FEBRUARY 2011 - According to the Notice: Overview
From 1986 to November 2004, VLI directed approximately $24.2 million in brokerage commissions from the Value Line Funds to an
affiliated broker-dealer, Value Line Securities, Inc. (“VLS”), without disclosing to the Funds or the Funds’ shareholders that VLS did not
provide any brokerage services to the Funds for these commissions. On November 4, 2009, the Commission, VLI, VLS, and two
individuals at these companies1 entered into a settlement, described in greater detail below, in which VLI paid to the Commission
$24,168,979 in disgorgement, $9,536,786 in prejudgment interest, and $10,000,000 as a civil penalty. These amounts have been paid and
placed into a Fair Fund created by the Commission. The Distribution Plan proposes to distribute from the Fair Fund to eligible investors
their share of losses resulting from the violations, plus interest.

The Distribution Plan is subject to approval by the Commission, and the Commission retains jurisdiction over implementation of the
Distribution Plan.

Settlement Description

On November 4, 2009, the Commission entered an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings,
and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b)(4),
15(b)(6) and 21C of the Securities Exchange Act of 1934, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and
Sections 9(b) and 9(f) of the Investment Company Act of 1940 (Securities Act Release No. 9081) (the “Order”) with respect to
Respondents. Simultaneously with the entry of the Order, the Commission accepted settlement offers from Respondents in which
Respondents consented to the entry of the Order without admitting or denying the Order’s findings, except as to jurisdiction.

In the Order, the Commission found that VLI, VLS, Buttner, and Henigson willfully violated Section 17(a) of the Securities Act of 1933
(“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder;
VLI willfully violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”), and VLS, Buttner, and
Henigson willfully aided and abetted and caused VLI’s violations of Sections 206(1) and 206(2) of the Advisers Act; VLI willfully
violated Section 207 of the Advisers Act; VLI willfully violated Section 15(c) of the Investment Company Act of 1940 (“Investment
Company Act”); VLI and VLS willfully violated Section 17(e)(1) of the Investment Company Act; and VLI, Buttner, and Henigson
willfully violated Section 34(b) of the Investment Company Act. As a remedial sanction, the Commission ordered that VLI pay
disgorgement in the amount of $24,168,979, plus prejudgment interest of $9,536,786. Additionally, civil monetary penalties were ordered
to be paid by VLI in the amount of $10,000,000, by Buttner in the amount of $1,000,000, and by Henigson in the amount of $250,000.

In accordance with the Order, monies totaling $44,955,765 were paid to the Commission, of which $43,705,765 comprising VLI’s
payment of disgorgement, prejudgment interest, and civil penalties was used to create a Fair Fund pursuant to Section 308(a) of the
Sarbanes-Oxley Act of 2002, 15 U.S.C. Section 7246, and Rule 1100 of the Commission’s Rules on Fair Funds and Disgorgement Plans,
17 C.F.R. 201.100. The SEC Fair Fund (also referred to herein as the “Distribution Fund”) has been deposited at the U.S. Department of
the Treasury Bureau of the Public Debt (“BPD”) for investment. Other than interest from those investments, it is not anticipated the SEC
Fair Fund will receive additional funds.

The purpose and intent of the Distribution Plan is to distribute a portion of the Distribution Fund to persons who held shares of any of the
Value Line Funds during the Relevant Period2 based on the Plan of Allocation described herein. The Fund Administrator has agreed to
take reasonable steps to identify and contact all potential Claimants,3 verify each potential Claimant’s eligibility to receive a share of the
Distribution Fund,4 calculate each Claimant’s Disbursement5 amount, resolve any disputes, and distribute the Distribution Fund to those
Claimants whom the Fund Administrator determines to be eligible.