that the Fund has deposited or is
maintaining adequate margin, if required, with any broker in connection
with any option, nor shall the Bank be under any duty or obligation to
present such option to the broker for exercise unless it receives Proper
Instructions from the Fund. The Bank shall have no
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responsibility for the legality of any put or call purchased or sold on
behalf of the Fund, the propriety of any such purchase or sale, or the
adequacy of any collateral delivered to a broker in connection with an
option or deposited to or withdrawn from a Segregated Account as described
in sub-paragraph C of this Section 6(C). The Bank specifically, but not
by way of limitation, shall not be under any duty or obligation to:
(i) periodically check or notify the Fund that the amount of such
collateral held by a broker or held in a Segregated Account as described
in sub-paragraph (c) of this Section 6(C) is sufficient to protect such
broker of the Fund against any loss; (ii) effect the return of any
collateral delivered to a broker; or (iii) advise the Fund that any
option it holds, has or is about to expire. Such duties or obligations
shall be the sole responsibility of the Fund.
(b) PUTS, CALLS AND FUTURES TRADED ON COMMODITIES EXCHANGES.
1. The Bank shall take action as to puts, calls and futures contracts
("Futures") purchased or sold by the Fund in accordance with the provisions
of any agreement among he Fund, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with
the rules of the commodity Futures Trading Commission and/or any Contract
Market, or any similar organization or organizations, regarding account
deposits in connection with transactions by the Fund.
2. The responsibilities and liabilities of the Bank as to Futures,
puts and calls traded on commodities exchanges, any Futures Commission
Merchant
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account and the Segregated Account shall be limited as set forth in
sub-paragraph (a)(2) of this Section 6(c) as if such sub-paragraph
referred to Futures Commission Merchants rather than brokers, and
Futures and puts and calls thereon instead of options.
(c) SEGREGATED ACCOUNT.
The Bank shall upon receipt of Proper Instructions establish and
maintain a Segregated Account or Accounts for and on behalf of the Fund,
into which Account or Accounts may be transferred cash and/or securities
including securities maintained in an Account by the Bank pursuant to
Section 6(B) hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Bank and a broker-dealer registered under
the Exchange Act and a member of the NASD or any Futures Commission
Merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Options Clearing Corporation and of
any registered national securities exchange or the Commodity Futures
Trading Commission or any registered Contract Market, or of any similar
organization or organizations regarding escrow or other arrangements in
connection with transactions by the Fund, and (ii) for the purpose of
segregating cash or securities in connection with options purchased or
written by the Fund, or commodity futures purchased or written by the
Fund, and (iii) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered
investment companies and (iv) for other proper corporate purposes, BUT
ONLY, in the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Directors of the
Fund signed by an officer of the Fund and
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certified by the Clerk of an Assistant Clerk, setting forth the purpose
or purposes of such Segregated Account and declaring such purposes to be
proper corporate purposes.
D. SEGREGATED ACCOUNT FOR "WHEN-ISSUED", "FORWARD COMMITMENT" AND
REVERSE REPURCHASE AGREEMENT TRANSACTIONS. Notwithstanding the provisions of
Section 6(A), 6(B) and 6(C) hereof, the Bank will maintain a segregated
account (the "Segregated Account") in the name of the Fund (i) for the
deposit of liquid assets, such as cash, U.S. Government securities or other
high grade debt obligations, having a market value (market to the market on a
daily basis) at all times equal to not less than the aggregate purchase price
due on the settlement dates of all the Fund's then outstanding forward
commitment or "when-issued" agreements relating to the purchase of portfolio
securities and all the Fund's then outstanding commitments under reverse
repurchase agreements entered into with broker-dealer firms, and (ii) for the
deposit of any portfolio securities which the Fund has agreed to sell on a
forward commitment basis, all in accordance with Securities and Exchange
Commission Release No. IC-10666. No assets shall be deposited in the
Segregated Account except pursuant to Proper Instructions. Assets may be
withdrawn from the segregated account pursuant to Proper Instructions only
(a) for sale or delivery to meet the Fund's obligations under outstanding
firm commitment or when-issued agreements for the purchase of portfolio
securities and under reverse repurchase agreements, (b) for exchange for
other liquid assets of equal or greater value deposited in the Segregated
Account, (c) to the extent that the Fund's outstanding forward commitment or
when-issued agreements for the purchase of portfolio securities or reverse
repurchase agreements are sold to other parties or the Fund's obligations
thereunder are met from assets of the Fund other than those in the Segregated
Account, or (d) for delivery upon settlement of a forward commitment
agreement for the sale of portfolio securities.
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7. TRANSFER OF SECURITIES. The Bank will transfer, exchange, deliver or
release portfolio securities held by it hereunder, insofar as such securities
are available for such purpose, provided that before making any transfer,
exchange, delivery or release under this Section the Bank will receive Proper
Instructions requesting such transfer, exchange or delivery stating that it
is for a purpose permitted under the terms of this Section 7, specifying the
applicable subsection, or describing the purpose of the transaction with
sufficient particularity to permit the Bank to ascertain the applicable
subsection, only
(a) upon sales of portfolio securities for the account of the Fund,
against contemporaneous receipt by the Bank of payment therefor in full,
each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale of the portfolio securities received by
the Bank before such payment is made, as confirmed in the Proper
Instructions received by the Bank before such payment is made, provided
however, that portfolio securities may be delivered to the broker
selling the same for examination accordance with "street delivery"
custom;
(b) in exchange for or upon conversion into other securities alone
or other securities and cash pursuant to any plan or merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise;
(c) upon conversion of portfolio securities pursuant to their
terms into other securities;
(d) upon exercise of subscription, purchase or sale or other
similar rights represented by such portfolio securities;
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(e) for the purpose of redeeming in kind shares of beneficial
interest of the Fund upon authorization from the Fund;
(f) in the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(g) when such portfolio securities are called, redeemed or retired
or otherwise become payable;
(h) for the purpose of releasing certificates representing
portfolio securities of the Fund, against contemporaneous receipt by the
Bank of the fair market value of such security, as set forth in Proper
Instructions received by the Bank before such payment is made;
(i) for the purpose of tendering shares pursuant to a tender offer
therefor;
(j) for the purpose of delivering securities lent by the Fund to a
bank or broker-dealer, but only against receipt in accordance with
street delivery custom, except as otherwise provided in Subsections
6(B)(a) and (b) hereof, of adequate collateral as agreed upon from time
to time by the Fund and the Bank, and upon receipt of payment in
connection with any repurchase agreement relating to such securities
entered into by the Fund;
(k) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the
Bank will also receive a certified copy of resolution of the Directors
of the Fund, signed by an authorized officer of the Fund (other than the
officer certifying such resolution) and certified by its Secretary or
Assistant Secretary, specifying the portfolio securities to be
delivered, setting forth the transaction
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in or purpose for which such delivery is to be made, declaring such
transaction to be an authorized transaction of the Fund or such purpose
to be a proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made; and
(l) upon termination of this Agreement as hereinafter set forth
pursuant to Section 9 and Section 13 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (d), (f), (g), (h), (i) and (j) securities or cash receivable in
exchange therefor shall be delivered to the Bank.
8. REDEMPTIONS. In the case of payment of assets of the Fund held by
the Bank in connection with redemptions and repurchases by the Fund of
outstanding shares of beneficial interest, the Bank will rely on notification
by the Fund's transfer agent if receipt of a request for redemption and
certificates, if issued, in proper form for redemption before such payment is
made. Payment shall be made in accordance with the Articles of Incorporation
of the Fund, from assets available for said purposes.
9. MERGER, DISSOLUTION, ETC. OF FUND. In the case of the following
transactions not in the ordinary course of business, namely, the merger of
the Fund into or the consolidation of the Fund with another investment
company, the sale by the Fund of all, or substantially all of its assets to
another investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the portfolio securities
held by it under this Agreement and disburse cash only upon the order of the
Fund set forth in an Officers' Certificate, accompanied by a certified copy
of a resolution of the Fund's Directors authorizing any of the foregoing
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transactions. Upon completion of such delivery and disbursement and the
payment of the fees, disbursements and expenses of the Bank due to the Bank
pursuant to Section 12E hereof, this Agreement will terminate.
10. ACTIONS OF BANK WITHOUT PRIOR AUTHORIZATION. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, it will without prior authorization or
instruction of the Fund or the transfer agent:
(a) Receive and hold for the account of the Fund hereunder and
deposit in the account or accounts referred to in Section 6 hereof, all
income, dividends, interest and other payments or distribution of cash
with respect to the portfolio securities held thereunder;
(b) Present for payment all coupons and other income items held by
it for the account of the Fund which call for payment upon presentation
and hold the cash received by it upon such payment for the account of
the Fund in the account or accounts referred to in Section 6 hereof;
(c) Receive and hold for the account of the Fund hereunder and
deposit in the account or accounts referred to in Section 6 hereof all
securities received as a distribution on portfolio securities as a
result of a stock dividend, share split-up, reorganization,
recapitalization, merger, consolidation, readjustment, distribution of
rights and similar securities issued with respect to any portfolio
securities held by it hereunder.
(d) Execute as agent on behalf of the Fund all necessary ownership
and other certificates and affidavits required by the Internal Revenue
Code or the regulations of the Treasury Department issued thereunder, or
by the laws
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of any state, now or hereafter in effect, inserting the Fund's name on
such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so and as may be required to obtain payment in
respect thereof. The Bank will execute and deliver such certificates in
connection with portfolio securities delivered to it or by it under this
Agreement as may be required under the provisions of the Internal
Revenue Code and any Regulations of the Treasury Department issued
thereunder, or under the laws of any State;
(e) Present for payment all portfolio securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by
it upon payment for the account of the Fund in the account or accounts
referred to in Section 6 hereof; and
(f) Exchange interim receipts or temporary securities for
definitive securities.
The Bank will use all diligence to collect any funds which may to its
knowledge become collectible arising from such securities, including
dividends, interest and other income, and to transmit to the Fund notice
actually received by it of any call for redemption, offer of exchange, right
of subscription, reorganization or other proceedings affecting such
securities.
If portfolio securities upon which such income is payable are in default
or payment is refused after due demand or presentation, the Bank will notify
the Fund by telecopier of any default or refusal to pay no later than one
business day from the day on which it receives knowledge of such default or
refusal. In addition, the Bank will send the Fund a written report once each
month showing any income on any portfolio security held by it which is more
than ten days overdue on the date of such report and which has not previously
been reported.
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11. MAINTENANCE OF RECORDS. The Bank will maintain records with respect
to transactions for which the Bank is responsible pursuant to the terms and
conditions of this Agreement and in compliance with the applicable rules and
regulations under the Investment Company Act of 1940 as amended, and will
furnish the Fund daily with a statement of condition of the Fund. The Bank
will furnish to the Fund at the end of every month, and at the close of each
quarter of the Fund's fiscal year, a list of the portfolio securities and the
aggregate amount of cash held by it for the Fund. The books and records of
the Bank pertaining to its actions under this Agreement and reports by the
Bank or its independent accountants concerning its accounting system,
procedures for safeguarding securities and internal accounting controls will
be open to inspection and audit at reasonable times by officers of or
auditors employed by the Fund and will be preserved by the Bank in the manner
and in accordance with the applicable rules and regulations under the
Investment Company Act of 1940.
The Bank agrees to treat all records and other information relative to
the Fund and its shareholders as confidential, except it may disclose such
information after prior notification to and approval in writing by the Fund,
which approval shall not be unreasonably withheld. Nothing in this Section 11
shall prevent the Bank from divulging information to bank or securities
regulatory authorities or where the Bank may be exposed to civil or criminal
contempt proceedings for failure to comply.
12. CONCERNING THE BANK.
A. PERFORMANCE OF DUTIES.
(1) The Bank and the Fund shall each exercise reasonable care in
the performance of their respective duties and functions under this
Agreement.
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<PAGE>
(2) In its dealings with the Fund, the Bank shall be entitled to
rely upon any Officers' Certificate, Proper Instructions, resolution
of the Directors, telegram, facsimile communication, written notice,
or certificate.
B. RESPONSIBILITY OF CUSTODIAN. So long as and to the extent that it
is in the exercise of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received by it or delivered by it pursuant to this Contract and shall
beheld harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed by
the proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three-party futures or options agreement. The
Custodian shall be held harmless and be protected by the Fund and shall be
held to the exercise of reasonable care in carrying out the Proper
Instructions of the Fund. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) or mutually acceptable to
both parties on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
C. NO DUTY OF BANK. The Bank will be under no duty or obligation to
inquire into and will not be liable for:
(a) the validity of the issue of any portfolio securities
purchased by or for the Fund, the legality of the purchases thereof or
the propriety of the price incurred therefor;
-24-
<PAGE>
(b) the legality of any sale of any portfolio securities by or
for the Fund or the propriety of the amount for which the same are
sold:
(c) the legality of an issue or sale of any shares of common
stock of the Fund or the sufficiency of the amount to be received
therefor provided that it reflects the net asset value as provided
by the Fund;
(d) the legality of the repurchase of any shares of common
stock of the Fund or the propriety of the amount to be paid therefor
provided that it reflects the net asset value as provided by the
Fund;
(e) the legality of the declaration of any dividend by the
Fund or the legality of the distribution of any portfolio securities
as payment in kind of such dividend; or
(f) any property or moneys of the Fund unless and until
received by it, except as otherwise provided in Section 10 hereof,
and any such property or moneys delivered or paid by it pursuant to
the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any portfolio securities at any time delivered to or held
by it for the account of the Fund are such as may properly be held by the
Fund under the provisions of its Agreement and Declaration of Fund or
By-Laws, any federal or state statutes or any rule or regulation of any
governmental agency.
D. FEES AND EXPENSES OF BANK. The Fund will pay or reimburse the
Bank from time to time for any transfer taxes payable upon transfer of
portfolio securities made hereunder, and for the Bank's normal
disbursements,
-25-
<PAGE>
expenses and charges made or incurred by the Bank in the performance of
this Agreement (including any duties listed on any Schedule hereto, if
any). For the services rendered by the Bank hereunder, the Fund will pay
to the Bank such compensation or fees at such rate and at such times as
shall be agreed upon in writing by the parties from time to time. The
Bank will also be entitled to reimbursement by the Fund for normal
industry costs for securities transfers and services incurred in
conjunction with termination of this Agreement by the Fund.
E. ADVANCES BY BANK. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of Proper Instructions as required by this
Agreement for such payments by the Fund. Should such a payment or
payments, with advanced funds, result in an overdraft (due to
insufficiencies of the Fund's account with the Bank, or for any other
reason) any such related indebtedness shall be deemed a loan made by the
Bank to the Fund payable on demand and bearing interest at the current
rate charged by the Bank for such loans unless the Fund shall provide the
Bank with agreed-upon compensating balances. The Fund authorizes the
Bank, in its sole discretion, at any time to charge any overdraft or
indebtedness, together with interest due thereon, against any balance of
account standing to the credit of the Fund on the Bank's books.
13. TERMINATION.
(a) This Agreement may be terminated at any time without penalty upon
ninety days written notice delivered by either party to the other by means
of registered mail, and upon the expiration of such ninety days this
Agreement will terminate; provided, however, that the effective date of such
termination may be postponed to a date of delivery
-26-
<PAGE>
of such notice (i) by the Bank in order to prepare for the transfer by
the Bank of all of the assets of the Fund held hereunder, and (ii) by the
Fund in order to give the Fund an opportunity to make suitable
arrangements for a successor custodian. At any time after the termination
of this Agreement, the Fund will, at its request, have access to the
records of the Bank relating to the performance of its duties as
custodian.
(b) In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer
of all cash and the delivery of all portfolio securities duly endorsed
and all records maintained under Section 11 to the successor custodian
when appointed by the Fund. The obligation of the Bank to deliver and
transfer over the assets of the Fund held by it directly to such
successor custodian will commence as soon as such successor is appointed
and will continue until completed as aforesaid. If the Fund does not
select a successor custodian within ninety days from the date of delivery
of notice of termination the Bank may, subject to the provisions of
subsection (c) of this Section 13, deliver the portfolio securities and
cash of the Fund held by the Bank to a bank or trust company of its own
selection which meets the requirements of Section 17(f)(1) of the
Investment Company Act of 1940 and has a reported capital, surplus and
undivided profits aggregating not less than $2,000,000, to be held as the
property of the Fund under terms similar to those on which they were held
by the Bank, whereupon such bank or turst company so selected by the Bank
will become the successor custodian of such assets of the Fund with the
same effect as though selected by the Directors of the Fund.
-27-
<PAGE>
(c) Prior to the expiration of ninety days after notice of
termination has been given, the Fund may furnish the Bank with an order
of the Fund advising that a successor custodian cannot be found willing
and able to act upon reasonable and customary terms and that there has
been submitted to the shareholders of the Fund the question of whether
the Fund will be liquidated or will function without a custodian for the
assets of the Fund held by the Bank. In that event the Bank will deliver
the portfolio securities and cash of the Fund held by it, subject as
aforesaid, in accordance with one of such alternatives which may be
approved by the requisite vote of shareholders, upon receipt by the Bank
of a copy of the minutes of the meeting of shareholders at which action
was taken, certified by the Fund's Secretary.
14. NOTICES. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and mailed or delivered to it
at its office at the address set forth below; namely:
(a) In the case of notices sent to the Fund to:
The Value Line Cash Fund, Inc.
c/o Value Line Inc.
711 3rd Avenue
New York, New York 10017
Attn: Treasurer
(b) In the case of notices sent to the Bank to:
State Street Bank and Trust Company
Mutual Fund Services
1776 Heritage Drive
North Quincy, MA 02171
-28-
<PAGE>
or at such other place as such party may from time to time
designate in writing.
15. AMENDMENTS. This Agreement may not be altered or amended, except by
an instrument in writing, executed by both parties, and in the case of the
Fund, such alteration or amendment will be authorized and approved by its
Directors.
16. PARTIES. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Directors; and provided
further that termination proceedings pursuant to Section 13 hereof will not
be deemed to be an assignment within the meaning of this provision.
17. GOVERNING LAW. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts.
-29-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate and their respective corporate seals to be affixed
hereto as of the date first above written by their respective officers
thereunto duly authorized.
THE VALUE LINE CASH FUND, INC.
By: /s/ Illegible
---------------------------------------
ATTEST:
/s/ Illegible
- -----------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Illegible
--------------------------------------
ATTEST:
/s/ Illegible
- -----------------------------
-30-
<PAGE>
[Logo] STATE STREET
STATE STREET BANK AND TRUST COMPANY
Custodian Fee Schedule
VALUE LINE, INC.
Cash Fund
Special Situations Fund
Convertible Fund
Value Line Fund
Income Fund
Leveraged Growth Investors
New York Tax Exempt Trust
Aggressive Income Trust
U.S. Government Securities Fund
Centurion Fund
Tax Exempt Fund
-Tax Exempt Fund High Yield Portfolio
-Tax Exempt Fund Money Market Portfolio
U.S. Government Securities Trust
Strategic Asset Management Trust
- -------------------------------------------------------------------------------
I. ADMINISTRATION
CUSTODY SERVICE - Maintain custody of fund assets. Settle portfolio
purchases and sales. Report buy and sell fails. Determine and collect
portfolio income. Make cash disbursements and report cash transactions.
Monitor corporate actions.
The administration fee shown below is an annual charge, billed and
payable monthly, based on month end net assets.
ANNUAL FEES PER PORTFOLIO
<TABLE>
<CAPTION>
Fund Net Assets Custody
--------------- ---------------
<S> <C>
First $200 million 1 Basis Point
Excess .75 Basis Point
Minimum Monthly
Charges for New Funds* $1,500
</TABLE>
II. GLOBAL CUSTODY - Services provided include:
Cash Movements, Foreign Communication, Foreign Exchange
(local currency settlements).
<TABLE>
<S> <C>
Euroclear 5 Basis Points
on Existing Holdings
</TABLE>
<TABLE>
<CAPTION>
Fund Net Assets Annual Fees
--------------- -------------------
<S> <C>
First $50 Million 22 Basis Points
Over $50 Million 20 Basis Points
Minimum Per Client $5,000.00 Annually
</TABLE>
* No minimums shall be applied to existing funds.
<PAGE>
[Logo] STATE STREET
III. PORTFOLIO TRADES - FOR EACH LINE ITEM PROCESSED
<TABLE>
<S> <C>
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $ 7.50
New York and Global Physical Settlements $25.00
Maturity Collections $ 8.00
PTC Purchase, Sale, Deposit or Withdrawal $20.00
All other trades $16.00
IV. OPTIONS
Option charge for each option written or
closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
V. INTEREST RATE FUTURES
Transactions--no security movement $ 8.00
VI. PRINCIPAL REDUCTION PAYMENTS
Per paydown $ 7.00
VII. DIVIDEND AND INTEREST CHARGES
(For items held at the Request
of Traders over record date in street form) $50.00
</TABLE>
VIII. SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security
shipments and the preparation of special reports will be
subject to negotiation. Fees for automated pricing, yield
calculation and other special items will be negotiated
separately.
<TABLE>
<S> <C> <C>
IX. HORIZON GATEWAY ACCESS SYSTEM
Monthly charge for access to all 14 funds $1,000.00
(installation waived)
</TABLE>
<PAGE>
[Logo] STATE STREET
X. BALANCE CREDIT
A balance credit equal to the 90 day treasury bill rate on the last
Monday of the month, will be credited on 88% of the average collected
balance in the custodian accounts. This will be applied to the custodial
and transfer agent charges for that month and credits can be carried
forward on a monthly basis.
XI. OUT-OF-POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but are
not limited to the following:
Wire Charges ($5.25 per wire in and $5.00 out)
Postage and Insurance
Courier Service
Legal Fees
Supplies Related to Fund Records
Rush Transfer--$8.00 Each
Transfer Fees
Sub-custodian Charges
Federal Reserve Fee for Return Check items over $2,500--$4.25
GNMA Transfer--$15 each
PTC Deposit/Withdrawal for same day turnarounds--$50.00
VALUE LINE, INC. STATE STREET BANK AND TRUST CO.
By /s/ [Illegible] By /s/ [Illegible]
------------------------------ ------------------------------
Title Secretary Title Vice President
------------------------------ -----------------------------
Date 6/21/90 Date 6/12/90
------------------------------ ------------------------------
<PAGE>
AMENDMENT TO CUSTODIAN CONTRACT
AMENDMENT made by and between STATE STREET BANK AND TRUST COMPANY (the
"Custodian") each Fund listed on Appendix A (the "Fund").
WHEREAS, the Custodian and each Fund are parties to a Custodian
Contract, as amended (each a "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and each Fund desires to amend the relevant
Custodian Contract;
NOW THEREFORE, the Custodian and each Fund hereby amend and revise in
its entirety the defined term "Authorized person" in Section 2(a) of the
Custodian Contract as follows:
"Authorized person" of a Fund shall mean any of the persons
duly authorized to give Proper Instructions or otherwise act
with respect to such Fund on behalf of the Board of Trustees/
Directors of such Fund by appropriate resolution of such Board
of Trustees/Directors, it being understood that the signatures
of two Authorized persons of a Fund shall be required for the
release of the assets of the Fund.
<PAGE>
Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force
and effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative as of
the 1st day of October, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
--------------------------------
Ronald E. Logue
Executive Vice President
Attest: /s/ Thomas M. Lenz
-----------------------------
Thomas M. Lenz
Vice President
EACH FUND LISTED ON APPENDIX A
By: /s/ Jean B. Buttner
--------------------------------
Name: Jean B. Buttner
Title: Chairman/President
Attest: /s/ David T. Menigson
-----------------------------
Name: David T. Menigson
Title: Secretary
2
<PAGE>
APPENDIX A
LIST OF FUNDS
Value Line Aggressive Income Trust
Value Line Asset Allocation Fund, Inc.
Value Line Cash Fund, Inc., (The)
Value Line Centurion Fund, Inc.
Value Line Convertible Fund, Inc.
Value Line Fund, Inc. (The)
Value Line Income Fund, Inc., (The)
Value Line Leveraged Growth Investors, Inc.
Value Line New York Tax Exempt Trust
Value Line Small-Cap Growth Fund, Inc.
Value Line Special Situations Fund, Inc.
Value Line Strategic Asset Management Trust
Value Line Tax-Exempt Fund, Inc. (The)
Value Line U.S. Government Securities Fund, Inc.
Value Line U.S. Multi-National Company Fund, Inc.
3
<PAGE>
Exhibit 99(g)
PETER D. LOWENSTEIN
ATTORNEY AT LAW
TWO GREENWICH PLAZA, SUITE 100
GREENWICH, CONNECTICUT 06830
203 622-3932
FAX 203 622-0321
February 19, 1999
The Value Line Cash Fund, Inc.
220 East 42nd Street
New York, NY 10017
Gentlemen:
I have acted as special counsel to The Value Line Cash Fund, Inc., a
Maryland corporation (the "Fund"), in connection with certain matters,
including the issuance of shares of its common stock, $.10 par value (the
"Common Stock").
As special counsel for the Fund, I am familiar with its Charter and
By-laws. I have examined the prospectus included in Post-Effective Amendment
No. 22 to its Registration Statement on Form N-1A, File No. 2-71066 (the
"Registration Statement"), substantially in the form in which it is to become
effective (the "Prospectus"). I have further examined and relied upon a
certificate of the Maryland Statement Department of Assessments and Taxation
to the effect that the Fund is duly incorporated and existing under the laws
of the State of Maryland and is in good standing and duly authorized to
transact business in the State of Maryland.
I have also examined and relied upon such corporate records of the Fund
and other document and certificates with respect to factual matters as I have
deemed necessary to render the opinion expressed herein. I have assumed,
without independent verification, the genuineness of all signatures, the
authenticity of all documents submitted to me as originals and the conformity
with originals of all documents submitted to me as copies.
Based on such examination, I am of the opinion and so advise you that:
1. The Fund is duly organized and validly existing as a
corporation in good standing under the laws of the
State of Maryland.
2. The shares of Common Stock of the Fund to be offered
for sale pursuant to the Prospectus are to the extent
of the number of shares authorized to be issued, duly
authorized and, when sold, issued and paid for as
contemplated by the Prospectus, will have been validly
and legally issued and will be fully paid and
nonassessable.
<PAGE>
I am a member of the bars of the States of Connecticut and New York and I
do not purport to be an expert in, and express no opinion with respect to,
the laws of any jurisdiction other than the federal laws of the United
States and the laws of the States of Connecticut and New York.
I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Peter D. Lowenstein
------------------------
Peter D. Lowenstein
PDL:psp
2
<PAGE>
Exhibit 99(j)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 22 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 12, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of The Value Line Cash Fund, Inc., which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Financial Statements" in the Statement of Additional
Information.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 22, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 317,852
<INVESTMENTS-AT-VALUE> 317,852
<RECEIVABLES> 2,854
<ASSETS-OTHER> 261
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 320,967
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,656
<TOTAL-LIABILITIES> 3,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 317,365
<SHARES-COMMON-STOCK> 317,366
<SHARES-COMMON-PRIOR> 303,164
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (54)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 317,311
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,657
<OTHER-INCOME> 0
<EXPENSES-NET> 1,839
<NET-INVESTMENT-INCOME> 15,818
<REALIZED-GAINS-CURRENT> 16
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 15,834
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 15,818
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 805,869
<NUMBER-OF-SHARES-REDEEMED> 807,486
<SHARES-REINVESTED> 15,818
<NET-CHANGE-IN-ASSETS> 14,217
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (70)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,285
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,839
<AVERAGE-NET-ASSETS> 321,180
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .051
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .051
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
