<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
THE VALUE LINE ADJUSTABLE RATE
U.S. GOVERNMENT SECURITIES FUND, INC.
220 EAST 42ND STREET
NEW YORK, NY 10017
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER , 1995
------------------------
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of The Value Line Adjustable Rate U.S. Government Securities Fund,
Inc. (the "Fund"), a Maryland corporation, will be held at the Office of the
Fund, 220 East 42nd Street, 6th Floor, New York, New York on October , 1995 at
10:00 a.m. for the following purposes:
1. To approve or disapprove a change in the Fund's Fundamental Investment
Policy.
2. To approve or disapprove the adoption of a Service and Distribution
Plan.
3. To elect directors of the Fund to serve until their successors are duly
elected and qualified.
4. To transact such other business which may properly come before the
Meeting or any adjournment or adjournments thereof.
Only Shareholders of record at the close of business on September , 1995
are entitled to receive notice of and to vote at the Meeting or any adjournment
thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND IN PERSON ARE URGED TO SIGN AND RETURN WITHOUT DELAY THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE, SO THAT
THEIR SHARES MAY BE REPRESENTED AT THIS MEETING.
By order of the President
David T. Henigson
Secretary
September , 1995
<PAGE>
THE VALUE LINE ADJUSTABLE RATE
U.S. GOVERNMENT SECURITIES FUND, INC.
220 EAST 42ND STREET
NEW YORK, NY 10017
(212) 907-1500
(800) 223-0818
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation of proxies
by the management of The Value Line Adjustable Rate U.S. Government Securities
Fund, Inc. (the "Fund") to be used at a Special Meeting of Shareholders of the
Fund to be held on October , 1995, and at any subsequent time which may be
made necessary by the adjournment thereof. Shareholders who execute proxies
retain the right to revoke them at any time insofar as they have not been
exercised, and any shareholder attending the meeting may vote in person whether
or not he has previously filed a proxy. A proxy may be revoked by the subsequent
execution and submission of a revised proxy, by written notice of revocation to
the Secretary of the Fund, or by voting in person at the meeting. The
approximate mailing date of this Notice of Meeting and Proxy Statement is
September , 1995. THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE ANNUAL
REPORT AND THE MOST RECENT SEMI-ANNUAL REPORT TO A SHAREHOLDER UPON REQUEST TO
THE FUND AT THE ADDRESS OR TELEPHONE NUMBERS ABOVE.
As of the close of business on September , 1995 there were shares
of Common Stock of the Fund outstanding. Each full share is entitled to one
vote; fractional shares are entitled to a proportionate fractional vote. At
September , 1995, Value Line, Inc. (the "Adviser") and its parent, Arnold
Bernhard & Co., Inc., owned shares of the Fund's Common Stock
representing % of the outstanding shares.
APPROVAL OR DISAPPROVAL OF A CHANGE IN
THE FUND'S FUNDAMENTAL INVESTMENT POLICY
(PROPOSAL NO. 1)
The investment objective of the Fund is high current income consistent with
low volatility of principal. The Fund currently seeks to achieve its objective
by investing at least 65% of its assets in adjustable rate securities that are
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, principally mortgage backed and asset backed securities. The
Fund's policy of
1
<PAGE>
investing at least 65% of its assets in this manner is considered to be
fundamental, which means that it may not be changed without the approval of a
majority of the Fund's outstanding Shares (as defined in the Investment Company
Act of 1940 (the "1940 Act")).
At a meeting of the Board of Directors on September 21, 1995, the Board of
Directors considered a recommendation of the Investment Adviser that the Fund
change this investment policy to a policy of investing at least 65% of its
assets, under normal circumstances, in a diversified portfolio of debt
securities with a dollar-weighted average portfolio maturity of between three
and ten years. The recommendation of the Adviser to change the investment policy
of the Fund, as described above, was approved, subject to shareholder approval,
by all of the Directors, including all of the directors who are not "interested
persons" of the Fund (as defined in the 1940 Act).
The Board of Directors recommends that the shareholders of the Fund approve
this change in the Fund's investment policy. Such approval will require the
affirmative vote of a majority of the outstanding shares of the Fund which, as
defined by the 1940 Act, means the vote of (1) 67% or more of the shares present
at the meeting if the holders of more than 50% of the outstanding shares are
present or represented by proxy; or (2) more than 50% of the outstanding shares
of the Fund, whichever is less. If approved by the Shareholders, the proposed
change will be implemented upon the completion of regulatory filings which is
expected to be during the fourth quarter of 1995.
If the proposed change in policy is adopted, the Fund's investment objective
of seeking high current income consistent with low volatility of principal would
remain unchanged. However, in pursuing that investment objective, the Fund would
no longer be restricted to investing primarily in adjustable rate securities
that are issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities. Rather, the Fund would be able to invest in a diversified
portfolio of intermediate-term corporate debt securities issued by a wide range
of issuers. An "intermediate-term corporate debt security" is one maturing in
between three to ten years. As an operating policy, which could be changed by
the Board of Directors without Shareholder approval, the Fund would invest
primarily in investment-grade debt securities -- those rated within one of the
four highest grades assigned by Standard & Poor's Division of The McGraw-Hill
Companies, Inc. ("S&P") or Moody's Investors Service, Inc. ("Moody's") or if
unrated, judged by the Adviser to be of comparable quality. In addition, the
Fund would invest (as it currently invests) in bank obligations and commercial
paper rated P-1 by Moody's or A-1 by S&P. Under the proposed new policy, the
Fund would continue to be able to invest in adjustable rate securities that are
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities. However, it would not be required to invest at least 65% of
its assets in such securities, as it is under the current policy. Amending this
investment policy as proposed would give the Fund greater flexibility in
pursuing its investment objective and would reduce the exposure of the Fund and
its shareholders to the volatility associated with mortgage-backed securities.
In addition, the Adviser believes that in light of the current market
environment, which reflects the declining interest of investors in adjustable
rate funds, this investment policy should be changed as described above. In this
regard, it advised the Board of Directors that, under the current investment
policies, the Fund has not attracted a sufficient level of assets under
management in order to realize
2
<PAGE>
economies of scale, and that current shareholders have been disadvantaged by the
high expense ratio associated with the Fund's small asset level. Moreover, if
the proposed change is adopted, the Fund's exposure to the market volatility
associated with mortgage-backed securities could be reduced.
If this Proposal is approved by Shareholders, the new investment policy
would be deemed fundamental and could not be changed without the approval of a
majority of the outstanding voting shares of the Fund. In addition, if this
proposal is approved by Shareholders, the Fund's name will be changed to the
"Value Line Intermediate Bond Fund, Inc."
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
CHANGE IN THE FUND'S INVESTMENT POLICY, AS SET FORTH ABOVE.
APPROVAL OR DISAPPROVAL OF A
SERVICE AND DISTRIBUTION PLAN
(PROPOSAL NO. 2)
At a meeting of the Board of Directors called for the purpose on September
21, 1995, the Board of Directors considered adoption of a Service and
Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act as more
fully described below. Rule 12b-1 regulates the circumstances under which an
investment company may, directly or indirectly, bear the expenses of
distributing its shares. The Plan was approved by all of the Directors voting in
person, including all of the Directors who are not "interested persons" of the
Fund (as defined in the 1940 Act) and have no direct or indirect financial
interest in the Plan or in any agreements related thereto (the "Independent
Directors").
The Board of Directors recommends that the shareholders of the Fund approve
the Plan, a copy of which is attached to this Proxy Statement as Exhibit A.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of the Fund which, as defined by the 1940 Act, means the vote
of (1) 67% or more of the shares present at the meeting if the holders of more
than 50% of the outstanding shares are present or represented by proxy; or (2)
more than 50% of the outstanding shares of the Fund, whichever is less.
If the Plan is approved by the Shareholders, it is contemplated that it will
come into effect on October , 1995 and remain in effect until October , 1996
and may be continued annually thereafter, provided that such continuance is
specifically approved by the Fund's Board of Directors, including a majority of
the Independent Directors, pursuant to a vote cast in person at a meeting called
for that purpose.
The Plan provides for the payment by the Fund of certain expenses incurred
by Value Line Securities, Inc., the Fund's distributor and a subsidiary of the
Adviser (the "Distributor"), in advertising, marketing and distributing the
Fund's shares and for servicing the Fund's Shareholders at the annual rate of
0.25% of the Fund's average daily net assets. Under the Plan, the Distributor
may make payments to securities dealers, banks, financial institutions and other
organizations which render distribution and administrative services with respect
to the distribution of the Fund's shares. Such services may include, among other
things, answering investor inquiries regarding the Fund; processing
3
<PAGE>
new shareholder account applications and redemption transactions; responding to
shareholder inquiries; and such other services as the Fund may request to the
extent permitted by applicable statute, rule or regulation. The Plan also
provides that the Adviser may make such payments out of its advisory fee, its
past profits or any other source available to it. The fees payable to the
Distributor under the Plan are payable without regard to actual expenses
incurred.
The Plan provides that the Board of Directors shall be provided, at least
quarterly, with a written report of all amounts expended pursuant to the Plan
and the purposes for which such amounts were expended. The Plan also provides
that it may not be amended to increase materially the costs which the Fund may
bear pursuant to the Plan without shareholder approval by a vote of a majority
of the outstanding voting securities of the Fund (as defined in the 1940 Act)
and that any material amendments to the Plan must be approved by the Directors,
including a majority of the Independent Directors, by vote cast in person at a
meeting called for that purpose.
The Plan is terminable without penalty, at any time, by a vote of a majority
of the Directors, including a majority of the Independent Directors or by a vote
of a majority of the outstanding voting securities of the Fund (as defined in
the 1940 Act).
FACTORS CONSIDERED BY THE BOARD OF DIRECTORS
The Adviser and the Distributor proposed to the Board of Directors that the
Fund adopt the Plan pursuant to Rule 12b-1 under the Act. The Distributor has
acted as distributor for the Fund since the Fund's inception under a contract
with the Fund pursuant to which the Distributor currently does not receive
compensation.
In considering the Plan, the Board of Directors took into account the
utility of advertising, marketing and distribution efforts to be undertaken by
the Distributor in attracting investors. In addition, the Distributor advised
the Board of Directors that the possibility of payments of service fees to
securities dealers and other financial institutions will permit the Fund to
compensate these entities who, in return, provide shareholder servicing,
including assisting Fund shareholders in considering and understanding their
investment in the Fund. The Directors believe that there is a reasonable
likelihood that all of these activities are likely to stimulate additional sales
of the Fund's shares and assist the Fund in increasing its present asset base in
the face of competition from a variety of financial products. Such competition,
absent an effective and attractive distribution program, could adversely affect
the Fund by making it increasingly difficult to attract new investors and to
maintain existing investors.
The Board of Directors also considered the reasons why it is important for
the Fund's assets to grow. It was recognized that it is desirable for all
shareholders that the Fund sustain a flow of new investment monies, primarily to
offset the effects of redemptions. The Board of Directors evaluated the
potentially adverse effects that might result from a continued pattern of net
redemptions and the possibility of a net cash outflow resulting therefrom. Net
cash outflow would increase the likelihood of having to dispose of portfolio
securities for other than investment purposes while net cash inflow minimizes
the need to sell securities to meet redemptions when investment considerations
would indicate that they continue to be held, reduces daily liquidity
requirements and permits a prompt
4
<PAGE>
restructuring of a portfolio without the need to dispose of present holdings. It
was also recognized that payments made pursuant to the Plan might be offset in
part by economies of scale associated with the growth of the Fund's assets. (The
Board of Directors is also seeking to address this issue by proposing to change
one of the Fund's fundamental investment policies. See the material under
Proposal No. 1.)
The Directors believe that the fee payable under the Plan is reasonable in
view of the distribution, administration and promotion services to be provided.
The Directors, in voting to approve the Plan, determined that there is a
reasonable likelihood that the Plan will benefit the Fund by helping to attract
new shareholders to the Fund in order to expand its size and thereby achieve
greater economies of scale. In this regard, the Directors concluded that
adoption of the Plan was necessary to enable the Fund to remain competitive with
similar funds that seek to reach investors through advertising and marketing
efforts and through offering financial incentives to institutions that direct
investors to such funds and provide shareholder servicing and administrative
services for the benefit of their customers who are shareholders of such funds.
The Directors believe that the payments made pursuant to the Plan will
facilitate the sale of the Fund's shares and benefit the Fund and its
shareholders. The operating expenses of the Fund will be increased under the
Plan by 0.25 of 1%, on an annual basis, of the Fund's average daily net assets
(and the Fund's net yield to shareholders will correspondingly be decreased by
0.25 of 1%).
5
<PAGE>
If the Plan were adopted, the expenses of the Fund would be affected as
indicated in the following table:
<TABLE>
<CAPTION>
EXPENSES
ADJUSTED AS IF
12B-1 PLAN WERE
ACTUAL EXPENSES* IN EFFECT*
----------------- ---------------
<S> <C> <C>
Plan Shareholder Transaction Expenses
Sales Load on Purchases....................................................... None None
Sales Load on Reinvested Dividends............................................ None None
Deferred Sales Load........................................................... None None
Redemption Fees............................................................... None None
Exchange Fee.................................................................. None None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees............................................................... 0.50 % 0.50 %
12b-1 Fees.................................................................... None 0.25 %
Other Expenses................................................................ 0.48 % 0.48 %
Total Fund Operating Expenses................................................. 0.98 % 1.23 %
Example
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each period shown............ $ 10 $ 31 $ 54 $ 120
As adjusted assuming payment of a 12b-1 fee.................................. $ 13 $ 39 $ 68 $ 149
<FN>
------------------------
* The information set forth under "Annual Fund Operating Expenses" and in the
Example is based on actual expenses for the year ended October 31, 1994, and
as adjusted as if the proposed Plan were in effect. Actual expenses in the
future may be greater or less than those shown.
</TABLE>
A significant effect of the Plan is that it will enable the Distributor to
make payments to participating broker-dealers, thereby enabling and encouraging
them to recommend the Fund's shares to their customers and, thereafter, to
assist the Fund in providing high-quality shareholder services to their
customers who have purchased shares of the Fund.
The Fund's Directors believe that shareholders are benefited when the Fund's
assets are relatively stable to increasing. In considering the Plan, the
Directors took into account the possible benefits of the Plan to the Adviser,
including increased advisory fees payable by the Fund if its net assets
increase. The Directors also noted that certain funds having investment
objectives similar to that of the Fund have adopted distribution plans which
appear to contemplate payments to broker-dealers or other persons at levels
which the Adviser indicated to the Directors it is not in a position to finance
from its own resources.
6
<PAGE>
The Directors believe that were the Plan not to be approved, the Fund would
not be able to attract and retain the support of financial intermediaries and,
as a result of the consequent erosion in the Fund's asset base, the Fund would
be burdened with greater relative costs and possibly might not be capable of the
same investment flexibility as would a larger fund. It is the belief of the
Directors that adoption of the Plan will enable the Fund to maintain and
possibly enhance the Fund's performance for its shareholders and the quality of
its shareholder services.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
PROPOSED SERVICE AND DISTRIBUTION PLAN.
7
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 3)
Four directors are to be elected to office until their successors are
elected and qualify. The persons named in the accompanying proxy intend to vote
such proxy for the election of the persons named below, all of whom have
consented to serve. If any nominee shall become unavailable for reasons
presently unknown, the proxy will be voted for a substitute nominee or nominees
designated by management and for the remaining nominees so listed. Election of
Directors requires the affirmative vote of a majority of the shares represented
at the meeting.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED AS OF
SEPTEMBER ,
NAME PRINCIPAL OCCUPATION 1995
------------------------------ ------------------------------------------------------------------ -------------
<S> <C> <C>
* Jean Bernhard Buttner Chairman of the Board, Chief Executive Officer of the Adviser, **
Age 60 Value Line Publishing, Inc. and Arnold Bernhard & Co., Inc.
Francis C. Oakley Professor of History, Williams College, 1961 to present and --
936 Main Street President Emeritus since 1994; President of Williams College,
Williamstown, MA 01267 1985-1993; Director, Berkshire Life Insurance Company.
Age 63
Marion N. Ruth Real Estate Executive; President, Ruth Realty (real estate --
5 Outrider Road broker).
Rolling Hills, CA 90274
Age 60
Frances T. Newton Computer Programming Professional, Duke Power Company. --
4921 Buckingham Drive
Charlotte, NC 28209
Age 54
<FN>
------------------------
* "Interested person" as defined in the Investment Company Act of 1940 (the
"Company Act").
** These shares are owned by the Adviser and by Arnold Bernhard & Co., Inc.
("AB&Co."). AB&Co. owns approximately 81% of the outstanding shares of the
Adviser's common stock. Jean Bernhard Buttner owns a majority of the voting
stock of AB&Co.
</TABLE>
Jean B. Buttner has been a director of the Fund since its organization and
is a director or trustee of the 14 other Value Line Funds; each of the other
nominees is a director or trustee of 2 other Value Line funds; Mr. Oakley and
Mrs. Ruth were elected directors of the Fund on September 21, 1995, by the then
Board of Directors.
During the fiscal year ended October 31, 1994, there were four meetings of
the Board of Directors and two meetings of the Audit Committee. All Directors
attended all meetings of the Board and those
8
<PAGE>
committees of which they were members during 1994. The Fund has an Audit
Committee composed of all members of the Board. The duties of this committee
include meeting annually with the Fund's independent public accountants both to
review the range of their activities and to discuss the Fund's system of
internal accounting controls. Thereafter, this Committee reports to the Board
its findings and recommendations concerning internal accounting matters. The
Fund does not have a compensation committee; its Independent Directors
constitute the nominating committee.
The following table sets forth information regarding compensation of
Directors by the Fund and by the Fund and the twelve other Value Line Funds of
which each of the Directors was a director or trustee for the fiscal year ended
October 31, 1994. Directors who are officers or employees of the Adviser do not
receive any compensation from the Fund or any of the Value Line funds.
COMPENSATION TABLE
FISCAL YEAR ENDED 10/31/94
<TABLE>
<CAPTION>
TOTAL
PENSION OR ESTIMATED COMPENSATION
RETIREMENT ANNUAL FROM FUND
AGGREGATE BENEFITS BENEFITS AND FUND
COMPENSATION ACCRUED AS PART UPON COMPLEX
NAME OF PERSON FROM FUND OF FUND EXPENSES RETIREMENT (13 FUNDS)
----------------------- ------------- ------------------- ------------- -------------
<S> <C> <C> <C> <C>
Jean B. Buttner $ -0- N/A N/A $ -0-
John Chandler* 2,740 N/A N/A 35,620
Leo R. Futia* 2,740 N/A N/A 35,620
Charles E. Reed* 2,740 N/A N/A 35,620
Paul Craig Roberts* 2,740 N/A N/A 35,620
<FN>
------------------------
* Resigned as a Director on September 21, 1995.
</TABLE>
The officers of the Fund are as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME POSITION DURING PAST 5 YEARS
-------------------------- ----------------- -------------------------------------------------------------------
<S> <C> <C>
Jean Bernhard Buttner President Chairman of the Board, President and Chief Executive Officer of the
Age 60 Adviser, Value Line Publishing, Inc. and Arnold Bernhard & Co.,
Inc.
David T. Henigson Vice President, Compliance Officer and since 1992, Vice President and a Director of
Age 38 Secretary and the Adviser.
Treasurer
Charles Heebner Vice President Director of Fixed Income with the Adviser since 1989.
Age 59
John Risner Vice President Portfolio Manager with the Adviser since 1992; Assistant Vice
Age 35 President, Bankers Trust Company, 1987-1992.
</TABLE>
9
<PAGE>
NEXT MEETING OF SHAREHOLDERS
The Fund is not required and does not intend to hold annual or other
periodic meetings of shareholders except as required by the Investment Company
Act of 1940. The next meeting of the shareholders of the Fund will be held at
such time as the Board of Directors may determine or at such time as may be
legally required. Any shareholder proposal intended to be presented at such
meeting must be received by the Fund at its office a reasonable time prior to
the meeting, as determined by the Board of Directors, to be included in the
Fund's proxy statement and form of proxy relating to such meeting, and must
satisfy all other legal requirements.
SOLICITATION OF PROXIES
The cost of solicitation, including the cost of printing, assembling and
mailing the proxy material, will be borne by the Adviser.
10
<PAGE>
EXHIBIT A
VALUE LINE INTERMEDIATE BOND FUND, INC.
SERVICE AND DISTRIBUTION PLAN (THE "PLAN")
The Plan is adopted as of this 21st day of September, 1995, by the Board of
Directors of Value Line Intermediate Bond Fund, Inc., a Maryland corporation
(the "Fund").
1. The Plan is adopted pursuant to Rule 12b-1 under the Investment Company
Act of 1940 (the "Act") so as to allow the Fund to make payments as contemplated
herein, in conjunction with the distribution of shares of Common Stock of the
Fund ("Shares"). Payments also may be made by Value Line, Inc., the Fund's
investment adviser, out of its fees, its past profits or any other source
available to it.
2. The Plan is designed to finance activities of Value Line Securities,
Inc. ("VLS") principally intended to result in sale of the Shares and to include
the following: (a) to provide incentive to securities dealers to sell Shares and
to provide administrative support services to the Fund and its shareholders; (b)
to compensate other participating financial institutions and organizations
(including individuals) for providing administrative support services to the
Fund and its shareholders; (c) to pay for costs incurred in conjunction with
advertising and marketing of Shares including expenses of preparing, printing
and distributing prospectuses and sales literature to prospective shareholders,
securities dealers and others, and for servicing the accounts of shareholders
and (d) other costs incurred in the implementation and operation of the Plan.
3. As compensation for the services to be provided under this Plan, VLS
shall be paid a fee at the annual rate of 0.25% of the Fund's average daily net
assets.
4. All payments to securities dealers, participating financial institutions
and other organizations shall be made pursuant to the terms of a Distribution
Agreement between VLS and such dealer, institution or organization.
5. The Board of Directors shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to the Plan and the purpose for
which the amounts were expended.
6. The Plan will become effective immediately upon approval by (a) a
majority of the outstanding shares of Common Stock of the Fund and (b) a
majority of the Board of Directors who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreements entered into in connection with the
Plan, pursuant to a vote cast in person at a meeting called for the purpose of
voting on the approval of the Plan.
7. The Plan shall continue for a period of one year from its effective
date, unless earlier terminated in accordance with its terms, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is approved at least annually in the manner provided by the Act.
8. The Plan may be amended at any time by the Board of Directors provided
that (a) any amendment to increase materially the costs which the Fund may bear
pursuant to the Plan shall be
<PAGE>
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Fund and (b) any material amendments of the terms of the Plan
shall become effective only upon approval as provided in paragraph 6 (b) hereof.
9. The Plan is terminable without penalty at any time by (a) vote of a
majority of the Board of Directors of the Fund, including a majority of the
Directors who are not "interested persons" (as defined in the Act) of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements entered into in connection with the Plan, or (b) vote of a
majority of the outstanding voting securities on the Fund.
10. While the Plan is in effect, the selection and nomination of Directors
who are not "interested persons" (as defined in the Act) of the Fund shall be
committed to the discretion of the Directors who are not "interested persons."
11. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period not less than
six years from the date thereof, the first two years in an easily accessible
place.
<PAGE>
THE VL ADJ RATE US GOVT SEC FD INC.
PO BOX 419729
KANSAS CITY MO 64141-6729
JOHN HORATIO DOE TAX I.D. OR SOC. SEC. NO. 99-9999999
AND JANE DORENE DOE ACCOUNT NO. 99999999999
ANYBODY'S CORPORATION FUND NO. 0000014
999 W 99TH ST RECORD DATE SHARES 99999999999.9999
PO BOX 99999
KANSAS CITY MO 64999-9999
--------------------------------------------------------------------------------
THE VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints David T. Henigson and Howard A. Brecher or
either of them, proxies of the undersigned with the power of substitution to
act for and to vote all shares of the stock of the undersigned at the Special
Meeting of Stockholders of The Value Line Adjustable Rate U.S. Government
Securities Fund, Inc. at the office of the Fund, 200 East 42nd Street, 5th
Floor, New York, New York on October , 1995 at 10:00 a.m. and at any and all
adjournments thereof.
PROPOSAL(S)
1) A CHANGE IN THE FUND'S FUNDAMENTAL INVESTMENT POLICY.
2) ADOPTION OF A SERVICE AND DISTRIBUTION PLAN.
3) ELECTION OF DIRECTORS.
4) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDER SIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 AND FOR THE ELECTION OF ALL NOMINEES. IF YOU CANNOT
BE PRESENT, PLEASE SIGN AND RETURN THIS BALLOT PROMPTLY IN THE ENCLOSED
ENVELOPE.
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PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
Place the ballot so that the return address, located on the reverse side of
the mail-in-stub, appears through the window of the envelope.
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<S> <C>
THE VL ADJ RATE US GOVT SEC FD INC. PROXY VOTING MAIL-IN-STUB
RECORD DATE SHARES 99999999999 9999
Please sign exactly as your name appears below. PROPOSAL(S)
When shares are held by joint tenants, both
should sign, when signing as an attorney, as 1) // FOR // AGAINST // ABSTAIN
executor, administrator, trustee or guardian,
please give full title as such. If a 2) // FOR // AGAINST // ABSTAIN
corporation, please sign in full corporate name
by President or other authorized officer, if a 3) ELECTION OF DIRECTORS (INSTRUCTION: To withhold authority
partnership, please sign in partnership name by to vote for any individual nominee strike a line through the
authorized person. nominees name in the list below.)
JOHN HORATIO DOE // FOR all nominees listed below // Vote withheld for all nominees
AND JANE DORENE DOE listed below
ANYBODY'S CORPORATION // FOR all nominees listed below (except as marked to
999 W 99TH ST the contrary below)
P O BOX 99999
KANSAS CITY MO 64999-9999 J.B. BUTTNER F.C. OAKLEY M.N. RUTH F.T. NEWTON
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Dated: ____________________________, 19__
_________________________________________
_________________________________________
Signature(s) of Stockholder(s)
