AND EXCHANGE COMMISSION
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Report (Date of the earliest event reported): December 23, 2010
name of registrant as specified in its charter)
or Other Jurisdiction
York, New York
of Principal Executive Offices)
Telephone Number, Including Area Code)
Name or Former Address, if Changed Since Last Report)
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
1.01 Entry into a Material Definitive Agreement.
December 23, 2010, Value Line, Inc. (“Value Line”) completed its previously
announced restructuring of its asset management business (the “Transaction”)
under EULAV Asset Management (“EAM”), a Delaware statutory trust. As
part of the Transaction: (1) EULAV Securities, Inc. (“ESI”), a New York
corporation and wholly-owned subsidiary of Value Line that acted as the
distributor of the 14 Value Line Mutual Funds (the “Value Line Funds”), was
restructured into a Delaware limited liability company named EULAV Securities
LLC; (2) Value Line transferred 100% of Value Line’s interest in EULAV
Securities LLC to EULAV Asset Management, LLC (“EAM LLC”), a Delaware limited
liability company and a wholly-owned subsidiary of Value Line that acted as the
investment adviser to the Value Line Funds and certain separate accounts; (3)
EAM LLC was converted into EAM; and (4) EAM admitted Mitchell Appel, Avi T.
Aronovitz, Richard Berenger, Howard B. Sirota and R. Alastair Short (the
“Shareholders”) as holders of profits interests and Value Line restructured its
ownership interests in EAM as described below. Pursuant to EAM’s Declaration of
Trust (the “Declaration of Trust”), Value Line has no voting authority with
respect to the election or removal of the trustees of EAM and holds an interest
in certain revenues of EAM and a portion of the residual profits of
EAM. The Shareholders were selected by the independent directors of
Value Line and hold residual profits interests in EAM. The
Shareholders paid no consideration in exchange for their interests in
business and affairs of EAM will be managed by five individual trustees
(collectively, the “Trustees”) and by its officers subject to the direction of
the Trustees. The initial Trustees are Mitchell Appel, Avi T.
Aronovitz, Richard Berenger, Howard B. Sirota, R. Alastair Short and a Delaware
resident trustee, The Corporation Trust Company, that exercises no
authority. Value Line holds non-voting interests in EAM that entitle
Value Line to receive a range of 41% to 55% of EAM’s revenues (excluding
distribution revenues) from EAM’s mutual fund and separate account
business. In addition, Value Line will receive 50% of the residual
profits of EAM (subject to temporary increase in certain limited
circumstances). The Shareholders will receive the other 50% of
residual profits of EAM. EAM will elect to be taxed as a pass-through
entity similar to a partnership. The Declaration of Trust also
provides for distribution of proceeds in the event of a full or partial sale of
EAM in accordance with capital accounts (currently approximately $56 million
held entirely by Value Line) and then in accordance with a sharing formula set
forth in the Declaration of Trust.
authorized as part of the Transaction to use the name “Value Line” for the Value
Line Funds provided certain limitations are respected in use of the
Appel, formerly the president of ESI and EAM LLC as well as of each of the Value
Line Funds, is one of the Shareholders of EAM and, effective December 23,
appointed the first
Chief Executive Officer of EAM. As previously disclosed in Value
Line’s Form 10-Q for the fiscal quarter ended October 31, 2010, filed with the
Securities and Exchange Commission (the “SEC”) on December 14, 2010, Mitchell
Appel resigned his positions as Chief Financial Officer and a director of Value
Line on December 9, 2010.
the Transaction involved EAM entering into new
investment advisory agreements with the Value Line Funds that were approved by
the shareholders of the Value Line Funds and do not differ in substance from the
previous investment advisory agreements. The Transaction was approved
by the Board of Directors of Value Line (with Messrs. Appel and Sarkany
abstaining), as being in the best interest of Value Line and its shareholders.
The new investment advisory agreements with the Value Line Funds that were
necessary for the Transaction to proceed were approved by the board of
trustees/directors of the Value Line Funds, who were not asked to and did not
approve the Transaction or its terms.
Transaction enabled Value Line and the indirect holder of a majority of its
voting stock to comply with an SEC order issued on November 4, 2009 that
required the indirect shareholder to disassociate from Value Line’s regulated
entities. By order dated November 2, 2010, the SEC extended the
deadline for compliance until December 24, 2010.
2.01 Completion of Acquisition or Disposition of Assets.
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
5.02 (c) Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
December 17, 2010, Value Line appointed John A. McKay Chief Financial Officer,
effective December 23, 2010.
joining Value Line, Mr. McKay, 51, was Senior Vice President and Chief Financial
Officer of Mitsui Foods, Inc. from April 2007 to December 2009. Prior
to his tenure at Mitsui Foods, Inc., Mr. McKay was employed by Langenscheidt
Publishing Group as Executive Vice President and Chief Financial Officer from
March 2002 to March 2007.
relationships exist between Mr. McKay and any of Value Line’s directors or
executive officers. There are no arrangements between Mr. McKay and any other
person pursuant to which Mr. McKay was selected as an officer, nor are there any
transactions to which Value Line was or is a participant and in which Mr. McKay
has a material interest subject to disclosure under Item 404(a) of Regulation
9.01. Financial Statements and Exhibits.
(b) Pro forma financial
The Unaudited Pro Forma Combined
Statements of Income of Value Line for the fiscal year ended April 30, 2010 and
the six-month period ended October 31, 2010 and the Unaudited Pro Forma
Consolidated Condensed Balance Sheet of Value Line as of October 31, 2010
illustrating the estimated effect of the Transaction as required by Article 11
of Regulation S-X were included in pages 16 – 19 in the Quarterly Report on Form
10-Q for the fiscal quarter ended October 31, 2010, filed with the SEC on
December 14, 2010.
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
December 27, 2010
/s/ Howard A. Brecher
Chairman and Acting