VALUE LINE INC — Proxy Solicitation & Information Statement 1998

Nov 3, 1998

SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant / / 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, INC. - -------------------------------------------------------------------------------- (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/ 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: ------------------------------------------------------------------------ (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: ------------------------------------------------------------------------ VALUE LINE, INC. 220 EAST 42ND STREET NEW YORK, NEW YORK 10017 -------------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS ------------- TO THE SHAREHOLDERS: Notice is hereby given that the Annual Meeting of the Shareholders of Value Line, Inc. (the "Company") will be held on November 25, 1998, at 9:30 a.m. at the offices of Value Line Distribution Center, Inc. 125 East Union Avenue, East Rutherford, NJ 07073 for the following purposes: 1. To elect seven directors of Value Line, Inc.; and 2. To transact such other business as may properly come before the meeting. Shareholders of record at the close of business on October 28, 1998 will be entitled to notice of and to vote at the meeting and any adjournments thereof. We urge you to vote on the business to come before the meeting by promptly executing and returning the enclosed proxy in the envelope provided or by casting your vote in person at the meeting. By order of the Board of Directors HOWARD A. BRECHER, VICE PRESIDENT AND SECRETARY New York, New York November 4, 1998 VALUE LINE, INC. 220 EAST 42ND STREET NEW YORK, NEW YORK 10017 -------------- ANNUAL MEETING OF SHAREHOLDERS--NOVEMBER 25, 1998 -------------- PROXY STATEMENT The following information is furnished to each shareholder in connection with the foregoing Notice of Annual Meeting of Shareholders of Value Line, Inc. (the "Company") to be held on November 25, 1998. The enclosed proxy is for use at the meeting and any adjournments thereof. This Proxy Statement and the form of proxy are being mailed to stockholders on or about November 4, 1998. The enclosed proxy is being solicited by and on behalf of the Board of Directors of the Company. A proxy executed on the enclosed form may be revoked by the shareholder at any time before the shares are voted by delivering written notice of revocation to the Secretary of the Company, by executing a later dated proxy or by attending the meeting and voting in person. The shares represented by all proxies which are received by the Company in proper form will be voted as specified. If no specification is made in a proxy, the shares represented thereby will be voted for the election of the Board's nominees as Directors. The expense in connection with the solicitation of proxies will be borne by the Company. Only holders of Common Stock of record at the close of business on October 28, 1998 will be entitled to vote at the meeting. On that date, there were 9,978,625 shares of Common Stock issued and outstanding, the holders of which are entitled to one vote per share. Under the New York Business Corporation Law (the "BCL") and the Company's By-Laws, the presence, in person or by proxy, of the holders of a majority of the outstanding shares of Common Stock entitled to vote on a particular matter is necessary to constitute a quorum of shareholders to take action at the Annual Meeting with respect to such matter. For these purposes, shares which are present, or represented by a proxy, at the Annual Meeting will be counted for quorum purposes regardless of whether the holder of the shares or proxy fails to vote on any particular matter or whether a broker with discretionary authority fails to exercise its discretionary voting authority with respect to any particular matter. Once a quorum of the shareholders is established, under the BCL and the Company's By-Laws, the nominees standing for election as directors will be elected by a plurality of the votes cast and each other matter will be decided by a majority of the votes cast on the matter, except as otherwise provided by law or the Company's Certificate of Incorporation or By-Laws. For voting purposes (as opposed to for purposes of establishing a quorum) abstentions and broker non-votes will not be counted in determining whether the nominees standing for election as directors have been elected and whether each other matter has been approved. 1 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information as of October 28, 1998 as to shares of the Company's Common Stock held by persons known to the Company to be the beneficial owners of more than 5% of the Company's Common Stock.

The following table sets forth information as of June 30, 1998 with respect to shares of the Company's Common Stock owned by each director of the Company, by each executive officer listed in the Summary Compensation Table and by all executive officers and directors as a group.

• Less than one percent (1) Excludes 8,044,800 shares (80.62% of the outstanding shares) owned by Arnold Bernhard & Co., Inc. (2) Includes 2,975 shares purchasable within 60 days of June 30, 1998 upon the exercise of stock options by Mr. Brecher. 2 ELECTION OF DIRECTORS At the meeting, seven directors are to be elected. If no contrary indication is made, the persons named in the enclosed proxy will vote for the election of the nominees listed below. If any nominee shall become unavailable for reasons presently unknown, the proxy will be voted for the election of the other nominees named herein and may be voted for the election of a substitute nominee. During the fiscal year ended April 30, 1998, there were four meetings of the Board of Directors. Each of the directors named below attended at least 75% of the meetings held during the year of the Board of Directors and of each committee on which he or she served. The Board of Directors has established an Audit Committee presently consisting of Jean Bernhard Buttner, Harold Bernard, Jr., and W. Scott Thomas. The Committee held two meetings during the year ended April 30, 1998 to discuss audit and financial reporting matters with both management and the Company's independent public accountants. The Board of Directors has also established a Compensation Committee consisting of Jean Bernhard Buttner, Howard A. Brecher and David T. Henigson. The Company does not have a standing nominating committee. A director who is also an employee of the Company receives no compensation for his service on the Board in addition to that compensation which he receives as an employee. For fiscal 1998, a director who was not an employee of the Company was paid a director's fee of $3,000 per year plus $1,750 for each Board meeting attended and $2,500 for each committee meeting attended. Information concerning the nominees for directors appears in the following table. Except as otherwise indicated, each of the following has held an executive position with the companies indicated for at least five years.

• --------- * Member of the Executive Committee. 3 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth information concerning the compensation for services in all capacities to the Company for the fiscal years ended April 30, 1998, 1997 and 1996 of the chief executive officer of the Company and each of the other executive officers of the Company who were serving at April 30, 1998. The Company has four executive officers.

4 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES The following table sets forth the number of shares acquired by any of the named persons upon exercise of stock options in fiscal 1998, the value realized through the exercise of such options, and the number of unexercised options held by such person, including both those which are presently exercisable, and those which are not presently exercisable.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Arnold Bernhard & Co., Inc. utilizes the services of officers and employees of the Company to the extent necessary to conduct its business. The Company and Arnold Bernhard & Co., Inc. allocate costs for office space, equipment and supplies and staff pursuant to a servicing and reimbursement arrangement. During the year ended April 30, 1998, the Company was reimbursed $461,000 for such expenses. In addition, a tax-sharing arrangement allocates the tax liabilities of the two companies between them. The Company pays to Arnold Bernard & Co., Inc. an amount equal to the Company's liability as if it filed separate tax returns. COMPENSATION COMMITTEE REPORT The goals of the Company's executive compensation program are to enable the Company to attract and retain experienced and talented executives, to promote successful corporate performance and to reward executives who contribute to the management and profitability of the Company. The following guidelines have been established to carry out this policy: (a) Base salaries and bonuses should be maintained at levels consistent with competitive market compensation practices; and (b) A portion of the executive compensation should be tied to the performance of the Company and the individual. The Company's compensation program is comprised of two main components: Base Salary and Incentive Compensation (Bonus). 5 BASE SALARY Base salaries for the Company's executives are considered annually taking into account the amounts paid by companies of comparable size engaged in the business of publishing or investment management, as applicable. The Committee believes that the base salary levels as established are reasonable and competitive and necessary to attract and retain key employees. ANNUAL INCENTIVE COMPENSATION PLAN Bonus payments are awarded to executives based upon competitive compensation needs and Company and individual performance. The performance of the Company and attainment of individual goals and objectives are given approximately equal weighting in determining bonuses paid to all executive officers. The Internal Revenue Code limits to one million dollars the allowable tax deduction that may be taken by the Company for compensation paid to each executive officer included in the Summary Compensation Table. Compensation in excess of the one million dollar limit is deductible only if a series of requirements are met. The Company's compensation program does not attempt to meet all the applicable Internal Revenue Service requirements for such deduction because the Company considers it essential to retain flexibility in establishing performance standards which recognize a full range of criteria important to the Company's long-run success, such as appropriate investments in research and product development and other strategic decisions, even where some portion of executive compensation may not be deductible. In addition, performance goals for the Company would be difficult to set appropriately because the Company has several important lines of business, the financial results for which depend in large part on equity market conditions beyond the control of management. CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL 1998 Jean B. Buttner's base salary in fiscal 1998 was increased from that paid in fiscal 1997 on the basis of the general cost-of-living percentage increase awarded to Company personnel. Mrs. Buttner was awarded a bonus under the Company's annual incentive compensation plan for fiscal 1997 of $700,000. In establishing this bonus, consideration was given to a number of significant individual and Company achievements during the fiscal year, including new record highs for the Company for revenues, income from operations and operating profit margin. The Company has two substantial lines of business, whereas most of its competitors have a single line of business. As a result, the Committee considered CEO compensation in both the investment management and publishing industries. Compensation in investment management was deemed more relevant in determining compensation for the CEO position. At the request of the Compensation Committee, Watson Wyatt Worldwide conducted a study of Mrs. Buttner's fiscal 1998 compensation. The study included a comparative analysis of both Mrs. Buttner's compensation package and the financial performance of the Company. Watson Wyatt Worldwide observed in its report for 1998, that the Company performed well relative to a peer group of mutual fund asset managers and broker/dealers, surpassing 75th percentile performance for the significant criteria of Return on Sales and Return on Equity. 6 The report indicated that based on Watson Wyatt Worldwide's surveyed compensation data, Mrs. Buttner's total direct compensation for fiscal 1998 fell between the median and the 75th percentile of such data. It concluded that given the Company's superior financial performance for fiscal 1998, Mrs. Buttner's total direct compensation is reasonable in terms of that offered by comparable companies. COMPENSATION COMMITTEE Jean B. Buttner Howard A. Brecher David T. Henigson COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The names of the members of the Compensation Committee during the fiscal year ended April 30, 1998 are set forth above. During such fiscal year, each of Jean Bernhard Buttner, Howard A. Brecher and David T. Henigson served as an officer and director of the Company and each of its subsidiaries. Each of such individuals also served as an officer and director of Arnold Bernhard & Co., Inc. Certain relationships between the Company and Arnold Bernhard & Co., Inc. are described above under "Certain Relationships and Related Transactions." 7 COMPARATIVE FIVE-YEAR TOTAL RETURNS* EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

Assumes $100 invested at the close of trading on April 30, 1993 in Value Line, Inc. common stock, Russell 2000 Index, and Peer Group. *Cumulative total return assumes reinvestment of dividends. (1) The Peer Group is comprised of the following companies: Alliance Capital Management L.P. Dun & Bradstreet Corp. Eaton Vance Corp. McGraw Hill Companies, Inc. Thomas Nelson, Inc. Pioneer Group Inc. Plenum Publishing Corp. T. Rowe Price & Associates, Inc. (2) The Company believes that its total return is impeded by the relatively small float of public shares outstanding and the resulting illiquidity in trading. The Compensation Committee Report and the Comparative Five-Year Total Returns graph shall not be deemed to be "soliciting material" or to be "filed" with the Securities and Exchange Commission or subject 8 to Regulation 14A or 14C of the Regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or to the liabilities of Section 18 of the Exchange Act. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The independent certified public accountants selected by the Board of Directors to audit the Company's books and records for the 1999 fiscal year are the firm of Horowitz & Ullmann, P.C., which firm also audited the Company's books and records for the fiscal year ended April 30, 1998. It is expected that a representative of Horowitz & Ullmann, P.C. will be present at the Annual Meeting. SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING Shareholder proposals intended for presentation at the next Annual Meeting of Shareholders must be received by the Company for inclusion in its proxy statement and form of proxy relating to that meeting no later than the date provided in the Company's By-Laws. To be timely, a shareholder must have given written notice of proposals to the Chairman of the Board of Directors with a copy to the Secretary and such notice must be received at the principal executive offices of the Company not less than thirty nor more than sixty days prior to the scheduled annual meeting; provided, however, that if less than forty days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the shareholder to be timely must be so received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. Such shareholder's notice shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Company's books, of the shareholder proposing such business, (iii) the class and number of shares which are beneficially owned by the shareholder on the date of such shareholder notice and (iv) any material interest of the shareholder in such proposal. 9 FORM 10-K ANNUAL REPORT ANY SHAREHOLDER WHO DESIRES A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 1998 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY OBTAIN A COPY (EXCLUDING EXHIBITS) WITHOUT CHARGE BY ADDRESSING A REQUEST TO THE SECRETARY OF THE COMPANY AT 220 EAST 42ND STREET, NEW YORK, NEW YORK 10017. EXHIBITS MAY ALSO BE REQUESTED, AT A CHARGE EQUAL TO THE REPRODUCTION AND MAILING COSTS. GENERAL The Board of Directors is not aware of any business to come before the meeting other than that set forth in the Notice of Annual Meeting of Shareholders. However, if any other business is properly brought before the meeting, it is the intention of the persons directed to vote the shareholders stock to vote such stock in accordance with their best judgment. The Company is mailing its Annual Report for the fiscal year ended April 30, 1998 to shareholders together with this Proxy Statement. 10 P R O X Y VALUE LINE, INC. 220 EAST 42ND STREET NEW YORK, NY 10017 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby authorizes and directs Howard A. Brecher and David T. Henigson and each of them, with full power of substitution, to vote the stock of the undersigned at the Annual Meeting of Stockholders of VALUE LINE, INC. on Wednesday, November 25, 1998, or at any adjournments thereof as hereinafter specified and, in their discretion, to vote according to their best judgment upon such other matters as may properly come before the meeting or any adjournments thereof. (CONTINUED ON REVERSE SIDE) - ------------------------------------------------------------------------------- * FOLD AND DETACH HERE * Mark your vote as indicated /x/ on the election of all nominees in this example ELECTION OF NOMINEES AS DIRECTORS: H. BERNARD, JR., J. BUTTNER, S. EISENSTADT, W.S. THOMAS, L.S. WILSON, H.A. BRECHER AND D.T. HENIGSON FOR all nominees listed above (except as marked to the contrary) / / WITHHOLD AUTHORITY to vote for all nominees listed above / / (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) ---------------------------------------------------------------- PLEASE SIGN EXACTLY AS YOUR NAME APPEARS TO THE LEFT. WHEN SIGNING AS TRUSTEE, EXECUTOR, ADMINISTRATOR, OR OFFICER OF A CORPORATION GIVE TITLE AS SUCH. DATED ____, 1998 ---------------------------------------- SIGNATURE ---------------------------------------- SIGNATURE, IF OWNED JOINTLY PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. - ------------------------------------------------------------------------------- * FOLD AND DETACH HERE *