<PAGE>
VALUE LINE U.S. GOVERNMENT SECURITIES FUND, INC.
SERVICE AND DISTRIBUTION PLAN (THE "PLAN")
The Plan is adopted as of this 16 day of March, 2000, by the Board of
Directors or Trustees of each Fund listed above (the "Fund").
1. The Plan is adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "Act") so as to allow the Fund to make
payments as contemplated herein, in conjunction with the distribution
of shares of Common Stock of the Fund ("Shares"). Payments also may
be made by Value Line, Inc., the Fund's investment adviser, out of its
fees, its past profits or any other source available to it.
2. The Plan is designed to finance activities of Value Line
Securities, Inc. ("VLS") principally intended to result in sale of the
Shares and to include the following: (a) to provide incentive to
securities dealers to sell Shares and to provide administrative support
services to the Fund and its shareholders; (b) to compensate other
participating financial institutions and organizations (including
individuals) for providing administrative support services to the Fund
and its shareholders; (c) to pay for costs incurred in conjunction
with advertising and marketing of Shares including expenses of
preparing, printing and distributing prospectuses and sales literature
to prospective shareholders, securities dealers and others, and for
servicing the accounts of shareholders and (d) other costs incurred
in the implementation and operation of the Plan.
3. As compensation for the services to be provided under this Plan,
VLS shall be paid a fee at the annual rate of 0.25% of the Fund's
average daily net assets.
4. All payments to securities dealers, participating financial institutions
and other organizations shall be made pursuant to the terms of a
Distribution Agreement between VLS and such dealer, institution or
organization.
5. The Board of Directors or Trustees shall be provided, at least
quarterly, with a written report of all amounts expended pursuant to the
Plan and the purpose for which the amounts were expended.
<PAGE>
6. The Plan will become effective at the later of July 1, 2000 or upon
approval by (a) a majority of the outstanding shares of Common Stock of
the Fund and (b) a majority of the Board of Directors or Trustees who
are not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation of the
Plan or in any agreements entered into in connection with the Plan,
pursuant to a vote cast in person at a meeting called for the purpose of
voting on the approval of the Plan.
7. The Plan shall continue unless terminated in accordance with the terms
stated below, and thereafter shall continue automatically for successive
annual periods, provided such continuance is approved at least annually
in the manner provided by the Act.
8. The Plan may be amended at any time by the Board of Directors or
Trustees provided that (a) any amendment to increase materially the
costs which the Fund may bear pursuant to the Plan shall be effective
only upon approval by a vote of a majority of the outstanding voting
securities of the Fund and (b) any material amendments of the terms of
the Plan shall become effective only upon approval as provided in
paragraph 6 (b) hereof.
9. The Plan is terminable without penalty at any time by (a) vote of a
majority of the Board of Directors or Trustees of the Fund, including a
majority of the Directors or Trustees who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plan or in any agreements
entered into in connection with the Plan, or (b) vote of a majority of
the outstanding voting securities on the Fund.
10. While the Plan is in effect, the selection and nomination of
Directors or Trustees who are not "interested persons" (as defined in
the Act) of the Fund shall be committed to the discretion of the
Directors or Trustees who are not "interested persons."
11. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period not
less than six years from the date thereof, the first two years in an
easily accessible place.
