<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1999
FILE NO. 2-86337
FILE NO. 811-3835
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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. 16 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 16 /X/
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VALUE LINE CENTURION 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 1, 1999 pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
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<PAGE>
VALUE LINE CENTURION FUND, INC.
--------------------------------
PROSPECTUS
MAY 1, 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 is the Fund's goal? 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 6
WHO MANAGES THE FUND
Investment Adviser PAGE 7
Management fees PAGE 7
Portfolio management PAGE 7
ABOUT YOUR ACCOUNT
How to buy and sell shares PAGE 8
Dividends, distributions and taxes PAGE 9
FINANCIAL HIGHLIGHTS
Financial Highlights PAGE 10
<PAGE>
FUND SUMMARY
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WHAT IS THE FUND'S GOAL?
The Fund's investment objective is long-term growth of
capital. Although the Fund will strive to achieve this goal,
there is no assurance that it will. Shares of the Fund are
available to the public only through the purchase of certain
variable annuity and variable life insurance contracts issued
by the Guardian Insurance & Annuity Company, Inc. ("GIAC").
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
To achieve the Fund's goals, we invest substantially all of
the Fund's net assets in common stocks. In selecting
securities for purchase or sale, we rely on the Value Line
Timeliness-TM- Ranking System which compares the Adviser's
estimate of the probable market performance of each stock
during the next twelve months relative to all of the
approximately 1,700 stocks under review.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Investing in any mutual fund involves risk, including the
risk that you may lose part or all of the money you invest.
The price of Fund shares will increase and decrease according
to changes in the value of the Fund's investments. The Fund
will be affected by changes in stock prices which tend to
fluctuate more than bond prices. An investment in the Fund is
not a complete investment program and you should consider it
just one part of your total investment program. For a more
complete discussion of risk, please turn to page 6.
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 S&P 500-Registered Trademark-, a broad based market
index. You should remember that unlike the Fund, this index
is unmanaged and does not include the costs of buying,
selling, and holding the securities. 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 31.49%
1990 5.56%
1991 52.18%
1992 5.93%
1993 9.21%
1994 -2.21%
1995 40.08%
1996 17.34%
1997 21.39%
1998 27.47%
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER: Q4 1998 +29.26%
WORST QUARTER: Q3 1990 (15.29%)
</TABLE>
AVERAGE ANNUAL RETURN AS OF 12/31/98
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
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FUND 27.47% 19.99% 19.78%
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S&P 500-REGISTERED TRADEMARK- INDEX 28.58% 24.06% 19.21%
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</TABLE>
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>
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MANAGEMENT FEES 0.50%
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DISTRIBUTION AND SERVICE (12B-1) FEES NONE
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OTHER EXPENSES 0.09%
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TOTAL ANNUAL FUND OPERATING EXPENSES 0.59%
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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. 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>
$60 $189 $329 $738
</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 market sector or securities that we think make
the best investments. The following is a description of how
the Adviser pursues the Fund's objectives.
In selecting securities for purchase or sale, the Adviser
relies on the Value Line Timeliness-TM- Ranking System which
has evolved after many years of research and has been used in
substantially its present form since 1965. It is based upon
historical prices and reported earnings, recent earnings and
price momentum and the degree to which the last reported
earnings deviated from estimated earnings, among other
factors. The Timeliness Rankings are published weekly in the
Standard Edition of The Value Line Investment Survey for
approximately 1,700 stocks. On a scale of 1 (highest) to 5
(lowest), the rankings compare an estimate of the probable
market performance of each stock during the coming twelve
months relative to all 1,700 stocks under review. The
Rankings are updated weekly to reflect the most recent
information.
At least 90% of the Fund's portfolio will typically consist
of common stocks ranked 1 or 2 by the Value Line Timeliness
Ranking System. Stocks that fall in rank below 2 will be sold
as soon as practical, although stocks ranked 1 or 2 may also
be sold if the Adviser deems a sale to be advisable. There
are at present 100 stocks ranked 1 and 300 stocks ranked 2.
The Value Line Timeliness Ranking System does not eliminate
market risk, but the Adviser believes that it provides
objective standards for determining whether the market is
undervaluing or overvaluing a particular security. Reliance
upon the 1 and 2 rankings, whenever feasible, is a
fundamental policy of the Fund which may not be changed
without shareholder approval. Accordingly, the Fund generally
will purchase and hold securities which are believed to have
relatively superior potential for capital appreciation over
the next six to twelve months. Reliance on the rankings is no
assurance that the Fund will perform more favorably than the
market in general over any particular period.
TEMPORARY DEFENSIVE POSITION
From time to time in response to adverse market or other
conditions, we may invest a portion of the Fund's net assets
in cash or cash equivalents, debt securities or bonds, for
temporary defensive purposes. To the extent we invest in such
securities, we may not achieve the Fund's goal.
PORTFOLIO TURNOVER
The Fund may engage in active and frequent trading of
portfolio securities in order to take advantage of better
investment opportunities to achieve its investment objectives
which would result in higher brokerage commissions and other
expenses. High portfolio turnover may negatively affect the
Fund's performance.
5
<PAGE>
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, and the risk that you may lose part or all of the
money you invest. Therefore, before you invest in this Fund
you should carefully evaluate the risks. Because of the
nature of the Fund, you should consider an investment in it
to be a long-term investment that will best meet its
objectives when held for a number of years. The Fund limits
its investments to stocks ranked 1 or 2 by the Value Line
Timeliness Ranking System. Over certain periods of time, the
price of other securities may appreciate to a greater extent
than those securities in the Fund's portfolio. The Fund's use
of the Value Line Ranking Systems involves the risk that over
certain periods of time the price of securities not covered
by the Ranking Systems, or lower ranked securities, may
appreciate to a greater extent than those securities in the
Fund's portfolio. Please see the Statement of Additional
Information for a further discussion of risks. Information on
the Fund's recent holdings can be found in the Fund's current
annual or semi-annual report.
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 has been in business since
1931. A 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 0.50% 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 AND SELL SHARES
You may invest in the Fund only by purchasing certain
variable annuity and variable insurance contracts
("Contracts") issued by GIAC. The Fund continuously offers
its shares to GIAC's separate accounts at the net asset value
per share next determined after a proper purchase request has
been received by GIAC. GIAC then offers to owners of the
Contracts ("Contractowners") units in its separate accounts
which directly correspond to shares in the Fund. GIAC submits
purchase and redemption orders to the Fund based on
allocation instructions for premium payments, transfer
instructions and surrender or partial withdrawal requests
which are furnished to GIAC by such Contractowners.
Contractowners can send such instructions and requests to
GIAC at P.O. Box 26210, Lehigh Valley, Pennsylvania 18002 by
first class mail or 3900 Burgess Place, Bethlehem,
Pennsylvania 18017 by overnight or express mail. The Fund
redeems shares from GIAC's separate accounts at the net asset
value per share next determined after receipt of a redemption
order from GIAC.
THE ACCOMPANYING PROSPECTUS FOR A GIAC VARIABLE ANNUITY OR
VARIABLE LIFE INSURANCE POLICY DESCRIBES THE ALLOCATION,
TRANSFER AND WITHDRAWAL PROVISIONS OF SUCH ANNUITY OR POLICY.
/ / 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. We
price securities for which market prices or quotations are
available at their market value. We price securities for
which market valuations are not available at their fair
market value as determined by the Board of Directors. Any
investments which have a maturity of less than 60 days we
price at amortized cost. The amortized cost method of
valuation involves valuing a security at its cost and
accruing any discount or premium over the period until
maturity, regardless of the impact of fluctuating interest
rates on the market value of the security.
8
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to pay dividends from its net investment
income and distribute any capital gains that it has realized
annually. All dividends and capital gains distributions will
be automatically reinvested, at net asset value, by GIAC's
separate accounts in additional shares of the Fund.
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 prospectus for
GIAC's variable annuities and variable life insurance
policies describe the federal income tax treatment of
distributions from such contracts to Contractowners.
9
<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
800-221-3253.
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
SELECTED DATA FOR A SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH YEAR:
YEARS ENDED DECEMBER 31,
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1998 1997 1996 1995 1994
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NET ASSET VALUE, BEGINNING OF YEAR $25.52 $24.83 $24.25 $17.83 $18.52
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income .09 .09 .08 .12 .10
Net gains or losses on
securities (both realized and
unrealized) 6.67 5.30 3.71 6.96 (.51)
- ----------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 6.76 5.39 3.79 7.08 (.41)
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.09) (.09) (.12) (.10) (.01)
Distributions from capital
gains (1.75) (4.61) (3.09) (.56) (.27)
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Total distributions (1.84) (4.70) (3.21) (.66) (.28)
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $30.44 $25.52 $24.83 $24.25 $17.83
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN* 27.47% 21.39% 17.34% 40.08% (2.21)%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
thousands) $ 815,207 $ 720,091 $ 639,341 $ 525,449 $ 352,745
Ratio of expenses to average net
assets .59%(1) .60%(1) .59%(1) .62% .61%
Ratio of net income to average net
assets .31% .35% .36% .60% .57%
Portfolio turnover rate 112% 85% 141% 114% 122%
</TABLE>
(1) After offset of custody credits. Excluding the custody
credits would not have changed the expense ratio.
* Total returns do not reflect the effects of charges
deducted under the terms of GIAC's variable contracts.
Including such charges would reduce the total return for
all periods shown.
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10
<PAGE>
FOR MORE INFORMATION
Additional information about the Fund's investments is
available in the Fund's annual and semi-annual reports to
shareholders. In the Fund's annual report, you will find a
discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its
last fiscal year. You can find more detailed information
about the Fund in the current Statement of Additional
Information dated May 1, 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 the
Fund, c/o GIAC, 201 Park Avenue South, New York, NY 10003 or
call toll-free 800-221-3253.
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 CUSTODIAN
VALUE LINE, INC. STATE STREET BANK AND TRUST COMPANY
220 EAST 42ND STREET 225 FRANKLIN STREET
NEW YORK, NY 10017-5891 BOSTON, MA 02110
</TABLE>
<TABLE>
<S> <C>
File no. 811-3835
</TABLE>
<PAGE>
VALUE LINE CENTURION FUND, INC.
220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818
www.valueline.com
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STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
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This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of Value Line Centurion Fund, Inc. dated
May 1, 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
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<S> <C>
Description of the Fund and Its Investments and Risks............................... B-2
Management of the Fund.............................................................. B-4
Investment Advisory and Other Services.............................................. B-6
Brokerage Allocation and Other Practices............................................ B-8
Capital Stock....................................................................... B-9
Purchase, Redemption and Pricing of Shares.......................................... B-9
Taxes............................................................................... B-10
Performance Data.................................................................... B-11
Financial Statements................................................................ B-11
</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 1983. The Fund's investment adviser is Value
Line, Inc. (the "Adviser").
INVESTMENT STRATEGIES AND RISKS. The primary investment objective of the
Fund is long-term growth of capital. The Fund's investment objective cannot be
changed without shareholder approval. There can be no assurance that the Fund
will achieve its investment objective. There are risks in all investments,
including any stock investment, and in all mutual funds that invest in stocks.
The Fund seeks to achieve its investment objective by investing
substantially all of its assets in common stocks ranked 1 or 2 for year-ahead
performance by the Value Line Timeliness Ranking System. However, a portion of
its assets may be held from time to time in cash, debt securities, bonds or
preferred stocks when the Adviser deems such a position appropriate in the light
of economic or market conditions. The Fund may also purchase restricted
securities, write covered call options, purchase and sell stock index futures
contracts and options thereon, and enter into repurchase agreements.
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 Board of Directors
monitors the creditworthiness of parties with which the Fund enters into
repurchase agreements.
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 corporations, which may include
issuers of portfolio securities held by the Fund, to varying degrees based upon
various factors, including, but
B-2
<PAGE>
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.
Securities will not be purchased while borrowings are outstanding. No assets
of the Fund may be pledged, mortgaged or otherwise encumbered, transferred
or assigned to secure a debt.
(iii)
The Fund may not engage in the underwriting of securities except to
the extent that the Fund may be deemed an underwriter as to
restricted securities under the Securities Act of 1933 in selling portfolio
securities.
(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 write, purchase or sell any put or call options or
any combination thereof.
(ix)
The Fund may not invest more than 5% of its total assets in the
securities of any one issuer or purchase more than 10% of the
outstanding voting securities, or any other class of securities, of any one
issuer. For purposes of this restriction, all outstanding debt securities of
an issuer are considered as one class, and all preferred stock of an issuer
is considered as one class. 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 its
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.
(xi)
The Fund may not purchase securities for the purpose of exercising
control over another company.
B-3
<PAGE>
(xii)
The Fund may not invest more than 5% of the value of its total
assets in warrants or more than 2% of such value in warrants which
are not listed on the New York or American Stock Exchanges except that
warrants attached to other securities are not subject to these limitations.
(xiii)
The Fund may not invest in commodities or commodity contracts.
(xiv)
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.
(xv)
The primary investment objective of the Fund is long-term growth of
capital.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values or assets will not be
considered a violation of the restriction. For purposes of industry
classifications, the Fund follows the industry classifications in The Value Line
Investment Survey.
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.
Since the Fund will be used as an investment vehicle for variable annuity
contracts and variable life insurance policies issued through The Guardian
Insurance & Annuity Company Inc. ("GIAC"), its investments may be subject in the
future to further restrictions under the insurance laws and regulations of the
states in which such contracts or policies are offered for sale.
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.
</TABLE>
B-4
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------------------------- --------------------- ---------------------------------------------
<S> <C> <C>
*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
791 North Broadway January 1, 1999; President, Skidmore College,
Saratoga Springs, NY 12866 1987-1998; Director of Adirondack Trust
Age 63 Company.
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
Philip J. Orlando, CFA Vice President Chief Investment Officer with the Adviser's
Age 40 Asset Management Division since 1995.
Nancy Bendig Vice President Portfolio Manager with the Adviser
Age 43
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.
B-5
<PAGE>
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>
As of the date of this Statement of Additional Information, The Guardian
Insurance & Annuity Company, Inc., a Delaware corporation, owned all of the
outstanding shares of the Fund. Such shares are allocated to one or more
Guardian separate accounts which are registered as unit investment trusts under
the 1940 Act. The address of The Guardian Insurance & Annuity Company, Inc. is
201 Park Avenue South, New York, New York. It is a subsidiary of The Guardian
Life Insurance Company of America, a mutual life insurance company organized
under the laws of the State of New York.
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 at an annual rate of 0.50% of the
Fund's average daily net assets. During 1996, 1997 and 1998, the Fund paid or
accrued to the Adviser advisory fees of $2,927,833, $3,485,040 and $3,632,919,
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. In addition, the Fund has agreed to reimburse GIAC for certain
administrative and shareholder servicing expenses incurred by GIAC on behalf of
the Fund. See note 4 of the notes to the Fund's financial statements for the
year ended December 31, 1998. 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.
B-6
<PAGE>
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 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. 9th 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.
B-7
<PAGE>
BROKERAGE ALLOCATION AND OTHER PRACTICES
Orders for the purchase and sale of portfolio securities are placed with
brokers and dealers who, in the judgment of the Adviser, are able to execute
them as expeditiously as possible and at the best obtainable price. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. Purchases and
sales of securities which are not listed or traded on a securities exchange will
ordinarily be executed with primary market makers acting as principal, except
when it is determined that better prices and executions may otherwise be
obtained. The Adviser is also authorized to place purchase or sale orders with
brokers or dealers who may charge a commission in excess of that charged by
other brokers or dealers if the amount of the commission charged is reasonable
in relation to the value of the brokerage and research services provided. Such
allocation will be in such amounts and in such proportions as the Adviser may
determine. Orders may also be placed with brokers or dealers who sell shares of
the Fund or other funds for which the Adviser acts as investment adviser, but
this fact, or the volume of such sales, is not a consideration in their
selection. During 1996, 1997 and 1998, the Fund paid brokerage commissions of
$1,324,485, $763,773 and $1,298,590, respectively, of which $835,307 (63%),
$448,753 (59%) and $785,670 (61%), respectively, was paid to Value Line
Securities, Inc., the Fund's distributor and a subsidiary of the Adviser. Value
Line Securities, Inc. clears transactions for the Fund through unaffiliated
broker-dealers.
The Board of Directors has adopted procedures incorporating the standards of
Rule 17e-1 under the 1940 Act which requires that the commissions paid to Value
Line Securities or any other "affiliated person" be "reasonable and fair"
compared to the commissions paid to other brokers in connection with comparable
transactions. The procedures require that the Adviser furnish reports to the
Directors with respect to the payment of commissions to affiliated brokers and
maintain records with respect thereto. During 1998, $1,085,655 (84%) of the
Fund's brokerage commissions were paid to brokers or dealers solely for their
services in obtaining the best prices and executions; the balance, or $212,935
(16%), went to brokers or dealers who provided information or services to the
Adviser and, therefore, indirectly to the Fund and to shareholders of the Value
Line funds. The information and services furnished to the Adviser include the
furnishing of research reports and statistical compilations and computations and
the providing of current quotations for securities. The services and information
were furnished to the Adviser at no cost to it; no such services or information
were furnished directly to the Fund, but certain of these services might have
relieved the Fund of expenses which it would otherwise have had to pay. Such
information and services are considered by the Adviser, and brokerage
commissions are allocated in accordance with its assessment of such information
and services, but only in a manner consistent with the placing of purchase and
sale orders with brokers and/or dealers, which, in the judgment of the Adviser,
are able to execute such orders as expeditiously as possible and at the best
obtainable price. The Fund is advised that the receipt of such information and
services has not reduced in any determinable amount the overall expenses of the
Adviser.
PORTFOLIO TURNOVER. The Fund's annual portfolio turnover rate may exceed
100%. A rate of portfolio turnover of 100% would occur if all of the Fund's
portfolio were replaced in a period of one year. To the extent that the Fund
engages in short-term trading in attempting to achieve its objective,
B-8
<PAGE>
it may increase portfolio turnover and incur higher brokerage commissions and
other expenses than might otherwise be the case. The Fund's portfolio turnover
rate for recent fiscal years is shown under "Financial Highlights" in the Fund's
Prospectus.
CAPITAL STOCK
Each share of the Fund's common stock, $1 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. Shares of the Fund are available to the
public only through the purchase of certain contracts or policies issued by
GIAC. There are no minimum investor requirements.
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.
The value of shares of the Fund on redemption may be more or less than the
shareholder's cost, depending upon the market value of the Fund's assets at the
time.
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 these 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. Securities listed on a securities exchange and
over-the-counter securities traded on the NASDAQ national market are valued at
the closing sales price on the date as of which the net asset value is being
determined. In the absence of closing sales prices for such securities and for
securities traded in the over-the-counter market, the security is valued at the
midpoint between the latest available and representative asked and bid prices.
Securities for which market quotations are not readily available or which are
not readily marketable and all other assets of the
B-9
<PAGE>
Fund are valued at fair value as the Board of Directors or persons acting at
their direction may determine in good faith. Short-term instruments with
maturities of 60 days or less at the date of purchase are valued at amortized
cost, which approximates market.
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 GIAC's separate accounts. The Fund's net
investment income is made up of dividends and interest, less expenses. The
computation of net capital gains takes into account any capital loss carry
forward of the Fund.
Federal tax regulations require that mutual funds that are offered through
insurance company separate accounts must meet certain diversification
requirements to preserve the tax-deferral benefits provided by the variable
contracts which are offered in connection with such separate accounts. The
Adviser intends to diversify the Fund's investments in accordance with those
requirements. The prospectuses for GIAC's variable annuities and variable life
insurance policies describe the federal income tax treatment of distributions
from such contracts to Contractowners.
B-10
<PAGE>
PERFORMANCE DATA
From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
or other performance data on the Fund will be accompanied by information on the
Fund's average annual compounded rate of return for the periods of one year,
five years and ten years, all ended on the last day of a recent calendar
quarter. The Fund may also advertise aggregate total return information for
different periods of time.
The Fund's average annual compounded rate of return is determined by
reference to a hypothetical $1,000 investment that includes capital appreciation
and depreciation for the stated period, according to the following formula:
P(1+T) to the power of n = ERV
Where: P = a hypothetical initial purchase order of
$1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the
hypothetical $1,000 purchase at the end
of the period.
The Fund's average annual total returns for the one, five and ten year
periods ending December 31, 1998 were 27.47%, 19.99% and 19.78%, respectively.
The Fund's total return may be compared to relevant indices and data from
Lipper Analytical Services, Inc., Morningstar 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 in the Fund.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield, total return or
distribution rate for any period should not be considered as a representation of
what an investment may earn or what an investor's total return, yield or
distribution rate may be in any future period.
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>
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Articles of Incorporation.
(b) By-laws.
(c) Not applicable.
(d) Investment Advisory Agreement.
(e) Distribution Agreement.
(f) Not applicable.
(g) Custodian Agreement.
(h) Agreement with The Guardian Insurance & Annuity Company, Inc.
(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 Sixth (7) 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.
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER OTHER EMPLOYMENT
- -------------------------- -------------------------------- ---------------------------------------------------
<S> <C> <C>
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>
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)
C-2
<PAGE>
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-3
<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. 16 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 9, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of Value Line Centurion 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-4
<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 22nd day of February, 1999.
VALUE LINE CENTURION 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-5
<PAGE>
Exhibit 99(a)
ARTICLES OF INCORPORATION
OF
VALUE LINE CENTURION FUND, INC.
FIRST: We, the subscribers, Mark K. Tavel and Thomas Sexton, each of whose
post office address is 711 Third Avenue, New York, New York 10017, 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 Value Line Centurion Fund, Inc.
(hereinafter called the "Corporation").
THIRD: The purpose for which the Corporation is formed and the business or
objects to be transacted, carried on and promoted by it, is to act as an open
end investment company of the management type registered as such with the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the general laws of
the State of Maryland now or hereafter in force.
FOURTH; The post office address of the place of the principal office of the
Corporation within the State of Maryland is 929 North Howard Street, Baltimore,
Maryland 21201, c/o The Prentice-Hall Corporation System, Maryland.
The Corporation's resident agent within the State of Maryland 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 $50,000,000 consisting of 50,000,000
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 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 record of one--
<PAGE>
third of the shares of capital stock of the Corporation outstanding and entitled
to vote thereat shall constitute a quorum at any meeting of the shareholders,
except as otherwise provided by law. 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 corporation law 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 or in any amendment thereto.
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 designated
proportion greater than a majority of the shares or votes entitled to be cast,
such action shall be effective and valid if 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 the
CAPITAL stock of the Corporation acquired by, it after the ISSUE thereof, or
otherwise) other than sttch 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, until such number shall
be increased or decreased pursuant to the By-Laws of the Corporation, is ten.
The number of Directors shall never be less than the number prescribed by the
General Corporation Law. The names of the persons who shall act as Directors of
the Corporation until the first annual meeting of the shareholders and until
their successors are duly elected and qualified are as follows:
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George W. Anderson
Arnold Bernhard
Jean B. Buttner
Shelby Cullom Davis
Leo R. Futia
Edmund F. Mansure
Charles E. Reed
Ruxton M. Ridgely
Paul Craig Roberts
Mark K. Tavel
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.
(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, but no class shall be elected for a period shorter than that from the
time of the election following the division into 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 persons as the Board of Directors shall designate for the
purpose, or by 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 capital stock of the Corporation outstanding and entitled to vote
in respect thereto.
(7) A. To the maximum extent permitted by the General Corporation Law
as from time to time amended, the Corporation shall indemnify its currently
acting and its former directors, officers, and employees and those persons who,
at the request of the Corporation, serve or have served another corporation,
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partnership, joint venture, trust or other enterprises in one or more of such
capacities. The indemnification provided for herein shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
B. Anything herein contained to the contrary notwithstanding, no
officer or director of the Corporation shall be indemnified for any liability to
the Corporation or its security holders to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved In the conduct of his office.
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 1: 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 shared hereafter authorized and any shares redeemed or
repurchased by the Corporation, except that only shares previously contracted to
be sold may be issued during any period when the determination of net asset
value is suspended pursuant to the provisions of Section III hereof. 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 III 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
term,
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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 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 III 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
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
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value of such shares next determined as set forth in Section III hereof after
receipt of such application.
2.03 PAYMENT. Payment for such shares shall be made to the shareholders
of record within seven 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 shares redeemed,
the value of assets delivered shall be determined as set forth in Section III
hereof as of the same time 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 III
after the termination of such suspension, and payment shall be made within
seven days after the date upon which the application was made plus the period
after such application 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 III hereof, provided payment
is not made for the shares prior to the time as 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
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full payment for shares of the Corporation purchased by such shareholder.
(c) The right of redemption provided by each of the foregoing
subsection 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.
SECTION III: NET ASSET VALUE OF SHARES
3.01 BY WHOM DERTERMINED. The Board of Directors shall have the
power and duty to determine 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 reasonably 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 Corporation. Such suspension shall take effect at 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 the end, except that the suspension
shall terminate in any event on the first day on which (a) the condition
giving rise to the suspension shall have ceased to exist, and (b) no other
condition exists under which suspension is authorized under this Section
3.03. Each
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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 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 agreements,) (F) all
repurchase agreements, and (G) all other property of every kind and nature,
including prepaid expenses.
(2) VALUATION OF ASSETS. The valuation 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 on 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.
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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 Corporation specifically authorized by the Board of Directors.
(3) THE CORPORATION'S LIABILITIES. The 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 by 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 Corporations' 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 Section III:
(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, 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 issue and sale thereof) shall thereupon be deemed to be an
asset of the Corporation.
(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 no longer outstanding and the price until paid
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.
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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 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.
5.01 NAME. The Corporation acknowledges that it is utilizing its
corporate name pursuant to contract with Value Line Inc., a New York
corporation, and that Value Line 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 Value Line Inc. reserves to itself
and any successor to its business the right to grant and withdraw the
nonexclusive 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 Value Line Inc. or any subsidiary or affiliate thereof, or any
successor to the business of any thereof, shall be the investment advisor.
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
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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 any pay dividends and distributions in cash,
securities or other property from surplus or any funds legally 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
frequency of the effectiveness of such declaration; 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 exclusive or non-exclusive
underwriting contracts or distribution agreements 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 or by the provisions of Article SEVENTH hereof;
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 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 of 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
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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
5.04. 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 5.04 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.
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 right 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, the undersigned incorporators of Value Line
Centurion Fund, Inc., who executed the foregoing Articles of Incorporation,
hereby acknowledge the same to be their act and further acknowledge that, to the
best of their knowledge the matters and facts set forth herein are true in all
material respects under the penalties of perjury.
Dated August 1, 1983
/s/ Mark K. Tavel
----------------------
Mark K. Tavel
/s/ Thomas J. Sexton
----------------------
Thomas Sexton
<PAGE>
Exhibit 99(b)
BY-LAWS OF
VALUE LINE CENTURION FUND, INC.
ARTICLE I
STOCKHOLDERS
SECTION 1. No annual meeting of the stockholders of the Corporation
shall be held unless required by applicable law or otherwise determined by the
Board of Directors. Any annual meeting of the stockholders held pursuant to the
foregoing sentence shall be held at such time and place as may be determined by
the Board of Directors and shall be designated in the notice of meeting.
SECTION 2. Special meetings of the stockholders for any purpose or
purposes may be held upon call by the Chairman of the Board or the President
or by a majority of the Board, the President, a Vice President, the secretary
or any director at the request in writing of a majority of the Board of
Directors or of stockholders holding at least 25% of the stock of the
Corporation outstanding and entitled to vote at the meeting, at such time and
at such place within or without the State of Maryland as may be fixed by the
Chairman of the Board or the President or the Board of Directors or by the
stockholders holding at least 25% of the stock of the Corporation outstanding
and so entitled to vote, as the case may be, and as may be stated in the
notice setting forth such call. Such request shall state the purpose or
purposes of the proposed meeting and only such purpose or purposes so
specified may properly be brought before such meeting.
<PAGE>
SECTION 3. Written or printed notice of every annual or special
meeting of stockholders stating the time and place thereof ind the general
nature of the business proposed to be transacted at any such meeting, shall
be delivered personally or mailed at least ten days prior thereto to each
stockholder of record entitled to vote at the meeting at his address as the
same appears on the books of the Corporation. Such further notice shall be
given as may be required by law. Meetings may be held without notice if all
of the stockholders entitled to vote are present or represented at the
meeting, or if notice is waived in writing, either before or after the
meeting, by those not present or represented at the meeting. No notice of an
adjourned meeting of the stockholders other than an announcement of the time
and place thereof at the preceding meeting shall be required.
SECTION 4. At every meeting of the stockholders the holders of
record of one-third of the outstanding shares of the stock of the Corporation
entitled to vote at the meeting, whether present in person or represented by
proxy, shall constitute a quorum, except as otherwise provided by law. If at
any meeting there shall be no quorum, the holders of record, entitled to vote
at the meeting, of a majority of such shares so present or represented may
adjourn the meeting from time to time to a date not more than 120 days from
the original record date, without notice other than announcement at the
meeting, until a quorum shall have been obtained when any business may be
transacted which might have been transacted as first convened had there been
a quorum.
SECTION 5. Meetings of the stockholders shall be presided over by
the Chairman of the Board, or, if he is not present, by the President or a
Vice President or, in their absence, by a chairman to be chosen at the
meeting. The Secretary of the Corporation or, if he is not present, an
Assistant Secretary of the Corporation or, if neither is present, a secretary
to be chosen at the meeting shall act as secretary of the meeting.
SECTION 6. Each stockholder entitled to vote at any meeting shall have
one vote in person or by proxy for each share of stock held by him, but no proxy
shall be voted on after 11 months from its date, unless such proxy provides for
a longer period. All elections of directors shall be had and all questions,
except as otherwise
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provided by law or by the Articles of Incorporation or by these By-Laws,
shall be decided by a majority vote of the stockholders present or
represented and entitled to vote thereat in person or by proxy. It shall be
the duty of the officer who shall have charge of the stock ledger of the
Corporation to prepare and make, at least ten days before every election of
directors, a complete list of the stockholders entitled to vote at such
elections arranged in alphabetical order. Such list shall be open, at the
place where said election is to be held for said ten days, to the examination
of any stockholder and shall be produced and kept at the time and place of
election during the whole time thereof and subject to the inspection of any
stockholder who may be present.
SECTION. 7. The vote on the election of directors, and other
questions properly brought before any meeting, need not be by ballot except
when so demanded by a majority of the shareholders present and entitled to
vote thereon, or when so ordered by the chairman of such meeting. The
chairman of each meeting at which directors are to be elected by ballot or at
which any question is to be so voted on shall appoint two inspectors of
election. No director or candidate for the office of director shall be
appointed as such inspector. Inspectors shall first take and subscribe an
oath or affirmation faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of their ability,
and shall take charge of the polls and after the balloting shall make a
certificate of the result of the vote taken. Except when the stock transfer
books of the Corporation shall have been closed, or a date shall have been
fixed as a record date for the determination of its stockholders entitled to
vote, as hereinafter provided by Section 8 of this Article I, no share of
stock shall be voted on at any election for directors which shall have been
transferred on the books of the Corporation within twenty days next preceding
such election of directors.
SECTION 8. The Board of Directors may close the stock transfer books of
the corporation for a period not exceeding twenty days preceding the date of any
meeting of stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of stock shall go into effect; or, in lieu of closing the stock
transfer books, the Board of Directors may fix
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in advance a date, not exceeding sixty days preceding the date of any meeting
of stockholders, or the date for the payment of any dividend, or the date for
the allotment of rights, or the date when any change or conversion or
exchange of stock shall go into effect, or a date in connection with the
obtaining of any consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at any such meeting and at
any adjournment thereof, or entitled to receive payment of any such dividend,
or to any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of stock, or to give such consent,
and in such case such stockholders, and only such stockholders, as shall be
stockholders of record on the date so fixed, shall be entitled to such notice
of, and to vote at, such meeting and any adjournment thereof, or to receive
payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. The Board of Directors of the Corporation shall consist
of not less than three nor more than fifteen persons, who need not be
stockholders. The number of Directors (within the above limits) shall be
fixed from time to time by a majority of the Board or Directors. The
directors shall be elected annually and shall hold office, unless sooner
removed, until their respective successors are elected and qualify. A
majority of the whole Board, but in no event less than two, shall constitute
a quorum for the transaction of business, but if at any meeting of the Board
there shall be less than a quorum present, a majority of the directors
present may adjourn the meeting from time to time, until a quorum shall have
been obtained, when any business may be transacted which might have been
transacted at the meeting as first convened had there been a quorum. No
notice of an adjourned meeting of the directors other than an announcement of
the time and place thereof at the preceding meeting shall be required, The
acts of the majority of the directors present at any meeting at which
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there is a quorum, shall, except as otherwise provided by law, by the Articles
of Incorporation or by these By-Laws, be the acts of the Board.
SECTION 2. Unless otherwise provided in the Articles of
Incorporation or these By-Laws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors or from any
other cause may be filled by a majority of the directors then in office. In
the case of a vacancy resulting from any cause other than an increase in the
authorized number of directors, such action shall be deemed to be duly taken
even if a majority of such directors is less than a quorum. A director so
chosen shall hold office until the next annual meeting of stockholders and
until his respective successor is elected and shall have qualified. The
stockholders, at any meeting called for the purpose, may remove, with or
without cause, any director and, at any meeting called for the purpose, fill
the vacancy in the Board thus caused.
SECTION 3. Meetings of the Board of Directors shall be held at such
place, within or without the State of Maryland, as may from time to time be
fixed by resolution of the Board or as may be specified in the call of any
meeting. Regular meetings of the Board of Directors shall be held at such times
as may from time to time be fixed by resolution of the Board and special
meetings may be held at any time upon the call of a majority of the persons
constituting the Board of Directors or the Chairman of the Board, or the
President or the Secretary, by oral, telephonic, telegraphic or written notice,
duly served on or sent or mailed to each director at least twenty-four hours
before the meeting. The notice of any special meeting shall specify the purposes
thereof. A meeting of the Board may be held without notice immediately after the
annual meeting of the stockholders at the same place at which such meeting is
held. Notice need not be given of regular meetings of the Board held at times
fixed by resolution of the Board. Meetings may be held at any time without
notice if all of the directors are present or if notice is waived in writing,
either before or after the meeting, by those not present.
SECTION 4. Meetings of the Board of Directors shall be presided over
by the Chairman of the Board or the President or, if neither is present, by a
Vice President or, if none of the above are present, by a chairman to be chosen
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at the meeting, and the Secretary or, if he is not present, an Assistant
Secretary of the Corporation or, if neither is present, a secretary to be
chosen at the meeting shall act as secretary of the meeting.
SECTION 5. The directors shall receive such fees or compensation for
services to the Corporation (including attendance at meetings of the Board or
of committees designated by the Board pursuant to Section 7 of this
Article II) as may be fixed by the Board of Directors from time to time by
resolution or resolutions.
SECTION 6. The Board of Directors may, by resolution or resolutions,
passed by a majority of the whole Board, designate one or more committees,
each such committee to consist of two or more of the directors of the
Corporation, which, to the extent provided in said resolution or resolutions
and subject to the General Laws of the State of Maryland, shall have and may
exercise the powers of the Board in the management of the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. A majority of the
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 membership
of, to fill vacancies in, or to dissolve any such committee.
SECTION 7. Any action required or permitted to be taken at any
meeting of the Board of Directors or by any committee thereof may be taken
without a meeting if an unanimous written consent which sets forth the action
is signed by each member of the Board or committee and is filled with the
minutes of Proceedings of the Board or Committee. Members of the Board or a
committee thereof may participate in a meeting by means of a conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other at the same time.
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ARTICLE III
OFFICERS
SECTION 1. The Board of Directors, as soon as practicable after the
election of directors at the annual meeting of the stockholders held in each
year, shall appoint from among their members a Chairman of the Board and a
President of the Corporation and shall appoint one or more Vice Presidents, a
Secretary and a Treasurer, Assistant Secretaries and Assistant Treasurers and,
from time to time, any other officers and agents as it may deem proper. Any two
of the above-mentioned offices, except those of the President and and a 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 be required by law, or by these By-Laws to be executed, acknowledged
or verified by any two or more officers.
SECTION 2. The term of office of all officers shall be one year or
until their respective successors are chosen; but any officer or agent chosen or
appointed by the Board of Directors may be removed, if the board of directors
finds, in its judgment, that the best interests of the Corporation will be
served, at any time by the affirmative vote of a majority of the members of the
Board then in office.
SECTION 3. Subject to such limitations as the Board or Directors may
from time to time prescribe, the officers of the Corporation shall each have
such powers and duties as generally appertain to their respective offices, as
well as such powers and duties as from time to time may be conferred by the
Board of Directors. Any officer, agent or employee of the Corporation may be
required by the Board of Directors to give bond for the faithful discharge of
his duties, in such sum and of such character as the Board may from time to time
prescribe.
ARTICLE IV
CERTIFICATE OF STOCK
SECTION 1. The interest of each stockholder of the Corporation shall be
evidenced by a certificate or certificates for shares of stock of the
Corporation, in such form as the Board of Directors may from time to
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time prescribe, or by a recording of each stockholders interest on the
records of the Corporation's Transfer Agent. The certificates for shares of
stock of the Corporation shall be signed by the Chairman of the Board, the
President or a Vice President, and the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and shall be countersigned and
registered in such manner, if any, as the Board may by resolution prescribe,
provided, however, that, where any such certificate is signed (1) by a
transfer agent or by an assistant transfer agent or (2) by a transfer clerk
acting on behalf of the Corporation and a registrar, the signature of any
such Chairman of the Board, President, Vice President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary, may be facsimile, engraved or
printed. In case any officer or officers whose manual or facsimile signatures
appear or any certificate or certificates of this Corporation shall cease to
be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates of stock have been
actually countersigned and issued, such certificate or certificates may be
countersigned and issued as though such person or persons whose manual
facsimile signatures appear thereon had not ceased to be such officer or
officers of the Corporation unless, prior to issuance, written instructions
to the contrary shall have been received by the transfer agent, signed by an
officer of this Corporation, and they shall be recognized by this Corporation
as valid and binding certificates of stock of this Corporation for all
purposes and in all respects.
SECTION 2. The shares of stock of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person
or by a duly authorized attorney, upon surrender for cancellation of a
certificate or certificates for a like number of shares, with a duly executed
assignment and power of transfer endorsed thereon or attached thereto, and
with such proof of the authenticity of the signatures as the Corporation or
its agent may reasonably require.
SECTION 3. No certificate for shares of stock of the Corporation
shall be issued in place of any certificate alleged to have been lost,
stolen, mutilated or destroyed except upon production of such evidence of the
loss, theft, mutilation or destruction and upon indemnification of the
Corporation and its agents to such extent and in such manner as the Board of
Directors may from time to time prescribe.
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ARTICLE V
CORPORATE BOOKS
The books of the Corporation may be kept outside of the State of
Maryland at such place or places as the Board of Directors may from time to time
determine.
ARTICLE VI
SIGNATURES
SECTION 1. Except as otherwise provided in these By-Laws or as the
Board of Directors may generally or in particular cases authorize the execution
thereof in some other manner, all deeds, leases, transfers, contracts, bonds,
notes, checks, drafts and other obligations made, accepted or endorsed by the
Corporation and all endorsements, assignments, transfers, stock powers or other
instruments of transfer of securities owned by or standing in the name of the
Corporation shall be signed or executed by two officers of the Corporation, who
shall be the Chairman of the Board, the President or a Vice President and a Vice
President, the Secretary or the Treasurer.
SECTION 2. The Chairman of the Board or the President of the
Corporation or, in their absence or disability or at their request, a Vice
President of the Corporation may authorize from time to time the signature and
issuance of proxies to vote upon shares of stock of other corporations owned by
the Corporation unless otherwise provided by the Board of Directors. All proxies
for shares held in the name of the Corporation shall be signed in the name of
the Corporation by two officers of the Corporation, who shall be the Chairman of
the Board or the President or a Vice President and a Vice President, the
Secretary or the Treasurer.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall be determined by the Board of
Directors.
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ARTICLE VIII
CORPORATE SEAL
The corporate seal of the Corporation shall consist of a flat faced
circular die with the word "Maryland", together with the name of the
Corporation, the year of its organization, and such other appropriate legend as
the Board of Directors way from time to time determine, cut or engraved thereon.
In lieu of the corporate seal, when so authorized by the Board of Directors or
a duly empowered committee thereof, a facsimile thereof may be impressed or
affixed or reproduced. Notwithstanding the forgoing, if the Corporation is
required to place its corporate seal to a document, it is sufficient to meet the
requirements of any law, rule or regulation relating to a corporate seal to
place the word "(seal)" adjacent to the signature of the authorized officer of
the Corporation.
ARTICLE IX
OFFICES
The Corporation and the stockholders and the directors may have offices
outside the State of Maryland at such places as shall be determined from time to
time by the Board of Directors.
ARTICLE X
AMENDMENTS
The By-Laws of the Corporation may be amended, added to, rescinded or
repealed at any meeting of the stockholders, or by vote of a majority of the
directors then in office at any meeting of the Board of Directors; except that
after the initial issue of any shares of capital stock of the Corporation, the
provisions of this Article X may be altered, amended or repealed only upon the
affirmative vote of the holders of a majority of all shares of capital stock of
the Corporation at the time outstanding and entitled to vote.
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ARTICLE XI
ADDITIONAL PROVISIONS
SECTION 1. The books of account of the Corporation shall be examined by
an independent firm of public accountants, selected as required by law, at the
close of each fiscal year of the Corporation and at such other times, if any, as
may be directed by the Board of Directors of the Corporation. A report to the
stockholders based upon each such examination shall be mailed to each
stockholder of the Corporation, of record on such date with respect to each
report as may be determined by the Board of Directors, at his address as the
same appears on the books of the Corporation. Each such report shall show the
assets and liabilities of the Corporation as of the close of the year covered by
the report, its income and expenses, the net asset value of its outstanding
shares, the securities in which the funds of the Corporation were then invested
and such other matters as the Board of Directors shall determine.
SECTION 2. In any case where an officer or director of the Corporation
or of any investment adviser of the Corporation, or a member of any committee of
the Corporation, is also an officer or director of another corporation and the
purchase or sale of the securities issued by such other corporation is under
consideration, the officer, director or committee member concerned will abstain
from participating in any decision made on behalf of the Corporation to purchase
or sell any securities issued by such other corporation.
SECTION 3. The Corporation shall have as custodian or custodians one
or more trust companies or banks of good standing, each having a capital,
surplus and undivided profits aggregating not less than ten million dollars
($10,000,000) and the funds and securities held by the Corporation shall be
kept in the custody of one or more such custodians, provided such custodian
or custodians can be found ready and willing to act, and further provided
that the Corporation may use as sub-custodians, for the purpose of holding
any foreign securities and related funds of the Corporation, such foreign
banks as the Board of Directors may approve and as shall be permitted by law.
Upon the resignation or inability to serve of any custodian or custodians,
the Corporation will use its best efforts to
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obtain a successor custodian or custodians and will require that the cash and
securities owned by the Corporation be delivered directly to such successor
custodian or custodians. In the event, however, that no successor custodian
or custodians can be found, the Corporation will submit to its stockholders,
before permitting delivery of the cash and securities owned by the
Corporation to other than a successor custodian or custodians, the question
of whether the Corporation shall be liquidated or shall function without any
custodian.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
The Corporation shall indemnify to the full extent authorized by law
any person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or serves or served any other enterprise as a
director, officer or employee at the request of the Corporation.
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Exhibit 99(d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 10 day of Aug. 1988, between VALUE LINE
CENTURION FUND INC., a Maryland corporation (herinafter called "the Fund"),
and VALUE LINE, INC., a New York corporation (hereinafter called "the
Company");
WITNESSETH:
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
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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 1/2 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 rcceived; 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.
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5. NAME OF FUND. The Company consents to the use by the Fund of the
name "Value Line Centurion 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.
VALUE LINE CENTURION FUND, INC.
By: /s/ Thomas J. Sexton
--------------------------
VALUE LINE, INC.
By: /s/ Illegible
--------------------------
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<PAGE>
Exhibit 99(e)
DISTRIBUTION AGREEMENT
Between
VALUE LINE CENTURION FUND, INC.
and
VALUE LINE SECURITIES, INC
November 15, 1983
VALUE LINE SECURITIES, INC.
711 Third Avenue
New York, New York 10017
Dear Sirs:
VALUE LINE CENTURION 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 principal
underwriter and distributor (herein "distributor") 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 it is,
accordingly, agreed between us as follows;
1. The Fund hereby appoints you distributor 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.
<PAGE>
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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.
3. The shares shall be sold by you at net asset value as determined in
the Fund's prospectus effective at the time of sale. 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 you 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 Registration Statement pursuant to the Securities
Act of 1933. 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.
<PAGE>
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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. You agree:
(a) That neither you nor any of your officers sill take any short
position in the shares of the Fund.
(b) To furnish to the Fund any pertinent information required to be
included with the respect to you as distributor within the meaning of the
Securities Act of 1933 in any reports or registration required to be filed
with any governmental 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.
8. 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.
9. This Agreement shall remain in effect until 1985, 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.
(c) We shall not have notified you in writing at least sixty days
prior to the termination date that we do not desire your continuation.
<PAGE>
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10. This Agreement may not be amended or changed except in writing and
shall be binding upon and shall enure to the benefit of the parties hereto
and their respective successors, but this Agreement shall not be assigned by
either party and shall automatically terminate upon assignment.
If the foregoing is in accordance with your undertaking, kindly so
indicate by signing in the space provided below.
VALUE LINE CENTURION FUND, INC.
By /s/ illegible
-------------------------------
Accepted:
VALUE LINE SECURITIES, INC.
By /s/ illegible
-------------------------
<PAGE>
Exhibit 99(g)
CUSTODIAN AGREEMENT
Dated as of:
Between
VALUE LINE CENTURION FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
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<S> <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>
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............................................. 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 21st day of June, 1990 between VALUE LINE
CENTURION 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 Persons 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
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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
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<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 preceeding
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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<PAGE>
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. CERTIFICATION 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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<PAGE>
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 it 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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<PAGE>
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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<PAGE>
(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 Sections 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 term, of this Agreement. Subject to
the
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<PAGE>
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 register 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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<PAGE>
(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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<PAGE>
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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<PAGE>
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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<PAGE>
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. OPTIONS 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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<PAGE>
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 the 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 the 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 if 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 receipt 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 purposes
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 (marked 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 in 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
-19-
<PAGE>
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
(1) 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
-20-
<PAGE>
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
-21-
<PAGE>
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.
-22-
<PAGE>
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.
-23-
<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 trust 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:
Value Line Centurion 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 alternation 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.
VALUE LINE CENTURION FUND, INC.
By: /s/ Illegible
-----------------------------------
ATTEST:
/s/ Illegible
- --------------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Illegible
-----------------------------------
ATTEST:
/s/ Illegible
- --------------------------------
-30-
<PAGE>
Exhibit (g)
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.
1
<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. Henigson
------------------------------
Name: David T. Henigson
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(h)
AGREEMENT
AGREEMENT made this 1st day of May, 1993 by and between VALUE LINE
CENTURION FUND, INC., a Maryland corporation, having its principal office and
place of business at 711 Third Avenue, New York, New York 10017 (the "Fund"),
and THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC., a Delaware insurance
company, having its principal office and place of business at 201 Park Avenue
South, New York, New York 10003 ("GIAC").
WHEREAS, the Fund is offered as an underlying investment option with
respect to certain variable contracts which are issued by GIAC; and
WHEREAS, GIAC performs certain administrative and shareholder services
and incurs certain expenses related thereto on behalf of the Fund; and
WHEREAS, GIAC and the Fund desire to establish an arrangement to
compensate GIAC for the performance of such administrative and shareholder
services and to reimburse GIAC for such expenses it incurs on behalf of the
Fund;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Subject to the terms and conditions set forth in this Agreement, the
Fund hereby employs and appoints GIAC, and GIAC accepts such appointment, to
perform certain services on behalf of GIAC variable contractowners who have
allocated premium amounts to the Fund and to incur expenses related thereto,
including but not limited to:
(a) performing administrative and internal accounting functions in
connection with the accounts established with respect to each GIAC variable
contractowner who has allocated premium amounts to the Fund and the ongoing
maintenance of such accounts, including but not limited to the allocation,
but not the declaration, of dividends and distributions to such accounts and
the processing of transfers made by contractowners into the out of the Fund;
(b) printing and distribution of annual and semi-annual shareholder
reports for the Fund and any other Fund reports and documents distributed
pursuant to the Investment Company Act of 1940 to all GIAC contractowners who
have allocated variable contract premiums to the Fund; and
(c) providing ongoing shareholder servicing functions to all GIAC
contractowners who have allocated variable contract premiums to the Fund,
including responsibility for responding to
<PAGE>
telephone and written shareholder inquiries, transactions and complaints.
Service costs shall not include marketing expenses.
2. As compensation for the services provided hereunder, the Fund shall
pay GIAC an amount equal to the sum of (i) all direct administrative and
shareholder servicing costs (which do not include marketing costs) incurred
by GIAC attributable to the Fund such as printing and postage, plus (ii) a
pro rata portion of the aggregate costs incurred by GIAC in performing
identical administrative and shareholder servicing functions for all the
investment options which underlie the variable contracts which GIAC issues
(the "Total Costs"). The subsection (ii) amount shall be calculated by
multiplying the Total Costs by a fraction, the numerator of which shall be
the total number of contractowner accounts for the Fund at the end of the
applicable quarter and the denominator of which shall be the total number of
contractowner accounts for all the investment options which underlie the
variable contracts issued by GIAC which offer the Fund as an investment
option at the end of such quarter. The payments will be made quarterly based
on the average number of contractowners each quarter, calculated by adding
the total number of contractowners at the beginning of the quarter and at the
end of the quarter and dividing by 2.
3. Beginning with the quarter ending June 30, 1993, within 12 business
days after the end of each calendar quarter, GIAC shall submit to the Fund an
invoice for the amount to be paid to GIAC pursuant to Section 2 hereof for
such quarter. GIAC shall include with each such invoice (i) a report
detailing the direct costs incurred by GIAC on behalf of the Fund during such
quarter and setting forth the calculation of the amount to be paid to GIAC in
accordance with Section 2(ii) above for such quarter and (ii) a certification
from a financial officer of GIAC that the invoice has been prepared in
accordance with the methodologies set forth in the Exhibits to the letter
addressed to the Board of the Fund from Price Waterhouse, dated December 16,
1992. As reasonably necessary to verify the accurateness of the submitted
invoice, GIAC hereby authorizes the officers, employees and agents of the
Fund, including outside auditors, to interview the appropriate financial
personnel of GIAC and to review the work papers and back-up materials
utilized by GIAC personnel to prepare the invoice under review. Expenses of
such review (including professional service fees incurred by GIAC at the
request of the Fund) shall be paid by the Fund except that the costs of
compensation of GIAC personnel or other professional service fees incurred by
GIAC shall be GIAC's responsibility. Subject to the next sentence, the Fund
agrees to pay to GIAC the amount invoiced within thirty calendar days of
receipt. The Fund shall not be obligated to make payment of, and GIAC will
promptly refund any previously-made payments of, invoiced amounts which the
Fund can demonstrate in writing, either prior to the time of its obligation
to pay or at the time of its request for a refund,
2
<PAGE>
to exceed the correct amounts due pursuant to this Agreement as a result of
mathematical miscalculations or an incorrect application of the agreed-upon
methodologies. The fee for the quarter ending June 30, 1993 shall be
pro-rated from the date of this Agreement to June 30, 1993.
4. The maximum aggregate annual amount of compensation paid by the Fund
to GIAC pursuant to this Agreement shall not exceed the multiple of: the
average number of contractowner accounts for the Fund for such year times
(a) in the calendar years 1993 and 1994, $18.00; and
(b) in the calendar years 1995 and thereafter, $18.00 plus a cumulative
annual increase of 4% per year.
The average number of contractowner accounts for the Fund for each calendar
year shall be calculated by adding the average number of contractowner
accounts for the Fund for each of the four quarters in such year (as
determined pursuant to Section 2 above) and dividing by 4.
5. The Fund acknowledges that it has reviewed the methodologies used by
GIAC in determining its costs associated with performing administrative and
shareholder servicing functions for the Fund and the other investment options
underlying the variable contracts issued by GIAC and agrees that GIAC shall
be entitled to continue to use such methodologies in calculating the amounts
to be invoiced to the Fund pursuant to Section 2(ii) hereof. GIAC agrees that
it will not change such methodologies without the prior written approval and
consent of the Fund.
6. This Agreement shall not be amended without the express written
consent of both parties hereto.
7. If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
8. This Agreement may be terminated by either party upon ninety days
written notice for the calendar years 1993 and 1994 and thereafter upon
thirty days written notice. All obligations incurred pursuant to this
Agreement prior to the date of termination shall survive the termination of
this Agreement.
9. This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New
York.
3
<PAGE>
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
as of the date first written above.
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
By: /s/ John M. Smith
-------------------------------------------
John M. Smith
Executive Vice President
VALUE LINE CENTURION FUND, INC.
By: /s/ Jean B. Buttner
-------------------------------------------
Jean B. Buttner
Chairman
4
<PAGE>
Exhibit 99(i)
PETER D. LOWENSTEIN
ATTORNEY AT LAW
TWO GREENWICH PLAZA, SUITE 100
GREENWICH, CONNECTICUT 06830
203 622-3932
FAX 203 622-0321
February 19, 1999
Value Line Centurion Fund, Inc.
220 East 42nd Street
New York, NY 10017
Gentlemen:
I have acted as special counsel to Value Line Centurion Fund, Inc., a
Maryland corporation (the "Fund"), in connection with certain matters,
including the issuance of shares of its common stock, $1.00 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. 16 to its Registration Statement on Form N-1A, File No. 2-86337 (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 State 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
<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. 16 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 9, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of Value Line Centurion 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> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 529,789
<INVESTMENTS-AT-VALUE> 818,175
<RECEIVABLES> 638
<ASSETS-OTHER> 59
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 818,872
<PAYABLE-FOR-SECURITIES> 2,351
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</TABLE>
