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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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
VALUE LINE INTERMEDIATE BOND FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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VALUE LINE INTERMEDIATE BOND FUND, INC.
220 EAST 42ND STREET
NEW YORK, NY 10017
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 3, 1997
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Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of Value Line Intermediate Bond 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 September 3, 1997 at 10:00 a.m. for the following
purposes:
1. To consider and act upon the proposed liquidation and dissolution of the
Fund.
2. To transact such other business which may properly come before the
Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on August 13, 1997 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
August 15, 1997
VLF509180
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VALUE LINE INTERMEDIATE BOND FUND, INC.
220 EAST 42ND STREET
NEW YORK, NY 10017
(212) 907-1500
(800) 223-0818
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of proxies
by the management of Value Line Intermediate Bond Fund, Inc. (the "Fund") to be
used at a Special Meeting of Shareholders of the Fund to be held on September 3,
1997, 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 August 15, 1997. THE FUND WILL FURNISH, WITHOUT
CHARGE, A COPY OF ITS ANNUAL REPORT AND ITS 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 August 13, 1997 there were 1,763,686 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
August 13, 1997, Value Line, Inc. (the "Adviser"), owned 1,129,389 shares of the
Fund's Common Stock representing 64% of the outstanding shares.
The favorable vote of the holders of a majority of the issued and
outstanding shares of the Fund entitled to vote at the meeting is required for
approval of the liquidation of the assets and dissolution of the Fund. (Proposal
No. 1).
PROPOSAL TO LIQUIDATE THE ASSETS
AND DISSOLVE THE FUND
(PROPOSAL NO. 1)
THE LIQUIDATION IN GENERAL
The Fund proposes to liquidate the assets and dissolve the Fund pursuant to
the provisions of a Plan of Liquidation and Dissolution (the "Plan") as approved
by the Fund's Board of Directors on July 29, 1997. The Plan provides for the
complete liquidation of all of the assets of the Fund. If the Plan is approved,
the Adviser will undertake to liquidate the Fund's assets at market prices and
on
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such terms and conditions as the Adviser shall determine to be reasonable and in
the best interests of the Fund and its shareholders. In no event will any of the
securities owned by the Fund be sold at a price which is less than the best
price available in the public market on the date of sale.
At the meeting of the Directors held on July 29, 1997, the Directors
determined that an orderly liquidation of the Fund's assets was in the best
interest of the shareholders.
REASONS FOR THE LIQUIDATION
The Fund commenced operations on April 10, 1992 as The Value Line Adjustable
Rate U.S. Government Securities Fund, Inc. On November 1, 1995, it changed its
name to Value Line Intermediate Bond Fund, Inc. As of April 30, 1997, the Fund's
net assets were approximately $14.8 million of which Value Line, Inc. (the
"Adviser") owned approximately 64% or $9.4 million. The Directors determined at
a meeting held on July 29, 1997 that the liquidation and termination of the Fund
was the appropriate course of action. After a discussion of all available
options, the Directors, including all of the Directors who are not "interested
persons" of the Fund (as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act")), unanimously adopted a resolution declaring
the proposed liquidation and dissolution advisable and directed that it be
submitted to the shareholders for consideration. Several factors, including
those described below, influenced the Directors' determination that the Fund be
liquidated and terminated. It is the intention of the Adviser to vote its shares
in favor of the liquidation.
Prior to their July 29, 1997 meeting, the Directors had been advised by the
Adviser that over the long term, the continued operation of the Fund at its size
was not economically feasible for the Adviser or the shareholders. At the July
29, 1997 board meeting, the Adviser stated that it had reviewed the following
possible alternatives for the Fund: (1) continuation of the Fund with increased
marketing; (2) gradual liquidation of the Fund; and (3) a prompt liquidation of
the Fund. The Adviser reported to the Directors that it had considered the
viability of each alternative and had concluded that a prompt liquidation of the
Fund was the only viable alternative consistent with the best interests of the
shareholders of the Fund. See "Federal Income Tax Consequences" below. The
Adviser was not confident that further marketing efforts would increase the
Fund's size sufficiently.
At the July 29, 1997 meeting of the Board of Directors, the Adviser
requested that the Board of Directors consider the liquidation of the Fund
pursuant to the Plan attached to this Proxy Statement as Exhibit A. Based upon
the Adviser's presentation and recommendation, the Board of Directors concluded
that a liquidation of the Fund was in the best interests of the Fund and its
shareholders.
The liquidation of the assets and termination of the Fund will have the
effect of permitting the Fund's shareholders to invest the distributions to be
received by them upon the Fund's liquidation in investment vehicles of their own
choice. Prospectuses for the other Value Line Funds may be obtained by calling
(800) 223-0818.
PLAN OF LIQUIDATION AND DISSOLUTION OF THE FUND
The Plan provides for the complete liquidation of all of the assets of the
Fund. If the Plan is approved, the Adviser will undertake to liquidate the
Fund's assets at market prices and on such
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terms and conditions as the Adviser shall determine to be reasonable and in the
best interests of the Fund and its shareholders. In no event will any of the
portfolio securities owned by the Fund be sold at a price which is less than the
best price available in the public market on the date of sale.
LIQUIDATION VALUE
If the Plan is adopted by the Fund's shareholders at the Meeting, as soon as
practicable after the consummation of the sale of all of the Fund's portfolio
securities and the payment of all the Fund's known liabilities and obligations,
the Fund's shareholders will receive a distribution in an amount equal to the
net asset value per share, as determined in accordance with the Fund's current
registration statement together with accrued and unpaid dividends with respect
to each of their shares of the Fund (the "Liquidation Distribution").
FEDERAL INCOME TAX CONSEQUENCES
The following summary provides general information with regard to the
federal income tax consequences to shareholders on receipt of the Liquidation
Distribution from the Fund pursuant to the provisions of the Plan. This summary
also discusses the effect of federal income tax provisions of the Fund resulting
from its liquidation and dissolution; however, the Fund has not sought a ruling
from the Internal Revenue Service (the "Service") with respect to the
liquidation of the Fund. This summary is based on the tax laws and regulations
in effect on the date of this proxy statement, all of which are subject to
change by legislative or administrative action, possibly with retroactive
effect.
This summary of the federal income tax consequences is generally applicable
to shareholders who are individual United States citizens (other than dealers in
securities) and does not address the particular federal income tax consequences
which may apply to other shareholders, such as corporations, trusts, estates,
tax exempt organizations or non-resident aliens. This summary does not address
state or local tax consequences. The tax consequences discussed herein may
affect shareholders differently depending upon their particular tax situations
unrelated to the Liquidation Distribution, and accordingly, this summary is not
a substitute for careful tax planning on an individual basis. SHAREHOLDERS MAY
WISH TO CONSULT THEIR PERSONAL TAX ADVISERS CONCERNING THEIR PARTICULAR TAX
SITUATIONS AND THE IMPACT THEREON OF RECEIVING THE LIQUIDATION DISTRIBUTION AS
DISCUSSED HEREIN.
As discussed above, pursuant to the Plan, the Fund will sell its assets and
distribute the proceeds to its shareholders. The Fund anticipates that it will
retain its qualification as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"), during the liquidation period and
, therefore, will not be taxed on any of its net income from the sale of its
assets.
For federal income tax purposes, a shareholder's receipt of the Liquidation
Distribution will be a taxable event in which the shareholder will be viewed as
having sold his or her shares of the Fund in exchange for an amount equal to the
Liquidation Distribution that the or she receives. Each shareholder will
recognize gain or loss measured by the difference between the adjusted tax basis
in the shares and the aggregate Liquidation Distribution received from the Fund.
Assuming the shares are held as a capital asset, the gain or loss will be
characterized as a capital gain or loss. A capital gain or loss attributable to
shares held for more than one year will constitute a long-term capital gain or
loss,
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while a capital gain or loss attributable to shares held for not more than one
year will constitute a short-term capital gain or loss. In addition, before
liquidating, the Fund may make one or more ordinary dividend distributions.
The receipt of a Liquidation Distribution by an Individual Retirement
Account Plan ("IRA") which holds shares would generally not be viewed as a
taxable event to the beneficiary; however, some IRAs which hold shares may have
been established with custodians who do not possess the power to reinvest the
Liquidation Distribution, but instead must immediately distribute such amounts
to the IRA beneficiary. In this situation, the amount received by the
beneficiary will constitute a taxable distribution; and if the beneficiary has
not attained 59- 1/2 years of age, such distribution will generally constitute a
premature distribution subject to a 10% penalty tax. This penalty tax in in
addition to the beneficiary's regular income tax. Beneficiaries who receive a
distribution from their IRAs on account of the liquidation may be able to avoid
the above-described taxes and characterize the receipt of the Liquidation
Distribution as a tax-free distribution if, within 60 days of receipt of the
Liquidation Distribution, it is "rolled over" into a new IRA or into an
otherwise eligible retirement plan and the shareholder has not engaged in a
rollover from this IRA to another IRA or otherwise eligible retirement plan
during the one year period ending on the day of receipt of the Liquidation
Distribution. Such a rollover will not generate a deduction for the current
year. Unless the IRA beneficiary elects to have his or her Liquidation
Distribution paid directly to an eligible retirement plan, such distribution
will be subject to mandatory withholding of 20% on qualified retirement plan
distributions that are eligible for rollover but are not directly transferred
from the distributing plan to an eligible transferee plan. IRA shareholders who
do not wish to roll over their Liquidation Distribution, or how have rolled over
their IRAs during the one-year period ending on the day of receipt of the
distribution, may contact the Fund's custodian to make other arrangements for
the transfer of their IRAs. Tax results will vary depending upon the status of
each beneficiary, and therefore beneficiaries who receive distributions from an
IRA on account of the liquidation of the Fund must consult with their own tax
advisers regarding their personal tax results in this matter.
The foregoing summary sets forth general information regarding the
anticipated federal income tax consequences to the Fund and to individual
shareholders who are United States citizens of the liquidation of the Fund, as
previously discussed. No tax ruling has been or will be requested from the
Service regarding the payment or receipt of a Liquidation Distribution. The
statements above are, therefore, not binding on the Service, and there can be no
assurance that the Service will concur with this summary or that the tax
consequences to any shareholder upon receipt of a Liquidation Distribution will
be as set forth above. EACH SHAREHOLDER SHOULD SEEK INDEPENDENT COUNSEL
REGARDING THE POSSIBLE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES TO SUCH
SHAREHOLDER OF RECEIVING A LIQUIDATION DISTRIBUTION.
LIQUIDATION DISTRIBUTIONS
At present, the date or dates on which the Fund will pay Liquidation
Distributions to its shareholders and on which the Fund will be liquidated are
not known to the Fund, but it is anticipated that if the Plan is adopted by the
shareholders such liquidation would occur on or prior to September 30, 1997.
Shareholders will receive their Liquidation Distribution without any further
action on their part.
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The right of a shareholder to redeem his or her shares of the Fund at any
time has not been impaired by the adoption of the Plan. Therefore, a shareholder
may redeem shares in accordance with the redemption procedures set forth in the
Fund's current prospectus without the necessity of waiting for the Fund to take
any action. The Fund does not impose any redemption charges.
CONCLUSION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSED LIQUIDATION OF ASSETS AND DISSOLUTION OF THE FUND PURSUANT TO THE
PROVISIONS OF THE PLAN OF LIQUIDATION AND DISSOLUTION.
OTHER MATTERS
The Directors do not know of any matters to be presented at the Meeting
other than those set forth in the Proxy Statement. If any other business should
come before the meeting, the persons named in the accompanying proxy will vote
thereon in accordance with their best judgment.
ADDITIONAL INFORMATION
THE INVESTMENT ADVISER. Value Line, Inc., 220 East 42nd Street, New York,
NY 10017, is the investment adviser to the Fund and to the other Value Line
Mutual Funds. The Investment Adviser manages the Fund's investments, provides
various administrative services and supervises the Fund's daily business
affairs, subject to the authority of the Board of Directors.
THE DISTRIBUTOR. Value Line Securities, Inc., a subsidiary of the Adviser,
acts as principal underwriter and distributor of the Fund for the sale and
distribution of its shares.
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.
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EXHIBIT A
PLAN OF LIQUIDATION AND DISSOLUTION
OF
VALUE LINE INTERMEDIATE BOND FUND, INC.
This Plan of Liquidation and Dissolution (the "Plan") of Value Line
Intermediate Bond Fund, Inc., a Maryland corporation (the "Fund"), has been
approved by the Board of Directors of the Fund (the "Board") as being advisable
and in the best interests of the Fund and its stockholders. The Board has
directed that this Plan be submitted to the holders of the outstanding voting
shares of the Fund's Common Stock (the "Stockholders") for their adoption or
rejection at a special meeting of stockholders and has authorized the
distribution of a Proxy Statement (the "Proxy Statement") in connection with the
solicitation of proxies for such meeting. Upon such adoption, the Fund shall
voluntarily dissolve and completely liquidate in accordance with the
requirements of the Maryland General Corporation Law (the "MGCL") and the
Internal Revenue Code of 1986, as amended (the "Code"), as follows:
1.ADOPTION OF PLAN. The effective date of the Plan (the "Effective Date")
shall be the date on which the Plan is adopted by the shareholders.
2.SALE OR DISTRIBUTION OF ASSETS. As soon as practicable after the
Effective Date, but in no event later than October 31, 1997 (the
"Liquidation Period"), the Fund shall have the authority to engage in such
transactions as may be appropriate to its dissolution and liquidation,
including, without limitation, the consummation of the transactions
described in the Proxy Statement.
3.PROVISIONS FOR LIABILITIES. Within the Liquidation Period, the Fund shall
pay or discharge or set aside a reserve fund (the "Reserve Fund") for, or
otherwise provide for the payment or discharge of, any liabilities and
obligations, including, without limitation, contingent liabilities.
4.DISTRIBUTION TO STOCKHOLDERS. As soon as practicable after a vote of
approval of this Plan by the shareholders of the Fund, the Fund shall
liquidate and distribute pro rata on the date of liquidation (the
"Liquidation Date") to its shareholders of record as of the close of
business on the Liquidation Date all of the remaining assets of the Fund
in complete cancellation and redemption of all the outstanding shares of
the Fund, except for cash, bank deposits or cash equivalents in an
estimated amount necessary to (i) discharge any unpaid liabilities of the
Fund on the Fund's books on the Liquidation Date, including, but not
limited to, income dividends and capital gains distributions, in any,
payable for the period prior to the Liquidation Date, and (ii) pay such
contingent liabilities as the Fund's officers shall reasonably deem to
exist against the assets of the Fund on the Fund's books.
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5.NOTICE OF LIQUIDATION. As soon as practicable after the Effective Date
but in no event later than 20 days prior to the filing of Articles of
Dissolution as provided in Section 6 below, the Fund shall mail notice to
all its creditors and employees that this Plan has been approved by the
Board and the shareholders as provided in the MGCL.
6.ARTICLES OF DISSOLUTION. Within the Liquidation Period and pursuant to
the MGCL, the Fund shall prepare and file Articles of Dissolution (the
"Articles") with and for acceptance by the Maryland State Department of
Assessments and Taxation (the "Department").
7.AMENDMENT OR ABANDONMENT OF PLAN. The Board may modify or amend this Plan
at any time without shareholder approval if it determines that such action
would be advisable and in the best interests of the Fund and its
shareholders. If any amendment or modification appears necessary and in
the judgment of the Board will materially and adversely affect the
interests of the shareholders, such an amendment or modification will be
submitted to the shareholders for approval. In addition, the Board may
abandon this Plan without shareholder approval at any time prior to the
filing of the Articles if it determines that abandonment would be
advisable and in the best interests of the Fund and its shareholders.
8.POWERS OF BOARD AND OFFICERS. The Board and the officers of the Fund are
authorized to approve such changes to the terms of any of the transactions
referred to herein, to interpret any of the provisions of this Plan, and
to make, execute and deliver such other agreements, conveyances,
assignments, transfers, certificates and other documents and take such
other action as the Board and the officers of the Fund deem necessary or
desirable in order to carry out the provisions of this Plan and effect the
complete liquidation and dissolution of the Fund in accordance with the
Code and the MGCL including, without limitation, the filing of a Form N-8F
with the Securities and Exchange Commission and withdrawing any
qualifications to conduct business in any state in which the Fund is so
qualified, as well as the preparation and filing of any tax returns.
9.TERMINATION OF BUSINESS OPERATIONS. As soon as practicable upon adoption
of the Plan, the Fund shall cease to conduct business except as shall be
necessary in connection with the effectuation of its liquidation.
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VALUE LINE INTERMEDIATE BOND 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 Value Line Intermediate Bond Fund, Inc. at the
offices of the Fund, 220 East 42nd Street, 6th Floor, New York, New York on
September , 1997 at 10:00 a.m., and at any and all adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ITEMS ON THE REVERSE. IF YOU CANNOT BE PRESENT, PLEASE SIGN
AND RETURN THIS BALLOT PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the reverse. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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/X/PLEASE MARK VOTES
AS IN THIS EXAMPLE
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VALUE LINE INTERMEDIATE BOND FUND, INC.
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RECORD DATE SHARES:
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Please be sure to sign and date this Proxy. Date
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Stockholder sign here Co-owner sign here
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1. Proposal to liquidate the assets and dissolve the Fund pursuant to the
provisions of the Plan of Liquidation and Dissolution.
For Against Abstain
/ / / / / /
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark box at right if an address change or comment has been noted on the
reverse side of this card. / /
DETACH CARD DETACH CARD
