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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2O549
FORM 10-K
Annual Report Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
For the fiscal year ended April 3O, l996 Commission File Number 0-ll3O6
VALUE LINE, INC.
(Exact name of registrant as specified in its charter)
New York l3-3l39843
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
220 East 42nd Street, New York, N.Y. lOOl7-5891
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 907-1500
Securities registered pursuant to Section l2(b) of the Act:
None
Securities registered pursuant to Section l2(g) of the Act:
Common Stock, $.10 par value
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months and (2) has been subject to such filing
requirements for the past 9O days.
Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates on June 28, 1996 was $66,883,950.
There were 9,976,975 shares of the Company's Common Stock outstanding at
June 28, 1996.
DOCUMENTS INCORPORATED BY REFERENCE.
The following documents are incorporated by reference with this filing:
Part III: l996 Definitive Proxy Statement.
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Part I
Item l. BUSINESS.
Value Line, Inc. (the "Company"), a New York corporation, was organized in
l982 and is the successor to substantially all of the operations of Arnold
Bernhard & Company, Inc. ("AB&Co.").
The Company's primary businesses are producing investment related
periodical publications through its wholly-owned subsidiary Value Line
Publishing, Inc. ("VLP") and providing investment advisory services to mutual
funds, institutions, and individual clients. VLP publishes The Value Line
Investment Survey, one of the nation's major periodical investment services, as
well as The Value Line Investment Survey - Expanded Edition, The Value Line
Mutual Fund Survey, The Value Line No-Load Fund Advisor, The Value Line OTC
Special Situations Service, The Value Line Options Survey, The Value Line
Convertibles Survey and The Value Line Industry Review which is only available
in electronic format. The Company's periodical publications are direct marketed
through media and direct mail to retail and institutional investors. The
Company is investment adviser for the Value Line Family of Mutual Funds, which
on April 30, l996, included 16 open-end investment companies with various
investment objectives. In addition, the Company manages investments for private
and institutional clients and, through VLP, provides financial database
information through computer media and computer time-sharing facilities
(DataFile and other services). VLP also markets personal computer software
services (VALUE/SCREEN III) and other electronic products for institutional
investors. The Company is registered with the Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act of l94O.
In addition to VLP, the Company's other wholly-owned subsidiaries include a
registered broker-dealer, Value Line Securities, Inc., and an advertising
agency, Vanderbilt Advertising Agency, Inc. These subsidiaries primarily
provide services used by the Company in its publishing and investment management
businesses. Compupower Corporation, another subsidiary, serves the subscription
fulfillment needs of publishers. The name "Value Line," as used to describe the
Company, its products, and its subsidiaries, is a registered trademark of the
Company. As used herein, except as the context otherwise requires, the term
"Company" includes the Company and its consolidated subsidiaries.
A. Investment Information and Publications.
VLP publishes investment related publications and produces electronic
products described below:
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1. Publications:
The Value Line Investment Survey is a weekly investment related periodical
that in addition to various timely articles on current economic, financial and
investment matters ranks common stocks for future relative performance based on
computer-generated statistics of financial results and stock market performance.
The key evaluations for each stock covered are "Timeliness(TM)" and "Safety."
"Timeliness(TM)" relates to the probable relative price performance of a stock
over the next six to twelve months, as compared to the rest of the approximately
l,7OO covered stocks. Rankings are updated each week and range from Rank l for
the expected best performing stocks to Rank 5 for the expected poorest
performers. "Safety" rankings are a measure of risk and are based primarily on
the issuer's relative financial strength and the stock's price stability.
"Safety" ranges from Rank l for the least risky stocks to Rank 5 for the
riskiest. Value Line employs approximately 90 analysts and statisticians who
prepare articles of interest for each periodical and who evaluate stock
performance and provide future earnings estimates and quarterly written
evaluations with weekly updates when relevant. The annual subscription price of
The Value Line Investment Survey is $570.
The Expanded Edition of The Value Line Investment Survey was introduced by
the Company in April 1995. It provides detailed descriptions of 1,800
additional small- and medium-capitalization stocks, many listed on NASDAQ,
beyond the 1,700 stocks of larger- capitalization companies traditionally
covered in The Value Line Investment Survey.
Like The Value Line Investment Survey, the Expanded Edition has its own
"Summary & Index" providing updated ranks and other data, as well as "screens"
of key financial performance measures. The "Ratings and Reports" section,
providing updated reports on about 140 stocks each week, has been organized to
correspond closely to the industries reviewed in the Standard Edition of The
Value Line Investment Survey. A new combined Index, published quarterly, allows
the subscriber to locate easily a specific stock among the 3,500 stocks covered.
The Expanded Edition includes a number of new as well as standard features:
- - A new Performance Ranking System incorporates many of the elements of the
Value Line Timeliness/TM Ranking System, modified to accom-modate the 1,800
stocks in the Expanded Edition. The Performance/TM Rank is based on
earnings growth and price momentum and is designed to predict relative
price performance over the next six to 12 months.
- - An expanded Business Section provides detail about companies, focusing on
business lines and strategies.
- - An enlarged Assets and Liabilities Section provides long-term statistics
and a more complete balance sheet on each company.
- - New Total-Return Statistics provide an "at a glance" look at a particular
stock's performance -- appreciation plus dividends -- over the past three
months, six months, and one, three, and five
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years.
The principal difference between the Expanded Edition and The Value Line
Investment Survey is that the Expanded Edition does not include financial
forecasts or analysts' comments. This modification has allowed Value Line to
offer this service at a low price.
The cost of the Expanded Edition to current subscribers of The Value Line
Investment Survey is $125 per year and $695 per year for new subscribers
combining both Editions.
The Value Line Mutual Fund Survey provides full-page profiles of 1500
mutual funds and condensed coverage of an additional 550 funds. Every two weeks
subscribers receive an updated issue, containing about 150 fund reports, plus a
"Performance & Index" providing current rankings and performance figures for the
full universe of more than 2,000 funds. The Value Line Mutual Fund Survey also
includes semi-annual profiles and analyses on 100 of the nation's major fund
families. Additionally, subscribers receive a 12-page periodical monthly
newsletter containing articles of general interest to subscribers and readers,
"The Value Line Mutual Fund Advisor," with articles on investment trends and
issues concerning mutual fund investors. Funds are ranked for both risk and
overall risk-adjusted performance using strictly quantitative means. A large
binder is provided to house the periodic fund reports. A second binder is
provided to full-term subscribers for the periodical monthly newsletter. The
annual subscription price of The Value Line Mutual Fund Survey is $295.
The Company instituted on-line distribution of individual one-page reports
from The Value Line Investment Survey and The Value Line Mutual Fund Survey
through the CompuServe on-line network. The price per page for these documents
is $5.
The Value Line No-Load Fund Advisor is a periodical monthly newsletter for
investors who wish to manage their own portfolios of no- and low-load, open-end
mutual funds. Each issue features strategies for maximizing total return, with
special attention given to tax considerations. Also featured are in-depth
interviews with noted portfolio managers, model portfolios for a range of
investor profiles, and information about retirement planning, industry news, and
listings (with descriptions) of new funds worthy of further consideration. A
full statistical review, including latest performance, rankings, and sector
weightings, is updated each month on 600 leading no-load and low-load funds.
The annual subscription price of The Value Line No-Load Fund Advisor is $107.
The Value Line OTC Special Situations Service, published periodically 24
times a year, concentrates on fast-growing, smaller companies whose stocks are
perceived by Company analysts as having exceptional appreciation potential. The
annual subscription price of The Value Line OTC Special Situations Service is
$429.
The Value Line Options Survey, a periodical weekly service published 48
times a year, evaluates and ranks for future performance the most active options
listed on United States exchanges (approximately 8,000). The annual
subscription price of The Value
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Line Options Survey is $445. An electronic version of this publica-tion, The
Value Line Daily Options Survey was introduced during the latter part of fiscal
1995.
The Value Line Convertibles Survey, a periodical service published 48 times
a year, evaluates and ranks for future market performance approximately 58O
convertible securities (bonds and preferred stocks) and approximately 75
warrants. The annual subscription price of The Value Line Convertibles Survey
is $625.
The Value Line Industry Review, a periodical monthly publication now
available only in electronic form, evaluates 104 industry groups for relative
performance. Providing detailed and extensive sector analysis, it is designed
to meet the needs of professional portfolio managers. The annual subscription
price of The Value Line Industry Review is $1,075.
The Total Return Service is a customized data service derived from The
Value Line Industry Review publication. It was developed to help publicly
traded companies meet the SEC's mandated executive-compensa-tion disclosure
requirements. The service consists of a line graph comparing the total return
of a public company's stock over the last five years to a published equity
market index and a published or constructed industry index.
2. Electronic Products:
Value Line Investment Survey for Windows is a powerful menu-driven software
program with fast filtering, ranking, reporting and graphing capabilities on
over 5,000 stocks, including the 1,700 stocks covered in the Company's benchmark
publication, The Value Line Investment Survey. The product was introduced to
the market during June 1996 and available during July 1996 for distribution.
Value Line Fund Analyzer and Value Line No-Load Analyzer are electronic
versions of the Mutual Fund Survey launched in the latter part of fiscal 1995.
Value Line Investment Survey for Windows provides over 200 search fields on
each stock, more than 50 charting and graphing variables for comparative
research, and 10 years of historical financial data for scrutinizing
performance, risk and yield. The software includes Portfolio Manager, a special
module that lets users create and track their own stock portfolios. An
exclusive E-page feature on the CD-ROM version allows the user to view and print
actual full-page stock reports from the respected Value Line Investment Survey
publication. In addition, weekly updates and technical support are available
through Value Line Online, the Company's proprietary Bulletin Board.
To access the 1,700 stocks covered exclusively in The Value Line Investment
Survey publication, subscribers are offered a two-month trial subscription with
monthly updates and Value Line Online weekly data for $55, or a full year
subscription for $595. This product is available on both CD-ROM and 3.5 disk.
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A Special 5,000 Stock Edition, a powerful yet economical profes-sional tool
on CD-ROM, is available with monthly updates and Value Line Online weekly data
for $95 for a two-month trial subscription, or $995 for a full year. This
Special Edition contains full financial and business descriptions on over 5,000
stocks, Timeliness and Safety Rankings on 3,500 stocks, and 1,700 stocks with
analysts' comments and estimates found in The Value Line Investment Survey
publication.
Both versions are compatible with Windows 95 or 3.1. A system of 486 or
higher is recommended, with 8MB RAM minimum and 35MB of free hard disc space.
VALUE/SCREEN III is a data and software service for screening common
stocks. It is intended for use by investors with personal computers and is sold
primarily to retail investors. It provides extensive financial data on about
1,600 companies covered by The Value Line Investment Survey. Users can screen
on as many as 49 variables for companies' financial performance and for
investment objectives.
Value Line DataFile contains historic annual and quarterly financial
records for more than 5,400 companies in numerous industries, including air
transport, industrial services, beverage, machinery, bank, insurance and
finance, savings and loan associations, toys, and securities brokers. DataFile
is sold to the institutional market. The Company also offers an Estimates and
Projections File, with year-ahead and three- to five-year estimates of financial
performance and projections of stock-price ranges, as well as a Convertible
Securities File, The Value Line Industry Review, and custom services.
B. Investment Management.
As of April 30, 1996, the Company was the investment adviser for 16 mutual
funds registered under the Investment Company Act of l94O. Value Line
Securities, Inc., a wholly owned subsidiary of the Company, underwrites and
distributes shares of the Value Line Funds. State Street Bank and Trust
Company, an unaffiliated entity, acts as custodian of the Funds' assets.
Shareholder services for the Value Line Funds are provided by National Financial
Data Services.
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Total net assets of the Value Line Funds at April 30, 1996, were:
(in millions)
The Value Line Fund, Inc. $ 360
The Value Line Income Fund, Inc. 148
The Value Line Special Situations Fund, Inc. 102
Value Line Leveraged Growth Investors, Inc. 382
The Value Line Cash Fund, Inc. 341
Value Line U.S. Government Securities Fund, Inc. 221
Value Line Centurion Fund, Inc. 572
The Value Line Tax Exempt Fund, Inc. 231
Value Line Convertible Fund, Inc. 74
Value Line Aggressive Income Trust 48
Value Line New York Tax Exempt Trust 38
Value Line Strategic Asset Management Trust 984
Value Line Intermediate Bond Fund, Inc. 16
Value Line Small-Cap Growth Fund, Inc. 20
Value Line Asset Allocation Fund, Inc. 60
Value Line U.S. Multinational Company Fund, Inc. 13
------
$3,610
The investment advisory contracts between each of the Value Line Funds and
the Company provide that the Company will render investment research, advice,
and supervision to the funds. These contracts must be approved annually in
accordance with statutory procedures. The Company furnishes each fund with its
investment program, subject to such fund's fundamental investment policies and
to control and review by such fund's Board of Directors or Trustees. Each
contract also provides that the Company will furnish, at its expense, various
administrative services, office space, equipment and administrative personnel
necessary for managing the affairs of the funds. Advisory fee rates vary among
the funds and may be subject to certain limitations. Each mutual fund may use
"Value Line" in its name only so long as the Company acts as its investment
adviser. The Company has agreed to waive its advisory fees payable by the Value
Line U.S. Multina-tional Company Fund, Inc. and to absorb all operating expenses
(other than brokerage commissions) until September 30, 1996.
Value Line Asset Management ("VLAM"), a division of the Company, manages
pension funds and institutional and individual portfolios by utilizing the
techniques developed for The Value Line Investment Survey. VLAM has varied
investment advisory agreements with its clients which call for payments to the
Company calculated on the basis of the market value of the securities portfolio
under management.
The Company also acts as investment adviser for the Hyperion Value Line
Equity Trust, a Canadian mutual fund, and as sub-advisor to other mutual funds.
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C. Wholly-Owned Operating Subsidiaries:
1. Vanderbilt Advertising Agency, Inc.:
Vanderbilt Advertising Agency, Inc. ("Vanderbilt") places advertising for
the Company's publications, investment advisory services, and mutual funds.
Commission income generated by Vanderbilt serves to reduce the Company's
advertising expenses.
2. Compupower Corporation:
Compupower provides computerized subscription fulfillment services for the
Company and for other publishers. For the year ended April 3O, l996,
approximately 36% of Compupower's revenues were derived from services rendered
to the Company.
3. Value Line Securities, Inc.:
Value Line Securities, Inc. ("VLS") is registered as a broker-dealer under
the Securities Exchange Act of l934 and is a member of the National Association
of Securities Dealers, Inc. VLS acts as the underwriter and distributor of the
Value Line Funds. Shares of the Value Line Funds are sold to the public without
a sales charge (i.e., on a "no-load" basis), and VLS derives no revenue from
such sales. Since l986, VLS has effected listed portfolio brokerage
transactions for certain of the Value Line Funds, clearing such transactions on
a fully disclosed basis through unaffiliated broker-dealers who receive a
portion of the gross commissions. Value Line Securities also receives 12b-1
fees from certain of the Value Line Funds.
D. Other Businesses.
The Company publishes the Value Line Arithmetic Composite and the Value
Line Geometric Composite, daily indices of the stock market performance of the
approximately l,7OO common stocks contained in The Value Line Investment Survey.
The calculation of both indices is done by a firm unaffiliated with the Company.
Futures contracts based upon fluctuations in the Value Line Arithmetic Composite
are traded on the Kansas City Board of Trade, and options on the Index are
traded on the Philadelphia Stock Exchange. The Company receives fees in
connection with these activities.
E. Investments.
The Company invests in the Value Line Funds and in other marketable
securities.
F. Employees.
At April 30, 1996, the Company and its subsidiaries employed 381
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persons.
The Company, its affiliates, and its officers, directors, and employees may
from time to time own securities which are also held in the portfolios of the
Value Line Funds or recommended in the Company's publications. The Company has
imposed rules upon itself and such persons requiring monthly reports of
securities transactions for their respective accounts and restricting trading in
various types of securities in order to avoid possible conflicts of interest.
G. Assets.
The Company's assets identifiable to each of its principal business
segments were as follows:
April 30,
1996 1995
(in thousands)
Investment Information
& Publications $ 15,902 $ 11,788
Investment Management 271,088 208,930
Corporate Assets 46,836 44,280
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$333,826 $264,998
======== =========
H. Competition.
The investment management and the investment information and publications
industries are very competitive. There are many competing firms and a wide
variety of product offerings. Some of the firms in these industries are
substantially larger and have greater financial resources than the Company. The
Company believes that it is one of the world's largest independent securities
research organiza-tions and that it publishes the world's largest investment
service periodicals in terms of number of subscriptions and annual revenues.
I. Executive Officers.
The following table lists the names, ages (at June 28, 1996), and principal
occupations and employment during the past five years of the Company's Executive
Officers. All officers are elected to terms of office for one year. Except as
otherwise indicated, each of the following has held an executive position with
the companies indicated for at least five years.
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Name Age Principal Occupation or Employment
- --------------------- --- ----------------------------------
Jean Bernhard Buttner 61 Chairman of the Board, President, and Chief
Executive Officer of the Company and AB&Co.
Chairman of the Board of each of the Value
Line Funds.
Samuel Eisenstadt 74 Senior Vice President and Research Chairman.
David T. Henigson 38 Vice President since 1992 and Treasurer since
1994; Director of Compliance and Internal
Auditor; Vice President of each of the Value
Line Funds since 1992 and Secretary and
Treasurer since 1994.
Howard A. Brecher 42 Vice President since 1996 and Secretary since
1992; Secretary and General Counsel of AB&Co.
since 1991.
Item 2. PROPERTIES.
On June 4, 1993, the Company entered into a new lease agreement for
approximately 80,000 square feet that provided for the relocation of its office
space to 220 East 42nd Street, New York, New York. The Company owns a
distribution facility of approximately 23,OOO square feet in North Bergen, New
Jersey. The primary purpose of this location is the distribution of the
Company's publication products. Compupower leases its approximately
8,OOO-square foot-office and computer facility in Secaucus, New Jersey. During
January 1996, a subsidiary of the Company purchased for cash an approximately
85,000 square foot warehouse facility for $4,100,000. The new facility will
consolidate into a single facility the distribution operations for the various
Company publications and the fulfillment operations of Compupower Corporation.
The remaining building capacity will provide warehouse storage, a disaster
recovery site and will provide for future business expansion. The Company
believes the capacity of these facilities is sufficient to meet the Company's
current and expected future requirements.
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Item 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the stockholders during the fourth
quarter of the fiscal year ended April 30, l996.
Part II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Registrant's Common Stock is traded in the over-the-counter market.
The approximate number of record holders of the Registrant's Common Stock at
April 3O, l996 was 1,361. Over-the-counter price quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions. The range of the bid and asked
quotations and the dividends paid on these shares during the past two fiscal
years were as follows:
Dividend
High Low Declared
Quarter Ended Bid Asked Bid Asked Per Share
July 31, 1994...... 34 36 31 1/2 33 .20
October 31, 1994... 32 34 1/2 30 1/2 32 1/2 .20
January 31, 1995... 30 1/2 33 29 30 3/4 .0
April 30, 1995..... 31 33 1/4 26 3/4 29 .20
July 31, 1995...... 32 32 3/4 28 1/2 28 1/2 .20
October 31, 1995... 33 3/4 34 1/4 29 3/4 29 3/4 .20
January 31, 1996... 39 1/2 39 1/2 32 1/2 32 3/4 .20
April 30, 1996..... 39 3/8 40 1/2 32 1/2 34 1/2 .20
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Item 6. SELECTED FINANCIAL DATA.
Earnings per share for each of the fiscal years shown below are based on
the weighted average number of shares outstanding.
Years ended April 30,
1996 1995 1994 1993 1992
(in thousands, except per share amounts)
Revenues:
Investment
periodicals
and related
publications... $ 58,509 $ 55,912 $ 57,830 $ 56,127 $ 53,745
Investment
management
fees and services $ 26,564 $ 23,182 $ 24,220 $ 22,274 $ 20,816
Settlement of
disputed securities
transactions $ 2,054 $ 617 $ 408 $ - $ 862
Total revenues $ 87,127 $ 79,711 $ 82,458 $ 78,401 $ 75,423
Income from
operations...... $ 32,486 $29,660 $ 32,464 $ 30,667 $ 30,012
Net income........ $ 41,714 $ 23,168 $ 28,902 $ 27,723 $ 26,265
Earnings per
share........... $ 4.18 $ 2.32 $ 2.90 $ 2.78 $ 2.64
Total assets..... $333,826 $264,998 $200,321 $176,095 $152,457
Long term debt.... $ - $ - $ - $ 3,000 $ -
Cash dividends
declared per share $ .80 $ .60 $ .80 $ .60 $ .60
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Operating Results
Net income for the twelve months ended April 30, 1996 of $41,714,000 or
$4.18 per share was $18,546,000 or 80% higher than the prior year's net income
of $23,168,000 or $2.32 per share. Net income, sales, operating income and
income from securities transactions for the twelve months ended April 30, 1996
all set new record highs for the Company. Net earnings for the fiscal year
ended April 30, 1995 of $23,168,000 or $2.32 per share compared with net
earnings of $28,902,000 or $2.90 per share for fiscal year 1994. The decrease
in net earnings for fiscal 1995 from the fiscal 1994's level was primarily due
to a decline in Income from Securites Transactions of $7,047,000, including
losses of $4,980,000 related to the Company's strategy of realizing capital
losses which would to reduce income taxes. The $1,550,000 expended in support
of The Value Line Cash Fund during fiscal 1995 also contributed to the decrease.
Revenues of $87,127,000 for fiscal 1996 compare to revenues of $79,711,000
and $82,458,000 for fiscal year's 1995 and 1994, respectively. Subscription
revenues of $58,509,000 were 5% higher than revenues of $55,912,000 for fiscal
1995. Full term subscription levels to all products increased 23% from the
prior year's level while full term circulation increased 10% to The Value Line
Investment Survey. The increase in subscription levels was a result of
increased marketing including an advance renewal program in November 1995 that
was offered to The Value Line Investment Survey's subscribers in anticipation of
a 9% price increase that was effective February 1, 1996. The Value Line
Investment Survey - Expanded edition contributed in excess of $2,350,000 of
revenues during fiscal 1996, it's first year of circulation and revenues from
The Value Line Investment Survey increased by $2,316,000 during this same
period. These increases were partially offset by decreases in revenues from the
print version of Value Line Mutual Fund Survey. Subscription revenues of
$55,912,000 for the fiscal year ended April 30, 1995 decreased 3.3% from fiscal
1994. The decrease in publications revenues is primarily a result of the
decline in subscription levels for the Value Line Investment Survey due to the
uncertain financial market conditions that existed during the first three
quarters of fiscal 1995. Revenues derived from investment management fees and
services for the twelve months ended April 30, 1996 of $26,564,000 were
$3,382,000 or 15% higher than the level at April 30, 1995. The increase in
revenues resulted primarily from a 14% increase in the average annual net assets
under management in the Company's mutual funds. Assets in the Company's mutual
funds at April 30, 1996 increased 21% from the levels at April 30, 1995.
Investment management fees and services revenues of $23,182,000 for the fiscal
year ended April 30, 1995 decreased 4.3% from the fiscal 1994 level. The
decrease in fiscal 1995 was primarily a result of a 6.5% decline in the average
annual assets under management in the Value Line mutual funds during the fiscal
year. Mutual fund net assets under management at April 30, 1995 were
approximately equal to
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the net assets under management at April 30, 1994. Revenues for fiscal year
1996, 1995 and 1994 include proceeds of $2,054,000, $617,000 and $408,000,
respectively, from the settlement of a disputed securities transaction.
Expenses for the twelve months ended April 30, 1996 of $54,641,000 were 9%
above the prior year's level of $50,051,000. Advertising expenses of
$15,322,000 were $573,000 or 4% above the prior year's level. Advertising
expenses for The Value Line Investment Survey increased 37% while additional
marketing expenses of $1,355,000 were also incurred in fiscal 1996 for a variety
of new products. These increases were offset by a significant reduction in
advertising expenses for the print version of the Value Line Mutual Fund Survey
during the development of a new electronic version. Salary and employee benefit
expenses of $20,892,000 for fiscal 1996 were 10% higher than the prior year's
level of $18,935,000 as a result of general salary increases, the fulfillment of
vacant staff positions and an increase in the employee profit sharing plan from
12% in fiscal 1995 to 15% in fiscal 1996. Office and administration expenses of
$10,039,000 increased 16% from the prior year's level of $8,620,000. The
increase is attributed to additional professional fees related to potential
business expansion alternatives, a lawsuit in which the Company is the
plaintiff, various tax matters and conversion fees in connection with the
upgrade of the Company's fulfillment software. Relocation expenses also
increased as a result of a decision to consolidate the Company's fulfillment,
distribution and warehouse operations in the recently acquired facility. These
increases were partially offset by decreases resulting from amortization of a
deferred free rent credit and a decrease in software amortization related to a
decision during fiscal 1995 to replace Compupower's fulfillment software.
Expenses for the fiscal year ended April 30, 1995, exclusive of the
non-recurring expense of $1,550,000 were $47,884,000, a decrease of $1,702,000
or 3% over fiscal 1994's level of $49,586,000. Advertising expenses of
$14,749,000 for the twelve months ended April 30, 1995 decreased $3,596,000 from
expenses of $18,345,000 for the comparable period in fiscal 1994. The decrease
in advertising expenses resulted from management's decision to effectively
market products during improved financial market conditions. Salaries and
employee benefit expenses of $18,935,000 for the twelve months of fiscal 1995
were $1,662,000 above the prior level of $17,273,000 primarily as a result of
the additional staff in support of the Mutual Fund Survey and the cost of
replacement staff and recruiting fees at Compupower and the Mutual Fund
management and research divisions. Office and administration expenses of
$8,003,000 increased $838,000 or 12% from the prior year's level as a result of
a $445,000 increase in depreciation and amortization expenses affiliated with
the new office facility and the computer hardware upgrade, $315,000 of
accelerated amortization resulting from a decision to upgrade the fulfillment
software at Compupower and an increase in professional fees. These increases
were offset by a reduction in rent expenses of $767,000 or 34%.
Income from securities transactions for fiscal year 1996 of $35,898,000
increased $27,239,000 from the prior year's level of $8,659,000. The increase
in capital gains produced by the Company's trading portfolios of $12,440,000,
and from sales of equity and fixed income share holdings in the Value Line
mutual funds of $8,888,000, in
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connection with our annual portfolio realignment were the major contributors to
the additional income from securities transactions. Capital gains distributions
from the Company's mutual funds also increased $4,710,000 during fiscal 1996.
Income from securities transactions of $8,659,000 for the fiscal year ended
April 30, 1995 decreased by $7,047,000 or 45% from $15,706,000 at April 30,
1994. In addition to a $764,000 decrease in capital gains produced by the
Hedge, Tilt and Stem portfolios, the Company also incurred losses of $4,980,000
in connection with tax planning matters. Sales of mutual fund shares,
unrelated to the tax planning matters, have produced $326,000 of capital losses
during the 1995 fiscal year as compared to a $101,000 gain in fiscal year 1994.
The decline was largely the result of a decision to liquidate an investment in
one of the Company's mutual funds during the latter part of fiscal 1995 in order
to redeploy these assets in other investment vehicles.
Liquidity and Capital Resources
The Company has liquid resources which are used in its business totaling
$266,534,000 at April 30, 1996. In addition to $88,799,000 in working capital,
the Company has marketable securities with a market value of $177,735,000, that,
although classified as non-current assets are also readily marketable as the
need for capital arises. The Company has entered into agreements to sell and
repurchase U.S. Government Agency debt securities with a market value of
$39,681,000 at April 30, 1996. The repurchase obligations of $36,994,000 have
been entered into on a short term basis. The securities, currently available
for sale, mature during calendar year 1997 and are readily marketable should
management decide to liquidate the Company's investments and related
obligations. During June 1996, the Company sold approximately $10,000,000 of
these U.S. Government Agency securities and satisfied the related $9,100,000
repurchase obligation. The Company's cash position, including its investment in
The Value Line Cash Fund, has decreased $13,274,000 at April 30, 1996, primarily
as a result of the purchase of additional equity and fixed income shares in the
Value Line Mutual Funds and the purchase of a distribution facility during
January 1996.
Management believes that the Company's cash and other liquid asset
resources used in its business together with future cash flows from operations
will be sufficient to finance current and forecasted operations.
Management anticipates no significant borrowing requirements during fiscal
1997 other than the short term refinancing of the remaining repurchase
obligations.
15
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the registrant and its
subsidiaries are included as a part of this Form lO-K:
Page Numbers
Reports of independent accountants 23
Consolidated balance sheets--April 3O, 1996 and 1995 27
Consolidated statements of income and retained earnings
--years ended April 3O, 1996, 1995 and 1994 28
Consolidated statements of cash flows
--years ended April 3O, 1996, 1995 and 1994 29
Notes to the consolidated financial statements 30
Supplementary schedules 42
Quarterly Results (Unaudited):
(in thousands, except per share amounts)
Income Earnings
Total From Net Per
Revenues Operations Income Share
1996, by Quarter -
First............ $20,028 $ 7,549 $10,224 $1.02
Second........... 22,811 10,134 8,250 .83
Third............ 21,689 7,512 14,291 1.43
Fourth........... 22,599 7,291 8,949 .90
Total $87,127 $32,486 $41,714 $4.18
1995, by Quarter -
First............ $20,214 $ 5,090 $ 3,428 $ .34
Second........... 20,423 7,985 6,961 .70
Third............ 19,425 7,223 7,011 .70
Fourth........... 19,649 9,362 5,768 .58
Total $79,711 $29,660 $23,168 $2.32
1994, by Quarter -
First............ $19,615 $ 9,149 $ 8,370 $ .84
Second........... 20,079 8,712 8,139 .82
Third............ 21,636 7,503 8,992 .90
Fourth........... 21,128 7,100 3,401 .34
Total $82,458 $32,464 $28,902 $2.90
16
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements with the independent accountants on
accounting and financial disclosure matters.
Part III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, l996, except that the information
pertaining to Executive Officers is set forth in Part I herein under the caption
"Executive Officers of the Registrant."
Item 11. EXECUTIVE COMPENSATION.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
17
<PAGE>
Part IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
See Item 8.
2. Schedules
Schedule I - Marketable Securities.
Schedule XIII - Other Investments.
All other Schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
3. Exhibits
3.1 Articles of Incorporation of the Company, as amended
through April 17, 1983 are incorporated by reference to
the Registration Statement - Form S-1 of Value Line,
Inc. Part II, Item 16.(a) 3.1 filed with the Securities
and Exchange Commission on April 7, 1983.
3.2 Certificate of Amendment of Certificate of
Incorporation dated October 24, 1989.
10.8 Form of tax allocation arrangement between the Company
and AB&Co. incorporated by reference to the
Registration Statement - Form S-1 of Value Line, Inc.
Part II, Item 16.(a) 10.8 filed with the Securities and
Exchange Commission on April 7, 1983.
10.9 Form of Servicing and Reimbursement Agreement between
the Company and AB&Co., dated as of November 1, 1982
incorporated by reference to the Registration Statement
- Form S-1 of Value Line, Inc. Part II, Item 16.(a)
10.9 filed with the Securities and Exchange Commission
on April 7, 1983.
10.10 Value Line, Inc. Profit Sharing and Savings Plan as
amended and restated effective May 1, 1989, including
amendments through April 30, 1995.
10.13 Lease for the Company's premises at 220 East 42nd
Street, New York, N.Y. incorporated by reference to the
Annual Report on Form 10-K for the year ended April 30,
1994.
21 Subsidiaries of the Registrant.
18
<PAGE>
(b) Reports on Form 8-K.
A Form 8-K was filed on March 26, 1996 indicating the termination of
Price Waterhouse LLP (PW) as the Company's independent accountants on
March 25, 1996. On that same date, the Company engaged Horowitz &
Ullmann as its new independent accountants. The termination of the
engagement of PW and the selection of Horowitz & Ullmann were recom-
mended by the Audit Committee of the Board of Directors and approved
by the entire Board of Directors.
(c) Exhibits.
Subsidiaries of the Registrant, Exhibit 21 attached.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 1O-K for the
fiscal year ended April 3O, 1996, to be signed on its behalf by the undersigned,
thereunto duly authorized.
VALUE LINE, INC.
(Registrant)
By: /s/ Jean Bernhard Buttner
----------------------------------
Jean Bernhard Buttner
Chairman & Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
By: /s/ Jean Bernhard Buttner
----------------------------------
Jean Bernhard Buttner
Principal Executive Officer
By: /s/ Stephen R. Anastasio
----------------------------------
Stephen R. Anastasio
Principal Financial
and Accounting Officer
Dated:
20
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 1O-K for the
fiscal year ended April 3O, 1996, to be signed on its behalf by the undersigned
as Directors of the Registrant.
s/Jean Bernhard Buttner s/William S. Kanaga
Jean Bernhard Buttner William S. Kanaga
s/Harold Bernard, Jr. s/Howard A. Brecher
Harold Bernard, Jr. Howard A. Brecher
s/W. Scott Thomas s/Samuel Eisenstadt
W. Scott Thomas Samuel Eisenstadt
s/David T. Henigson
David T. Henigson
Dated:
21
<PAGE>
LETTERHEAD
Report of Independent Accountants
To the Board of Directors
and Shareholders of
Value Line, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statement of income and retained earnings and of cash flows present
fairly, in all material respects, the financial position of Value Line, Inc.
and its subsidiaries at April 30, 1996 and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. The financial statements of Value
Line, Inc., and its subsidiaries as of April 30, 1995 and 1994 were audited by
other auditors whose report dated June 26, 1995 expressed an unqualified opinion
on those statements.
We conducted our audit of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
Our audits of the consolidated financial statements referred to above also
included an audit of the Financial Statement Schedules listed in Item 14 (a)
of this Form 10-K. In our opinion, these Financial Statement Schedules
present fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated statements.
/s/ Horowitz and Ullman, P.C.
HOROWITZ & ULLMANN, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
New York, NY
June 28, 1996
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Value Line, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and retained earnings and of cash flows
present fairly, in all material respects, the financial position of Value
Line, Inc. and its subsidiaries at April 30, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended April 30, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits of the consolidated financial statements referred to above also
included an audit of the Financial Statement Schedules listed in Item 14(a) of
this Form 10-K. In our opinion, these Financial Statement Schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
June 26, 1995
<PAGE>
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the registration
statement on Form S-8 (No. 2-90593) of our report dated June 28, 1996 relating
to the consolidated financial statements of Value Line, Inc. and subsidiaries
for the year ended April 30, 1996 which appears on page 23 of this Form 10-K.
We also consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appear in this Form 10-K.
/s/Horowitz & Ullmann, P.C.
HOROWITZ & ULLMANN, P.C.
Certified Public Accountants
New York, NY
July 3, 1996
25
<PAGE>
Value Line, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
Apr. 30, Apr. 30,
Assets 1996 1995
-------- --------
Current Assets:
Cash and cash equivalents (including short term
investments of $31,116 and $43,608, respectively) $31,752 $45,026
Trading securities 64,314 48,187
Short term securities available for sale 39,681 39,099
Accounts receivable, net of allowance for doubtful
accounts of $528 and $350, respectively 2,997 3,348
Receivable from affiliates 1,965 1,641
Prepaid expenses and other current assets 2,872 1,416
-------- --------
Total current assets 143,581 138,717
Long term securities available for sale 177,735 118,013
Property and equipment, net 12,120 7,922
Goodwill 390 346
-------- --------
Total assets $333,826 $264,998
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $8,433 $6,358
Securities sold under agreements to repurchase 36,994 36,994
Accrued salaries 1,808 1,466
Dividends and interest payable 2,058 534
Accrued taxes payable 5,489 3,054
-------- --------
Total current liabilities 54,782 48,406
Unearned revenue 42,993 36,789
Deferred charges 1,530 1,808
Deferred income taxes 13,255 4,806
Shareholders' Equity:
Common stock, $.10 par value; authorized 30,000,000
shares; issued 10,000,000 shares 1,000 1,000
Additional paid-in capital 944 940
Retained earnings 196,834 163,101
Treasury stock, at cost (23,025 shares on April 30,
1996, and 24,650 on April 30, 1995) (443) (474)
Unrealized gains on securities available for sale,
net of taxes 22,931 8,622
-------- --------
Total shareholders' equity 221,266 173,189
-------- --------
Total liabilities and shareholders' equity $333,826 $264,998
======== ========
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
Value Line, Inc.
Consolidated Statements of Income and Retained Earnings
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Years ended April 30,
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Investment periodicals and related publications $58,509 $55,912 $57,830
Investment management fees & services 26,564 23,182 24,220
Settlement of disputed securities transactions 2,054 617 408
-------- -------- --------
Total revenues 87,127 79,711 82,458
-------- -------- --------
Expenses:
Advertising and promotion 15,322 14,749 18,345
Salaries and employee benefits 20,892 18,935 17,273
Printing, paper and distribution 8,388 6,197 6,803
Office and administration 10,039 8,620 7,573
Mutual fund support expenses - 1,550 -
-------- -------- --------
Total expenses 54,641 50,051 49,994
-------- -------- --------
Income from operations 32,486 29,660 32,464
Income from securities transactions, net 35,898 8,659 15,706
-------- -------- --------
Income before income taxes 68,384 38,319 48,170
Provision for income taxes 26,670 15,151 19,268
-------- -------- --------
Net income $41,714 $23,168 $28,902
Retained earnings, at beginning of year 163,101 145,918 124,995
Dividends declared (7,981) (5,985) (7,979)
-------- -------- --------
Retained earnings, at end of year $196,834 $163,101 $145,918
======== ======== ========
Earnings per share $4.18 $2.32 $2.90
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
Value Line, Inc.
Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Years ended April 30,
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $41,714 $23,168 $28,902
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,288 1,293 866
Accretion of discount (582) (484) ---
(Gains)/losses on sale of trading securities
and securities held for sale (11,631) 4,077 (6,851)
Unrealized (gains)/losses on trading securities (9,030) (3,445) 1,060
Loss on write-down of equipment (166) 166 ---
Deferred income taxes 4,205 653 (510)
Changes in assets and liabilities:
Increase/(decrease) in unearned revenue 6,204 1,260 (56)
(Increase)/decrease in deferred charges (278) 1,048 1,121
Increase/(decrease) in accounts payable
and accrued expenses 727 (1,676) 642
Increase in accrued salaries 342 213 77
Increase/(decrease) in interest payable (471) 534 (10)
Increase/(decrease) in accrued taxes payable (1,027) 955 (366)
(Increase)/decrease in prepaid expenses and
other current assets (1,456) 388 (529)
(Increase)/decrease in accounts receivable 555 (735) (1,907)
(Increase)/decrease in receivable from affiliates (324) (190) 32
-------- -------- --------
Total adjustments (11,644) 4,057 (6,431)
-------- -------- --------
Net cash provided by operations 30,070 27,225 22,471
-------- -------- --------
Cash flows from investing activities:
Proceeds from sales of securities 18,085 46,945 6,218
Purchase of securities (52,211) (35,374) (30,382)
Proceeds from sale of trading securities 64,333 74,964 90,761
Purchase of trading securities (61,574) (70,708) (77,908)
Acquisition of property, and equipment, net (6,026) (1,376) (5,838)
-------- -------- --------
Net cash provided by/(used in) investing activities (37,393) 14,451 (17,149)
-------- -------- --------
Cash flows from financing activities:
Proceeds from sale of treasury stock 35 --- 72
Dividends paid (5,986) (7,980) (7,480)
Loan repayment --- (3,000) ---
-------- -------- --------
Net cash (used in) financing activities (5,951) (10,980) (7,408)
-------- -------- --------
Net increase/(decrease) in cash and cash equivalents (13,274) 30,696 (2,086)
Cash and cash equivalents at beginning of period 45,026 14,330 16,416
-------- -------- --------
Cash and cash equivalents at end of period $31,752 $45,026 $14,330
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
Value Line, Inc.
Notes to Consolidated Financial Statements
Note 1-Organization and Summary of Significant Accounting Policies:
Value Line, Inc. (the "Company") is incorporated in New York State and carries
on the investment periodicals and related publications and investment management
activities formerly performed by Arnold Bernhard & Co., Inc. (the "Parent")
which owns approximately 80% of the issued and outstanding common stock of the
Company.
Principles of consolidation: The consolidated financial statements include
the accounts of the Company and all of its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Revenue recognition: Subscription revenues are recognized ratably over the
terms of the subscriptions which range from three months to three years.
Accordingly, the amount of subscription fees to be earned by servicing
subscriptions after the date of the balance sheet is shown as unearned revenue.
The unearned revenue shown on the balance sheet is a noncurrent deferred credit.
This classification recognizes that the fulfillment of this
commitment will require the use of significantly less current assets than the
amount of the unearned revenues and, accordingly, combining it with current
liabilities would significantly understate the liquidity position of the
Company.
Investment management fees are recorded as revenue as the related services are
performed.
Securities Sold Under Agreements to Repurchase:
The Company has entered into agreements to sell and repurchase U.S. Government
Agency debt securities. The securities are recorded at market value and are
included in "Short-term securities available for sale" on the Consolidated
Balance Sheets.
Valuation of Securities:
Effective May 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"). As a result of adopting SFAS 115, the
Company changed the method by which it values its long-term securities
portfolio, which consists of shares of the Value Line Mutual Funds, and
short-term securities portfolio, which the Company classifies as available for
sale, from the lower of aggregate cost or market to market value.Unrealized
gains and losses on these securities are reported, net of applicable taxes, as
a separate component of Shareholders' Equity. Realized gains and losses on sales
of the securities are recorded in earnings on trade date and are determined on
the identified cost method. SFAS 115 cannot be retroactively applied to the
financial statements of periods prior to May 1, 1994.
<PAGE>
Trading securities, which consist of securities held by Value Line Securities,
Inc., the Company's broker-dealer subsidiary, and certain adjustable rate
preferred shares held by the Company, are valued at market with unrealized gains
and losses included in earnings.
Goodwill: Goodwill represents the excess of the purchase price over the fair
value of net assets acquired and is being amortized over a period of 40 years.
Earnings per share: Earnings per share are based on the weighted average
number of shares of common stock and common stock equivalents outstanding during
each year.
Cash and Cash Equivalents: For purposes of the Consolidated Statements of
Cash Flows, the Company considers all cash held at banks and short term liquid
investments with an original maturity of less than three months to be cash and
cash equivalents. As of April 30, 1996 and 1995, cash equivalents included
$25,238,000 and $41,503,000, respectively, invested in the Value Line money
market funds.
Reclassification: Certain prior year amounts disclosed in the Consolidated
Financial Statements and Notes thereto have been reclassified to conform to
current year presentation.
Note 2-Supplementary Cash Flow Information:
Cash payments for income taxes were $24,056,000, $12,974,000 and $20,171,000,
in 1996, 1995 and 1994, respectively. Interest payments of $2,618,000,
$1,315,000 and $183,000 were made in 1996, 1995, and 1994, respectively.
Note 3-Related Party Transactions:
The Company acts as investment adviser and manager for sixteen open-end
investment companies known as the Value Line Family of Funds (see Note 4). The
Company earns investment management fees calculated based upon the average daily
net asset values of the respective funds. The Company also earns brokerage
commission income, net of clearing fees, on securities transactions executed by
Value Line Securities, Inc. on behalf of the funds and other advisory clients of
the Company that are cleared on a fully disclosed basis through non-affiliated
brokers. For the years ended April 30, 1996, 1995 and 1994, investment
management fees and brokerage commission income, net of clearing fees, amounted
to $19,686,000, $17,782,000 and $19,098,000, respectively. The related
receivables from the funds for management advisory fees included in Receivable
from affiliates in the Consolidated Balance Sheets were $1,631,000 and
$1,352,000, at April 30, 1995 and 1994, respectively.
<PAGE>
For the years ended April 30, 1996, 1995 and 1994, the Company was reimbursed
$438,000, $414,000 and $454,000, respectively, for payments it made on behalf of
and services it provided to the Parent. At April 30, 1996 and 1995, Receivable
from affiliates included a receivable from the Parent of $89,000 and $257,000,
respectively. For the years ended April 30, 1996, 1995 and 1994, the Company
made federal income tax payments to the Parent amounting to $19,952,000,
$10,225,000 and $16,020,000, respectively. At April 30, 1996 and 1995, prepaid
expenses and other current assets included a receivable of $563,000 and
accrued taxes payable included a payable of $438,000 to the Parent,
respectively. These data are in accordance with the tax sharing arrangement
described in Note 6.
Note 4-Investments:
Trading Securities:
Securities held by Value Line Securities, Inc. had an aggregate cost of
$48,066,000 and $40,767,000 and a market value of $64,314,000 and $48,187,000 at
April 30, 1996 and April 30, 1995, respectively.
Short-Term Securities Available for Sale:
Short-term securities available for sale consists of Value Line, Inc.'s
holdings in the following securities:
Federal National Mortgage Association (FNMA), floating rate notes due
August 5, 1997; par value $30,325,000.
Federal Farm Credit Bank (FFCB), floating rate notes due February 12,
1997; par value $10,000,000.
The market value of the Company's holdings in the FNMA and FFCB, which
approximates cost, at April 30, 1996 was $29,831,000 and $9,850,000 and at April
30, 1995 was $29,438,000 and $9,661,000, respectively. These notes were
purchased at a discount from their respective face values. The accretion of this
discount has been included as an addition to the cost of the securities and
reflected as interest income in the Consolidated Statements of Income and
Retained Earnings.
<PAGE>
Long-Term Securities Available for Sale:
The aggregate cost of the long-term securities was $142,456,000 and
$104,749,000 and the market value was $177,734,000 and $118,013,000 at April 30,
1996 and April 30, 1995, respectively. The change in gross unrealized gains on
these securities of $22,014,000 and $13,264,000, net of the change in deferred
taxes of $7,705,000 and $4,642,000, were included in shareholders' equity at
April 30, 1996 and 1995, respectively. Realized gains from the sales of these
securities were $3,581,000 and realized losses were $5,306,000 during fiscal
years 1996 and 1995, respectively. The proceeds received from sales of these
securities during the fiscal year ended April 30, 1996 were $18,085,000 and
$46,934,000 during the fiscal year ended April 30, 1995, respectively. At April
30, 1994, these securities were recorded at the lower of aggregate cost or
market.
For the years ended April 30, 1996, 1995 and 1994, Income from securities
transactions, net consisted of $5,275,000, $4,938,000 and $5,094,000 of dividend
income; $20,814,000, $396,000 and $11,789,000 of net realized capital gains;
$2,758,000, $1,912,000 and $56,000 of interest income; and $2,148,000,
$1,865,000 and $183,000 of related interest expense, respectively. Net income
from securities transactions also included $9,197,000 and $3,279,000 of
unrealized gains for the year's ended April 30, 1996 and 1995, respectively and
$1,060,000 of unrealized losses on marketable securities for the year ended
April 30, 1994.
Note 5-Property and Equipment:
Property and equipment are carried at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives of the
assets, or in the case of leasehold improvements, over the remaining terms of
the leases. For income tax purposes, depreciation of furniture and equipment is
computed using accelerated methods and buildings and leasehold improvements are
depreciated over prescribed, extended tax lives.
<PAGE>
Property and equipment consisted of the following: April 30,
1996 1995
-------------------
(in thousands)
Land $785 $59
Building and leasehold improvements 6,695 3,442
Furniture and equipment 11,020 9,789
-------------------
18,500 13,290
Accumulated depreciation and amortization (6,380) (5,368)
-------------------
$12,120 $7,922
-------------------
-------------------
During January 1996, the Company purchased for cash an approximately 85,000
square foot warehouse facility for $4,100,000 under a newly formed subsidiary,
Value Line Distribution Center, Inc. The new facility will house the
distribution operations for the various Company publications and the fulfillment
operations of the Compupower Corporation. The remaining building capacity will
provide warehouse storage, a disaster recovery site and will provide for future
business expansion.
Note 6-Federal, State and Local Income Taxes:
The Company computes its tax in accordance with the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
<PAGE>
The provision for income taxes includes the following:
Years ended April 30,
1996 1995 1994
------------------------------------
(in thousands)
Current:
Federal $18,612 $10,733 $15,676
State and local 3,852 3,765 4,102
------------------------------------
22,464 14,498 19,778
Deferred:
Federal 4,034 795 (523)
State and local 172 (142) 13
------------------------------------
4,206 653 (510)
------------------------------------
$26,670 $15,151 $19,268
------------------------------------
Deferred taxes are provided for temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities. The
tax effect of temporary differences giving rise to the Company's deferred tax
(liability)/asset are as follows:
Years ended April 30,
1996 1995 1994
----------------------------------
(in thousands)
Unrealized gains on securities
held for sale ($12,347) ($4,642) -
Unrealized gains on trading securities (5,661) (2,489) (1,279)
Relocation reserve 220 263 675
Depreciation (572) (363) (393)
Deferred charges 959 770 267
Accretion of securities under
repurchase agreements (319) - -
Other, net 42 694 258
-----------------------------------
($17,678) ($5,767) ($472)
-----------------------------------
-----------------------------------
<PAGE>
Included in accrued taxes payable in current liabilities in the Consolidated
Balance Sheets are deferred federal tax liabilities of $4,664,000 and $1,373,000
at April 30, 1996 and 1995, respectively. Also included in accrued taxes payable
are deferred state and local tax benefits of $241,000 and $413,000 at April 30,
1996 and 1995, respectively.
The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory income tax rate to pretax
income as a result of the following:
Years ended April 30,
1996 1995 1994
----------------------------
(in thousands)
Tax expense at the U.S. statutory rate $24,016 $13,458 $16,917
Increase (decrease) in tax expense from:
State and local income taxes, net of
federal income tax benefit 2,611 2,351 2,670
Effect of tax exempt income and dividend
deductions (586) (684) (768)
Other, net 629 26 449
------------------------------
$26,670 $15,151 $19,268
------------------------------
------------------------------
The Company is included in the consolidated federal income tax return of the
Parent. The Company has a tax sharing arrangement which requires it to make tax
payments to the Parent equal to the Company's liability as if it filed a
separate return.
Note 7-Employees' Profit Sharing and Savings Plan:
Substantially all employees of the Company and its subsidiaries are members of
the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general,
this is a qualified, contributory plan which provides for a discretionary annual
Company contribution which is determined by a formula based upon the salaries of
eligible employees and the amount of consolidated net operating income as
defined in the Plan. Plan expense, included in salaries and employee benefits
in the Consolidated Statements of Income and Retained Earnings, for the years
ended April 30, 1996, 1995 and 1994 was $1,331,000, $968,000 and $1,470,000,
respectively.
<PAGE>
Note 8-Incentive Stock Options:
On April 17, 1993, the Incentive Stock Option Plan expired. On the date of
expiration, 22,550 options available for grant were cancelled. Information on
the 1983 Incentive Stock Option Plan for the three years ended April 30, 1996,
is as follows:
Number of Option
Shares Prices
--------- ----------
Outstanding at May 1, 1993 10,200 $17.00 to $29.75
Granted -
Exercised (3,950) $17.00 to $20.00
Cancelled -
----------
Outstanding at April 30, 1994 6,250 $17.50 to $29.75
Granted -
Exercised -
Cancelled -
----------
Outstanding at April 30, 1995 6,250 17.50 to $29.75
Granted -
Exercised (1,625) $17.50 to $29.75
Cancelled -
---------
Outstanding at April 30, 1996 4,625 17.50 to $29.75
---------
---------
Options outstanding at April 30, 1996 expire at various dates through March
2003. At April 30, 1996, 3,375 of the outstanding options were exercisable. Of
the common stock held in treasury at April 30, 1995, 4,625 shares were held for
exercise of stock options.
Note 9-Treasury Stock:
Treasury stock, at cost, for the three years ended April 30, 1996, consists of
the following:
Shares Amount
-------- -------------
(in thousands)
Balance May 1, 1993 28,600 $550
Exercise of incentive stock options (3,950) (76)
-------- ------------
Balance April 30, 1994 24,650 474
Exercise of incentive stock options - -
-------- ------------
Balance April 30, 1995 24,650 474
Exercise of incentive stock options (1,625) (31)
-------- ------------
Balance April 30, 1996 23,025 $443
-------- ------------
-------- ------------
<PAGE>
The Company's Board of Directors authorized the purchase of up to 1,000,000
shares of the Company's common stock from time to time in negotiated
transactions.
Note 10-Securities Sold under Agreements to Repurchase:
On June 28, 1994, the Company entered into short-term agreements to repurchase
certain securities sold. These agreements were entered into to repurchase the
Federal National Mortgage Association Floating Rate Notes due August 5, 1997
(FNMA), par value $30,325,000, and Federal Farm Credit Bank Floating Rate Notes
due February 12, 1997 (FFCB), par value $10,000,000, stated in Note 4. The
outstanding balance of the obligations under the repurchase agreements in the
aggregate amount of $36,994,000 accrue interest at a stated annual interest rate
of 5.3% and mature on May 6, 1996 ($27,899,000) with respect to the
FNMA and May 12, 1996 ($9,095,000) for the obligation to repurchase the FFCB
securities. During June 1996, the Company sold the FFCB securities and satisfied
its obligation under the repurchase agreement. The Company intends to refinance
the FNMA obligation on a short term basis.
Note 11-Lease Commitments:
On June 4, 1993, the Company entered into a 15 year lease agreement that
provides new primary office space, replacing the previous lease that expired
during the second quarter of fiscal year 1994. The lease includes free rental
periods as well as scheduled base rent escalations over the term of the lease.
The total amount of the base rent payments is being charged to expense on the
straight-line method over the term of the lease. The Company has recorded a
Deferred charge on its Consolidated Balance Sheets to reflect the
excess of annual rental expense over cash payments since inception of the lease.
Future minimum payments, exclusive of forecasted increases in real estate
taxes and wage escalations, under operating leases for office space, with
remaining terms of one year or more, are as follows:
Year ended April 30: (in thousands)
1997 $1,536
1998 1,536
1999 1,784
2000 1,827
2001 1,827
Thereafter 13,195
---------
$21,705
<PAGE>
Rental expense for the years ended April 30, 1996, 1995 and 1994 under
operating leases covering office space was $1,402,000, $1,481,000 and $2,248,000
respectively.
Note 12-Business Segments:
The Company operates in two business segments: Investment Periodicals and
related Publications, and Investment Management. Identifiable assets consisted
of:
April 30,
1996 1995
---------------------------------
Identifiable assets: (in thousands)
Investment periodicals and
related publications $15,902 $11,788
Investment management 271,088 208,930
Corporate assets 46,836 44,280
--------- ----------
Total $333,826 $264,998
---------- ----------
---------- ----------
Revenues and income from operations were as follows:
Years ended April 30,
1996 1995 1994
------------------------------
Revenues: (in thousands)
Investment periodicals and
related publications $58,649 $56,041 $58,005
Intersegment revenues (140) (129) (175)
---------------------------------
58,509 55,912 57,830
Investment management 26,564 23,182 24,220
Settlement of disputed securities trans. 2,054 617 408
---------------------------------
Consolidated revenues $87,127 $79,711 $82,458
Income from operations:
Investment periodicals and
related publications $15,492 $15,396 $17,285
Investment management 14,940 13,647 14,771
Settlement of disputed securities trans. 2,054 617 408
--------------------------------
Consolidated income from operations $32,486 $29,660 $32,464
--------------------------------
--------------------------------
<PAGE>
Note 13-Net Capital:
The Company's wholly owned subsidiary, Value Line Securities, Inc. is subject to
the net capital provisions of Rule 15c3-1 under the Securities Exchange Act of
1934, which requires the maintenance of minimum net capital of $100,000 and
requires that aggregate indebtedness, as defined, shall not exceed fifteen times
net capital, as defined. Additionally, dividends may only be declared if
aggregate indebtedness is less than twelve times net capital.
At April 30, 1996, Value Line Securities', Inc. net capital, as defined, of
$50,216,022 exceeded required net capital by $49,241,172 and the ratio of
aggregate indebtedness to net capital was .29 to 1.
Note 14-Financial Instruments with Off-Balance-Sheet Risk and
Concentration of Credit Risk:
The Company executes, as agent, securities transactions on behalf of the Value
Line mutual funds. If either the mutual fund or a counterparty fail to perform,
the Company may be required to discharge the obligations of the nonperforming
party. In such circumstances, the Company may sustain a loss if the market
value of the security is different from the contract value of the transaction.
In the normal course of business, the Company enters into contractual
commitments, principally financial futures contracts for securities indices.
Financial futures contracts provide for the delayed delivery of financial
instruments for which the seller agrees to make delivery at a specified future
date, at a specified price or yield. The contract or notional amount of these
contracts reflects the extent of involvement the Company has in these contracts.
At April 30, 1996, the underlying notional value of such commitments was
$11,787,300. Risk arises from the potential inability of counterparties
to meet the terms of their contracts and from movements in securities values.
The Company limits its credit risk associated with such instruments by entering
exclusively into exchange traded futures contracts.
No single customer accounted for a significant portion of the Company's sales
in 1996, 1995 or 1994, nor accounts receivable for 1996 or 1995.
<PAGE>
Note 15-Estimated Fair Value of Financial and Derivative Instruments:
Statement of Accounting Standards No. 119, "Disclosure About Derivative
Financial Instruments and Fair Value of Financial Instruments," requires
disclosure of information regarding derivative instruments, which include
financial index futures contracts.
Derivative instruments held for trading purposes are reflected at fair value
at April 30, 1996. The fair value and the average fair value of derivative
instruments at April 30, 1996 and for the year then ended consists of
liabilities of $128,600 and $138,957, respectively.
Net trading gains related to equity securities aggregated $18,622,301 for the
year ended April 30, 1996. Net trading losses related to derivative financial
instruments amounted to $1,525,168 for the year ended April 30, 1996.
Note 16-Mutual Fund Support Expenses:
On June 28, 1994, the Company purchased, as part of its investment management
operations for which it receives fee income, U.S. Government Agency notes with a
market value as of that date of $38,615,000 from the Value Line Cash Fund, for
which it is the investment adviser. In order to maintain a $1.00 per share net
asset value, as part of the same transaction, the Company reimbursed the Value
Line Cash Fund $1,550,000 for losses the Fund incurred on the sale which the
Company may recoup in the future.
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 AAR CORP $82,198 $81,500
2,600 ABR INFORMATION SVCS INC 123,955 162,500
3,000 ABT BLDG PRODS CORP 63,750 61,500
4,000 ACXIOM CORP 113,000 110,000
4,000 ADAC LABS 56,700 65,500
2,600 ADAPTEC INC 154,375 149,500
5,050 ADVANTA CORP 125,408 282,169
5,500 AIR EXPRESS INTL CORP 105,875 154,000
2,000 ALLIED GROUP INC 76,000 71,750
3,000 ALLIED PRODS CORP DEL 47,430 79,125
8,400 ALLIED SIGNAL INC 357,932 488,250
1,800 ALLSTATE CORP 70,254 69,975
10,200 AMERICAN BANKERS INS GROUP INC 291,925 402,900
6,100 AMERICAN EXPRESS CO 234,054 295,850
4,200 AMERICAN INTL GROUP INC 226,639 383,775
6,000 AMERICAN TRAVELLERS CORP 120,000 117,000
7,100 AMGEN INC 341,700 408,250
5,200 APTARGROUP INC 192,479 195,650
6,100 AUSPEX SYS INC 78,538 118,187
5,000 AUTOMATIC DATA PROCESSING INC 140,813 194,375
2,000 AVERY DENNISON CORP 107,536 114,000
13,100 AVONDALE INDS INC 182,200 250,537
10,000 BAKER HUGHES INC 269,170 317,500
11,600 BALLY ENTERTAINMENT GROUP 109,921 242,150
5,000 BECTON DICKINSON + CO 270,311 403,125
5,000 BED BATH + BEYOND INC 179,125 295,312
4,000 BEL FUSE INC 64,700 74,500
10,000 BENTON OIL + GAS CO 147,000 175,000
8,000 BLOUNT INTL INC 165,653 248,000
3,000 BMC SOFTWARE INC 160,000 182,625
5,900 BOSTON SCIENTIFIC CORP 167,308 254,437
6,600 CABOT CORP 151,337 176,550
10,000 CALENERGY INC 251,748 260,000
300 CALLAWAY GOLF CO 7,359 8,025
3,600 CAMPBELL SOUP CO 147,583 225,000
5,000 CARDINAL HEALTH INC 288,425 313,750
4,000 CARNIVAL CORP 113,740 116,000
2,400 CASCADE COMMUNICATIONS CORP 142,280 240,600
5,900 CASEYS GEN STORES INC 138,827 127,219
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
11,800 CATO CORP NEW 109,150 112,100
24,300 CENTERIOR ENERGY CORP 271,067 167,062
4,000 CERIDIAN CORP 131,120 191,000
3,000 CHESAPEAKE ENERGY CORP 128,262 212,250
4,000 CHRONIMED INC 82,200 99,500
5,200 CINCINNATI BELL INC 127,802 256,100
4,200 CNA FINL CORP 409,101 408,450
400 COASTAL CORP 11,412 15,850
6,500 COCA COLA CO 253,898 529,750
2,000 COGNOS INC 115,600 135,500
6,000 COHERENT INC 102,750 321,750
12,100 COMPUTER ASSOC INTL INC 578,892 887,837
6,600 COMPUTER DATA SYS INC 95,743 117,150
2,000 COMPUTER SCIENCES CORP 80,165 148,000
6,150 CONMED CORP 100,721 182,962
8,600 CONSECO INC 277,146 313,900
4,800 CRANE CO 167,388 199,200
1,800 CSX CORP 93,033 92,250
4,000 CTS CORP 106,782 167,000
7,000 CURATIVE TECHNOLOGIES INC 138,475 156,625
23,800 DANAHER CORP 554,790 937,125
5,000 DANKA BUS SYS 217,375 240,000
7,000 DATA GEN CORP 89,470 107,625
2,200 DEERE + CO 60,064 85,525
18,000 DIGITAL SYS INTL INC 270,402 355,500
10,700 DIONEX CORP 248,275 391,888
1,600 DISNEY WALT CO 88,048 99,200
9,000 DOVER CORP 292,195 463,500
3,300 DU PONT E I DE NEMOURS + CO 192,174 265,237
4,000 DURIRON INC 101,000 105,000
8,500 DYNATECH CORP 177,000 218,875
6,000 EAGLE HARDWARE AND GRODEN 68,250 60,750
8,000 ECKERD CORP DEL 330,896 382,000
17,000 EQUIFAX INC 279,123 414,740
10,800 FEDERAL NATL MTG ASSN 296,744 330,750
6,600 FIFTH THIRD BANCORP 233,125 364,650
3,000 FINOVA GROUP INC 137,055 166,500
2,900 FISERV INC 71,150 88,450
7,800 FLUOR CORP 398,859 515,775
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 FOSTER WHEELER CORP 165,908 185,000
14,500 GAP INC 364,123 436,812
12,000 GENERAL COMMUNICATION INC 96,228 93,000
6,000 GENERAL MTRS CORP 258,580 325,500
7,000 GENERAL NUTRITION COS INC 132,938 136,500
1,500 GENETICS INST INC 108,750 106,500
12,000 GENRAD INC 152,720 181,500
10,800 GLEASON CORP 437,724 425,250
2,200 GLENAYRE TECHNOLOGIES INC 102,850 102,850
19,000 GLOBAL MARINE INC 103,075 216,125
6,800 GOODRICH B F CO 204,527 270,300
2,600 GREAT ATLANTIC + PAC TEA INC 91,806 90,675
15,400 HALLIBURTON CO 547,992 883,575
2,400 HARLEY DAVIDSON INC 103,481 105,900
3,000 HBO + CO 111,900 356,250
600 HEALTHSOUTH CORP 22,368 22,275
11,000 HENRY JACK + ASSOC INC 289,718 345,125
5,000 HERBALIFE INTL INC 65,000 65,000
13,000 HERTIAGE MEDIA CORP 212,244 498,875
4,200 HEWLETT PACKARD CO 401,976 444,675
5,000 HFS INC 137,213 256,875
2,200 HILTON HOTELS CORP 211,344 232,100
4,000 HOLOGIC INC 113,000 118,000
2,400 HOME DEPOT INC 91,082 113,700
4,100 HOUSEHOLD INTL INC 197,071 283,413
2,600 IDEXX LABS INC 118,950 115,700
4,600 ILLINOIS TOOL WKS INC 189,414 309,350
5,000 INPUT/OUTPUT INC 141,177 173,750
4,000 INTEL CORP 271,500 271,000
4,800 INTERNATIONAL BUSINESS MACHS 390,244 516,000
4,000 INTERVOICE INC 107,000 112,000
29,500 INVACARE CORP 638,991 767,000
8,000 JABIL CIRCUIT INC 86,400 94,000
21,700 JLG INDS INC 307,163 1,182,650
12,103 JOHNSON + JOHNSON 488,821 1,119,527
4,000 JONES APPAREL GROUP INC 148,448 205,500
6,000 KROGER CO 233,610 246,750
4,100 LA QUINTA INNS INC 100,591 119,925
2,000 LCS INDS COM NEW 41,100 52,500
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,000 LEADER FINL CORP 107,250 132,000
5,200 LIZ CLAIBORNE 148,712 189,150
2,200 LOEWS CORP 139,178 167,750
3,800 LOGICON INC 110,257 113,050
12,000 LONGHORN STEAKS INC 294,600 325,500
5,000 LORAL SPACE + COMMUNICATIONS 37,338 71,875
3,000 LSI INDS INC 50,400 55,500
800 LUXOTTICA GROUP S P A 61,124 64,400
13,500 MANPOWER INC WIS 379,805 499,500
4,000 MARRIOT INTL INC 186,356 195,000
4,000 MASLAND CORP 78,500 81,500
8,125 MATTEL INC 132,282 211,250
10,100 MBNA CORP 182,290 286,587
11,200 MCDONALDS CORP 327,793 536,200
3,600 MCDONNELL DOUGLAS CORP 75,972 347,400
7,600 MDL INFORMATION SYS INC 131,600 210,900
3,100 MEDIC COMPUTER SYS INC 140,430 289,850
11,100 MEDTRONIC INC 358,451 589,687
2,000 MERCANTILE STORES INC 118,620 124,750
6,900 MERCK + CO INC 301,907 417,450
9,200 MERIDIAN DATA INC 146,860 159,850
3,600 MGIC INVT CORP WIS 185,968 195,300
12,000 MICROGRAFX INC 197,250 192,000
600 MICROSOFT CORP 32,625 68,025
3,000 MILLER HERMAN INC 89,625 91,875
6,900 MIRAGE RESORTS INC 164,677 361,387
19,300 MONEY STORE INC 452,276 487,325
10,000 MTS SYS CORP 169,500 210,000
6,000 MYLEX CORP 127,386 146,250
13,950 NATIONAL DATA CORP 249,731 491,737
20,000 NATIONAL ED CORP 154,900 297,500
5,100 NATIONSBANK CORP 261,303 406,725
3,000 NATURES SUNSHINE PRODS INC 69,000 75,000
4,000 NCI BLDG SYS INC 94,200 145,000
4,448 NELLCOR PURITAN BENNETT INC 132,050 217,952
8,500 NIKE INC 432,930 743,750
6,000 NOBLE DRILLING CORP 58,128 90,000
5,100 NORWEST CORP 113,668 184,238
14,300 OAKWOOD HOMES CORP 549,135 638,138
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 OEC MED SYS INC 51,240 46,000
9,000 OLYMPIC FINL LTD 183,665 200,250
3,400 OMNICARE INC 178,928 204,000
12,000 OMNICOM GROUP 302,610 520,500
4,500 ORACLE SYS CORP 146,250 151,875
9,000 ORCHARD SUPPLY HARDWARE 186,242 239,625
20,000 ORNDA HEALTHCORP 352,500 550,000
4,800 OXFORD HEALTH PLANS INC 183,100 242,400
2,000 PAIRGAIN TECHNOLOGIES INC 111,000 191,000
16,300 PARK ELECTROCHEMICAL CORP 524,126 407,500
8,000 PARTNERRE LTD 240,000 226,000
4,000 PENNCORP FINL GROUP INC 105,740 122,500
2,000 PEOPLESOFT INC 92,000 126,000
11,100 PEPSICO INC 475,359 704,850
3,300 PETSMART INC 122,925 146,437
12,800 PFIZER INC 557,234 881,600
8,100 PHILIP MORRIS COS INC 731,240 730,013
4,400 PHP HEALTHCARE CORP 137,489 134,200
20,000 PHYSICIANS COMPUTER NETWORK IN 187,750 225,000
12,500 PRAXAIR INC 259,897 482,812
11,000 PRICE COSTCO INC 190,625 209,000
4,100 PRIDE PETE SVCS INC 36,387 67,137
5,500 PRIMARK CORP 166,347 195,250
14,000 PROTOCOL SYS INC 208,134 273,000
18,200 QUICK + REILLY GROUP INC 474,558 555,100
4,000 QUIKSILVER INC 116,500 152,000
2,000 QUINTILES TRANSNATIONAL CORP 118,600 146,500
3,000 RAYCHEM CORP 155,405 233,625
8,000 READING + BATES CORP 152,480 196,000
3,000 REGIS CORP MINNESOTA 70,500 110,625
10,000 RENAL TREATMENT CTRS INC 129,750 290,000
4,000 RESOUND CORP 52,700 49,500
3,000 RESPIRONICS INC 66,900 65,578
2,200 REYNOLDS + REYNOLDS CO 102,075 102,076
8,300 RICHFOOD HLDGS INC 182,849 270,787
3,000 ROBERT HALF INTL INC 123,555 172,500
8,800 ROSS STORES INC 269,350 303,600
4,000 SAFESKIN CORP 88,200 117,000
27,200 SAFEWAY INC 523,116 918,000
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,100 SANIFILL INC 99,773 134,462
8,500 SCHERING PLOUGH CORP 285,371 487,687
3,100 SCI SYS INC 94,162 132,912
4,000 SEACOR HLDGS INC 134,700 165,000
6,000 SHAW GROUP INC 83,550 117,750
11,500 SHELL CDA LTD 354,582 392,765
7,700 SHOWBIZ PIZZA TIME INC 171,512 167,475
1,600 SKYLINE CORP 38,848 39,200
5,800 SMITH INTL INC 97,098 172,550
7,000 SODAK GAMING INC 164,350 180,250
6,400 SONAT OFFSHORE DRILLING INC 274,917 351,200
6,000 SOUTHERN ENERGY HOMES INC 104,550 105,750
7,000 SPECTRAN CORP 74,725 88,812
4,400 SPRINT CORP 136,148 185,350
12,000 STAPLES INC 120,000 228,000
3,000 STAR BANC CORP 118,665 197,625
4,800 STERLING SOFTWARE INC. 179,688 373,200
8,000 STRUCTURAL DYNAMICS RESH CORP 195,500 255,000
2,400 STURM RUGER + CO INC 96,144 96,900
23,200 SUN ENERGY PARTNERS L P 103,864 98,600
4,000 SUN MICROSYSTEMS INC 140,500 217,000
8,800 SUNAMERICA INC 366,755 479,600
4,000 SUNDSTRAND CORP 126,620 147,000
6,300 SUNTRUST BKS INC 324,476 444,150
8,000 SYMBOL TECHNOLOGIES INC 206,416 370,000
6,900 SYSCO CORP 186,269 221,662
21,000 SYSTEM SOFTWARE ASSOC INC 463,942 501,375
6,000 TECHNE CORP 158,480 168,000
1,600 TELECOM CORP OF NEW ZEALAND 106,096 108,000
8,100 TEXAS INDS INC 419,418 518,400
3,700 TEXAS INSTRS INC 246,737 209,050
3,500 THERMEDICS INC 102,585 105,875
4,800 THERMO ELECTRON CORP 289,344 295,800
5,200 TIDEWATER INC 165,612 221,000
6,100 TRAVELERS GROUP INC 380,670 375,150
5,000 TSI INC MINN 89,000 91,250
15,100 UNICOM CORP 492,240 415,250
4,800 UNION CARBIDE CORP 144,256 218,400
4,900 UNITED DOMINION INDS LTD 87,622 117,600
<PAGE>
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,600 UNITED HEALTHCARE CORP 224,658 210,600
20,000 UNIVERSAL ELECTRS INC 191,500 210,000
4,000 UNIVERSAL HEALTH SVCS INC 203,698 222,000
7,200 US FACS CORP 131,952 132,300
9,600 USF + G CORP 133,725 152,400
5,200 UST INC 146,526 166,400
2,500 USX U S STL GROUP 82,075 82,500
6,200 VALMONT INDS INC 129,750 198,400
1,800 VIKING OFFICE PRODS INC 106,425 106,875
4,000 VIVUS 112,700 121,000
6,700 WABAN INC 166,863 164,150
6,000 WHOLE FOODS MKT INC 99,750 122,250
15,900 WILLIAMS COS INC 696,690 812,887
2,000 WISCONSIN CENT TRANSN CORP 150,600 169,000
11,300 WOLVERINE WORLD WIDE INC 236,665 348,887
6,000 WOODHEAD INDUSTRIES 94,500 93,000
11,500 WORLDCOM INC GA 433,437 540,500
5,000 XIRCOM INC 75,625 81,625
4,000 ZALE CORP NEW 69,500 74,500
500 ZIONS BANCORP 34,140 37,250
4,000 ZOLL MED CORP 62,200 58,000
6,000 ZOOM TELEPHONICS INC 115,548 138,094
----------- -----------
$48,066,092 $64,313,698
=========== ===========
<PAGE>
Value Line, Inc.
Schedule XIII - Other Investments
<TABLE>
<CAPTION>
Historical
Mutual Fund Investments Cost Market Value
<S> <C> <C>
The Value Line Fund, Inc. $18,330,707 $25,266,394
The Value Line Special Situations Fund, Inc. 5,214,484 6,857,773
The Value Line Income Fund, Inc. 4,622,975 6,157,892
Value Line Leveraged Growth Investors, Inc. 26,141,088 36,667,269
Value Line U.S. Government Securities Fund, Inc. 2,787,569 2,751,085
The Value Line Tax Exempt Fund, Inc., High Yield Portfolio 11,323,692 11,623,921
Value Line Convertible Fund, Inc. 10,832,698 12,314,635
Value Line Aggressive Income Trust 4,723,333 4,915,617
Value Line New York Tax Exempt Trust 3,715,427 3,689,899
Value Line Intermediate Bond Fund Inc. 9,260,554 9,032,780
Value Line Small-Cap Growth Fund 8,360,490 11,739,281
Value Line Asset Allocation Fund, Inc. 28,014,279 36,637,666
Value Line US Multinational Company Fund 9,128,400 10,079,940
--------------------------------
Total $142,455,696 $177,734,152
================================
</TABLE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VALUE LINE, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
The following Amendment to the Certificate of Incorporation was authorized
by a vote of the Board of Directors on July 19, 1989 and adopted by the
shareholders on October 5, 1989.
1. The name of the corporation (the "Corporation") under which this
Corporation was formed is Eulav Services, Inc.
2. The Certificate of Incorporation of the Corporation was filed in the
Office of the Secretary of State on October 29, 1982.
3. The Certificate of Incorporation of the Corporation is hereby amended
to effect certain changes authorized by Section 402 of the Business Corporation
Law relating to Directors liability.
4. The Certificate of Incorporation is hereby amended by adding after
Article "EIGHTH" of the Certificate of Incorporation Article "NINTH" of the
Certificate of Incorporation which shall read as follows:
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"NINTH: No Director of the Corporation shall be personally liable to the
Corporation or its shareholders for damages for any breach of duty in such
capacity, except for gross negligence and to the extent that such elimination or
limitation of liability is expressly prohibited by the Business Corporation Law
of the State of New York. No amendment, modification or repeal of this Article
shall adversely affect any right or protection of any director that exists at
the time of such amendment, modification or repeal."
IN WITNESS WHEREOF, I have made and signed this certificate this 24th day
of October, 1989 an I affirm the statements contained therein are true under
penalties of perjury.
By: /s/Thomas J. Sexton
---------------------------------
Thomas J. Sexton - Vice President
By: /s/Rodd M. Baxter
---------------------------------
Rodd M. Baxter - Secretary
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VALUE LINE, INC.
PROFIT SHARING AND SAVINGS PLAN
As amended and restated
effective May 1, 1989
Including amendments through
August 10, 1995
<PAGE>
VALUE LINE, INC.
PROFIT SHARING AND SAVINGS PLAN
TABLE OF CONTENTS
PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 "Account". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 "Administrative Committee" . . . . . . . . . . . . . . . . . . 2
1.03 "Affiliated Company" . . . . . . . . . . . . . . . . . . . . . 2
1.04 "Beneficiary". . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 "Benefit Commencement Date". . . . . . . . . . . . . . . . . 2
1.06 "Board of Directors" . . . . . . . . . . . . . . . . . . . . 2
1.07 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.08 "Company". . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.09 "Compensation" . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 "Eligible Employee". . . . . . . . . . . . . . . . . . . . . 3
1.11 "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 "Employer Contribution". . . . . . . . . . . . . . . . . . . 3
1.13 "Entry Date" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Investment Fund". . . . . . . . . . . . . . . . . . . . . . 3
1.16 "Member" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 "Normal Retirement Age". . . . . . . . . . . . . . . . . . . 3
1.18 "Participating Employer" . . . . . . . . . . . . . . . . . . 4
1.19 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 "Plan Year". . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 "Total Disability" . . . . . . . . . . . . . . . . . . . . . 4
1.22 "Trust Agreement". . . . . . . . . . . . . . . . . . . . . . 4
1.23 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 "Trustee". . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.25 "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . 4
1.26 "Voluntary Contribution" . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 DEFINITIONS AND RULES FOR DETERMINING SERVICE . . . . . . . 5
2.01 "Approved Absence" . . . . . . . . . . . . . . . . . . . . . 5
2.02 "Break in Service" . . . . . . . . . . . . . . . . . . . . . 5
2.03 "Eligibility Computation Period" . . . . . . . . . . . . . . 5
2.04 "Employment Commencement Date" . . . . . . . . . . . . . . . 5
2.05 "Hours of Service" . . . . . . . . . . . . . . . . . . . . . 5
2.06 "Maternity or Paternity Leave of Absence". . . . . . . . . . 6
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2.07 "Month of Service" . . . . . . . . . . . . . . . . . . . . . 6
2.08 "Vesting Computation Period" . . . . . . . . . . . . . . . . 6
2.09 "Year of Service". . . . . . . . . . . . . . . . . . . . . . 6
2.10 Rules for Crediting Service After a Break in Service.. . . . 6
ARTICLE 3 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . 8
3.01 Eligibility to Participate . . . . . . . . . . . . . . . . . . 8
3.02 Commencement of Participation. . . . . . . . . . . . . . . . 8
3.03 Break in Service Before Participation. . . . . . . . . . . . 8
3.04 Break in Service After Participation . . . . . . . . . . . . 8
3.05 Cessation of Participation . . . . . . . . . . . . . . . . . 8
ARTICLE 4 CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . 9
4.01 Employer Contributions . . . . . . . . . . . . . . . . . . . 9
4.02 Voluntary Contributions . . . . . . . . . . . . . . . . . . . 9
ARTICLE 5 LIMITATIONS ON CONTRIBUTIONS. . . . . . . . . . . . . . . . 10
5.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 10
5.02 Limitations on Voluntary Contributions Applicable to Highly
Compensated Employees . . . . . . . . . . . . . . . . . . . 11
5.03 Correction of Excess Voluntary Contributions . . . . . . . . 12
5.04 Limitations on Contributions Applicable to All Members . . . 12
5.05 Reduction of Excess Annual Additions . . . . . . . . . . . . 13
5.06 Deduction Limitation Applicable to Employer Contributions. . 13
ARTICLE 6 MEMBERS' ACCOUNTS . . . . . . . . . . . . . . . . . . . . . 14
6.01 Separate Accounts. . . . . . . . . . . . . . . . . . . . . . 14
6.02 Contributions to Account . . . . . . . . . . . . . . . . . . 14
6.03 Valuation of Accounts. . . . . . . . . . . . . . . . . . . . 14
6.04 Segregated Accounts. . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 7 TRUST FUND AND INVESTMENT OF ACCOUNTS . . . . . . . . . . . 15
7.01 Trust Fund and Trustee . . . . . . . . . . . . . . . . . . . 15
7.02 Investment Funds . . . . . . . . . . . . . . . . . . . . . . 15
7.03 Investment Direction . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 8 VESTING AND FORFEITURE. . . . . . . . . . . . . . . . . . . 17
8.01 Voluntary Contribution Account . . . . . . . . . . . . . . . 17
8.02 Employer Contribution Account. . . . . . . . . . . . . . . . 17
8.03 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . 17
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8.04 Restoration of Forfeitures . . . . . . . . . . . . . . . . . 17
8.05 Application of Forfeitures . . . . . . . . . . . . . . . . . 18
8.06 Change in Vesting Schedule . . . . . . . . . . . . . . . . . 18
ARTICLE 9 LOANS TO MEMBERS. . . . . . . . . . . . . . . . . . . . . . 19
9.01 General. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.02 Eligibility for Loan . . . . . . . . . . . . . . . . . . . . 19
9.03 Maximum Loan Amount. . . . . . . . . . . . . . . . . . . . . 20
9.04 Loan Terms . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.05 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.06 Treatment of Loan Payments . . . . . . . . . . . . . . . . . 21
9.07 Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.08 Termination of Employment . . . . . . . . . . . . . . . . . .21
ARTICLE 10 WITHDRAWALS OF VOLUNTARY CONTRIBUTIONS
PRIOR TO TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . . . . 22
10.01 Withdrawals of Voluntary Contributions. . . . . . . . . . . 22
10.02 General Rules Applying to Withdrawals . . . . . . . . . . . 22
ARTICLE 11 DISTRIBUTIONS AFTER TERMINATION OF EMPLOYMENT. . . . . . . 23
11.01 Termination of Employment Prior to Normal Retirement Age. . 23
11.02 Termination of Employment At or After Normal Retirement Age 23
11.03 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.04 Form of Payment Following Termination of Employment - Members
With Hire Dates Prior to May 1, 1995 . . . . . . . . . . . 24
11.05 Form of Payment of Death Benefits . . . . . . . . . . . . . 25
11.06 Form of Payment - Members with Hire Dates on or
After May 1, 1995. . . . . . . . . . . . . . . . . . . . . 25
11.07 Direct Transfer of Eligible Rollover Distribution . . . . . 25
11.08 Beneficiary Designation . . . . . . . . . . . . . . . . . . 25
11.09 Married Members - Waiver of Joint and Survivor Annuity . . 26
11.10 Rules Applying to Installment Distributions . . . . . . . . 27
11.11 Mandatory Distribution. . . . . . . . . . . . . . . . . . . 27
ARTICLE 12 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . 28
12.01 Plan Administrator. . . . . . . . . . . . . . . . . . . . . 28
12.02 Administrative Committee's Authority and Powers . . . . . . 28
12.03 Delegation of Duties. . . . . . . . . . . . . . . . . . . . 28
12.04 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.05 Compensation. . . . . . . . . . . . . . . . . . . . . . . . 29
12.06 Exercise of Discretion. . . . . . . . . . . . . . . . . . . 29
12.07 Fiduciary Liability . . . . . . . . . . . . . . . . . . . . 29
12.08 Indemnification by Participating Employers. . . . . . . . . 29
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12.09 Plan Participation by Fiduciaries . . . . . . . . . . . . . 30
12.10 Missing Persons . . . . . . . . . . . . . . . . . . . . . . 30
12.11 Claims Procedure. . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 13 AMENDMENT AND TERMINATION OF PLAN. . . . . . . . . . . . . 31
13.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.02 Right to Terminate Plan . . . . . . . . . . . . . . . . . . 31
13.03 Consequences of Termination . . . . . . . . . . . . . . . . 31
ARTICLE 14 PARTICIPATION BY AFFILIATED COMPANIES. . . . . . . . . . . 32
14.01 Participation . . . . . . . . . . . . . . . . . . . . . . . 32
14.02 Delegation of Powers and Authority. . . . . . . . . . . . . 32
14.03 Termination of Participation. . . . . . . . . . . . . . . . 32
ARTICLE 15 TOP-HEAVY PLAN PROVISIONS. . . . . . . . . . . . . . . . . 34
15.01 Applicability . . . . . . . . . . . . . . . . . . . . . . . 34
15.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 34
15.03 Vesting Requirement and Schedule. . . . . . . . . . . . . . 36
15.04 Minimum Contribution. . . . . . . . . . . . . . . . . . . . 36
15.05 Compensation Limitation . . . . . . . . . . . . . . . . . . 37
15.06 Aggregate Limit on Contributions and Benefits for Key
Employees . . . . . . . . . . . . . . . . . . . . . . . . .37
ARTICLE 16 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 38
16.01 Trust Fund Sole Source of Payments for Plan . . . . . . . . 38
16.02 Exclusive Benefit . . . . . . . . . . . . . . . . . . . . . 38
16.03 Non-Alienation. . . . . . . . . . . . . . . . . . . . . . . 38
16.04 Qualified Domestic Relations Order. . . . . . . . . . . . . 38
16.05 Employment Rights . . . . . . . . . . . . . . . . . . . . . 38
16.06 Return of Contributions.. . . . . . . . . . . . . . . . . . 39
16.07 Merger, Consolidation or Transfer . . . . . . . . . . . . . 39
16.08 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . 39
16.09 Rules of Construction . . . . . . . . . . . . . . . . . . . 39
APPENDIX A RULES APPLYING TO PLAN LOANS . . . . . . . . . . . . . . . A-1
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VALUE LINE, INC.
PROFIT SHARING AND SAVINGS PLAN
PURPOSE
The purpose of the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan")
is to provide eligible employees of Value Line, Inc. (the "Company"), Arnold
Bernhard & Co., Inc., and any Affiliated Company which adopts the Plan on behalf
of its employees with retirement income through a program of employer
contributions and employee voluntary after-tax contributions.
The Plan is intended to (1) qualify as a profit-sharing plan for purposes of
Sections 401(a), 402, 412, and 417 of the Internal Revenue Code of 1986, as
amended (the "Code"), and (2) comply with the requirements of the Employee
Retirement Income Security Act of 1974, as amended.
The Plan (formerly known as the Arnold Bernhard & Co., Inc. Profit Sharing and
Savings Plan) was originally adopted by Arnold Bernhard & Co., Inc. effective
May 1, 1951.
The Plan was amended and restated effective May 1, 1976; amended effective May
1, 1978; amended and restated effective May 1, 1982, May 1, 1983, May 1, 1984
and May 1, 1985.
The Internal Revenue Service issued a favorable determination letter dated June
16, 1987 (File Folder Number 130011445) with respect to the Plan as amended and
restated effective May 1, 1985, including amendments adopted on August 10, 1987.
This plan document sets forth the provisions of the Plan as amended and restated
effective May 1, 1989 except as otherwise specifically provided in the Plan.
All issues arising with respect to participation in the Plan prior to May 1,
1989 shall be determined by the terms and provisions of the Plan as in effect
prior to May 1, 1989 except as otherwise specifically provided in the Plan.
The Internal Revenue Service issued a favorable determination letter dated July
7, 1995 (File Folder Number 133007416) with respect to the Plan as amended and
restated effective May 1, 1989, including amendments adopted as of April 30,
1995.
This document also includes all amendments to the Plan through August 10, 1995.
54
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ARTICLE 1
DEFINITIONS
Wherever used herein, the following terms shall have the following meanings:
1.01 "ACCOUNT" means the entire interest of a Member in the Trust Fund and
shall include the following subaccounts:
(A) "EMPLOYER CONTRIBUTION ACCOUNT" means that portion of the Member's Account
attributable to the Employer Contributions made on the Member's behalf by a
Participating Employer and the earnings thereon.
(B) "VOLUNTARY CONTRIBUTION ACCOUNT" means that portion of the Member's Account
attributable to a Member's Voluntary Contributions, if any, and the
earnings thereon.
(C) "ROLLOVER CONTRIBUTION ACCOUNT" means that portion of the Member's Account
attributable to a Member's rollover contributions made prior to May 1, 1995
in accordance with the rollover requirements of Section 402(c) of the Code.
1.02 "ADMINISTRATIVE COMMITTEE" means the committee appointed from time to time
by the Board of Directors to administer the Plan in accordance with Article 12.
1.03 "AFFILIATED COMPANY" means any corporation which is a member of a
controlled group of corporations (as defined in Section 414(b) of the Code)
which includes the Company; any trade or business (whether or not incorporated)
which is under common control (as defined in Section 414(c) of the Code) with
the Company; any organization (whether or not incorporated) which is a member of
an affiliated service group (as defined in Section 414(m) of the Code) which
includes the Company; and any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code.
1.04 "BENEFICIARY" means any person entitled to receive payment of a Member's
Account pursuant to Section 11.08 as a result of the death of the Member.
1.05 "BENEFIT COMMENCEMENT DATE" means the first day of the first period for
which a Participant's Account is payable in the form of an annuity.
1.06 "BOARD OF DIRECTORS" means the Board of Directors of Value Line, Inc.
1.07 "CODE" means the Internal Revenue Code of 1986, as amended.
1.08 "COMPANY" means Value Line, Inc.
1.09 "COMPENSATION" means for any Plan Year a Member's wages as defined in
Section 3401(a) of the Code (for purposes of income tax withholding) determined
without regard to any rules that limit
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remuneration included in wages based on the nature or location of the employment
or the services performed, subject to the following inclusions and exclusions:
(a) excluding bonuses;
(b) excluding (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits; and
(c) excluding commissions earned in excess of draw, provided, however, that
such commissions will be included (i) in the case of a Member whose total
of salary plus draw is less than $60,000 (ii) but only to the extent that
the total of a Member's salary, draw and such commissions do not exceed
$60,000.
The maximum amount of Compensation that may be taken into account in any Plan
Year shall not exceed the dollar limitation contained in Section 401(a)(17) of
the Code in effect as of the beginning of the Plan Year.
1.10 "ELIGIBLE EMPLOYEE" means any Employee employed by a Participating
Employer, but excluding
(a) any Employee who is covered by a collective bargaining agreement to which a
Participating Employer is a party, and which agreement does not provide for
participation in the Plan;
(b) any Employee who is a nonresident alien and who does not receive any United
States source income from the Company or any Affiliated Company; and
(c) any individual who is a "leased employee" within the meaning of Section
414(n)(2) of the Code.
1.11 "EMPLOYEE" means any individual who is a "common-law employee" of the
Company or an Affiliated Company.
1.12 "EMPLOYER CONTRIBUTION" means the contribution made by a Participating
Employer on behalf of Members as described in Section 4.01.
1.13 "ENTRY DATE" means each April 30 and October 31.
1.14 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.15 "INVESTMENT FUND" means one or more of the investment vehicles made
available to Members for investment of their Accounts pursuant to Article 7.
1.16 "MEMBER" means any Eligible Employee or former Eligible Employee who has
met the participation requirements set forth in Article 3.
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1.17 "NORMAL RETIREMENT AGE" means
(a) with respect to Employees hired prior to May 1, 1995, age 65; and
(b) with respect to Employees hired on or after May 1, 1995, the later of age
65 or the completion of 5 Years of Service.
1.18 "PARTICIPATING EMPLOYER" means the Company, Arnold Bernhard & Co., Inc.,
or any Affiliated Company which is designated as a Participating Employer by the
Administrative Committee, and which has adopted the Plan by proper corporate
action.
1.19 "PLAN" means the Value Line, Inc. Profit Sharing and Savings Plan.
1.20 "PLAN YEAR" means the 12-consecutive month period beginning each May 1.
1.21 "TOTAL DISABILITY" means a Member's total and permanent disability as
determined for purposes of entitlement to Social Security disability benefits.
1.22 "TRUST AGREEMENT" means the agreement between the Employer and the Trustee
under which the assets are held, administered and managed.
1.23 "TRUST FUND" means all assets under the Plan held by the Trustee.
1.24 "TRUSTEE" means any person, bank, or such other trustee or trustees under
the Trust Agreement as may be appointed by the Company to hold, invest and
disburse the funds of the Plan.
1.25 "VALUATION DATE" means the last day of each Plan Year, and such other
dates as may be determined by the Administrative Committee for valuing the Trust
Fund.
1.26 "VOLUNTARY CONTRIBUTION" means the voluntary after-tax contribution made
to the Plan by a Member pursuant to Section 4.02.
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ARTICLE 2
DEFINITIONS AND RULES FOR DETERMINING SERVICE
2.01 "APPROVED ABSENCE" means an Employee's approved leave of absence from
employment with the Company or an Affiliated Company because of military
service, illness, disability, pregnancy, educational pursuits, service as a
juror, or temporary employment with a government agency, or other leave of
absence approved by the Company or Affiliated Company. An Approved Absence also
includes any leave of absence in accordance with the requirements of the Family
and Medical Leave Act of 1993. The Company or Affiliated Company shall
determine the first and last days of any Approved Absence.
2.02 "BREAK IN SERVICE" means a 12-consecutive month period during which an
Employee fails to complete more than 501 Hours of Service with the Company or an
Affiliated Company. Solely for purposes of determining whether an Employee has
a Break in Service, Hours of Service shall be recognized during an Approved
Absence or a Maternity or Paternity Leave of Absence. During such absence, the
Employee shall be credited with the Hours of Service which would have been
credited but for the absence, or, if such hours cannot be determined, with eight
hours per day.
2.03 "ELIGIBILITY COMPUTATION PERIOD" means (a) the 12-consecutive month period
beginning on an Employee's Employment Commencement Date, or (b) in the case of
an Employee who fails to complete 1,000 or more Hours of Service during his
first Eligibility Computation Period, any Plan Year commencing after the
Employee's Employment Commencement Date.
2.04 "EMPLOYMENT COMMENCEMENT DATE" means the first day on which an Employee
performs an Hour of Service for the Company or an Affiliated Company.
2.05 "HOURS OF SERVICE" means the following:
(a) Each hour for which an Employee is directly or indirectly paid, or entitled
to payment, for the performance of duties for the Company or an Affiliated
Company. Each such hour shall be credited to the Employee for the
computation period or periods in which the duties are performed.
(b) Each hour for which an Employee is directly or indirectly paid, or entitled
to payment, by the Company or an Affiliated Company on account of a period
of time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
disability, layoff, jury duty, government-required military duty, or leave
of absence. Each such hour shall be credited to the Employee for the
computation period or periods in which such period occurs, subject to the
following rules:
(i) No more than 501 Hours of Service shall be credited under this
paragraph (b) to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not
such period occurs in a single computation period), and
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(ii) Hours of Service will not be credited under this paragraph (b) for
which payment by the Company or an Affiliated Company is made or due
under a plan maintained solely for the purpose of complying with
applicable workers' compensation, unemployment compensation, or
disability insurance laws or where payment solely reimburses the
Employee for medical or medically related expenses incurred by the
Employee.
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Company or an Affiliated Company. The
same Hours of Service shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These
hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement, or payment is made.
Hours of Service to be credited to an individual under this Section 2.05 will be
calculated and credited pursuant to Section 2530.200b-2 of the Department of
Labor Regulations which is incorporated herein by reference.
2.06 "MATERNITY OR PATERNITY LEAVE OF ABSENCE" means an absence from work by
reason of the Employee's pregnancy, birth of a child of the Employee, placement
of a child with the Employee in connection with adoption, or any absence for
purposes of caring for such a child for a period immediately following such
birth or placement.
2.07 "MONTH OF SERVICE" means a calendar month during which an Employee
completes at least 83 Hours of Service.
2.08 "VESTING COMPUTATION PERIOD" means a Plan Year.
2.09 "YEAR OF SERVICE" means an Eligibility Computation Period or a Vesting
Computation Period Year during which an Employee completes --
(a) at least 1,000 Hours of Service with the Company or an Affiliated Company;
or
(b) 3 Months of Service during the period February 1 through April 30;
provided, however, that an Employee shall be credited with a Year of
Service pursuant to this paragraph (b) only with respect to his first year
of employment. Notwithstanding the foregoing, this paragraph (b) shall not
apply to any Employee whose Employment Commencement Date occurs on or after
May 1, 1995.
2.10 RULES FOR CREDITING SERVICE AFTER A BREAK IN SERVICE.
If a Member is reemployed by the Company or an Affiliated Company after a Break
in Service, the following special rules shall apply in determining his Years of
Service:
(a) In the case of a Member who is reemployed before the occurrence of 5
consecutive Breaks in Service --
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(i) Years of Service completed prior to such break will not be taken into
account until the Member has completed a Year of Service following his
reemployment; and
(ii) both pre-break and post-break Years of Service will count in vesting
his pre-break and post-break account balances.
(b) In the case of a Member who is reemployed after the occurrence of 5 or more
consecutive Breaks in Service (or he is reemployed prior to such occurrence
but does not make the repayment provided for in Section 8.04) --
(i) separate Employer Contribution Accounts will be maintained to reflect
the Member's pre-
break and post-break account balances; and
(ii) all Years of Service after such Breaks in Service will be disregarded
for the purposes of vesting the pre-break account balance, but both
pre-break and post-break Years of Service will count for purposes of
vesting the account balance that accrues after such break.
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ARTICLE 3
PARTICIPATION
3.01 ELIGIBILITY TO PARTICIPATE.
Each Eligible Employee who is employed by a Participating Employer shall be
eligible to participate in the Plan if he is credited with a Year of Service
during an Eligibility Computation Period.
3.02 COMMENCEMENT OF PARTICIPATION.
Each Eligible Employee who meets the requirement of Section 3.01 shall become a
Member in the Plan commencing as of the first Entry Date coinciding with or next
following his completion of such requirements.
3.03 BREAK IN SERVICE BEFORE PARTICIPATION.
If an Eligible Employee incurs a Break in Service before he becomes eligible to
participate in the Plan and he later is reemployed, he shall be treated as a new
Employee at the time of his reemployment for purposes of the participation
requirements.
3.04 BREAK IN SERVICE AFTER PARTICIPATION.
If an Eligible Employee incurs a Break in Service after he becomes a Member and
he later is reemployed, he shall again become a Member in the Plan commencing on
his Employment Recommencement Date.
3.05 CESSATION OF PARTICIPATION.
An individual will cease to be eligible to participate in the Plan with respect
to Employer Contributions and Voluntary Contributions as of the date (a) he
ceases to be an Eligible Employee or (b) termination of employment. After such
date, he shall continue to be a Member only with respect to the allocation of
earnings, losses and expenses made in accordance with Article 6 until the
balance credited to his Account is distributed.
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ARTICLE 4
CONTRIBUTIONS
4.01 EMPLOYER CONTRIBUTIONS.
(a) For each Plan Year, a Participating Employer may make Employer
Contributions to the Trust Fund in such amount as may be determined by the
Administrative Committee in its sole discretion.
(b) Employer Contributions shall be allocated to the Employer Contribution
Account on behalf of each Member who: (i) is actively employed by a
Participating Employer on the last day of the Plan Year and (ii) has been
credited with at least 1,000 Hours of Service during the Plan Year.
Notwithstanding the foregoing requirements, contributions also shall be
made on behalf of Members whose employment was terminated during the Plan
Year after attaining age 65 or whose employment was terminated by reason of
death or Total Disability.
(c) The amount of the Employer Contribution to be allocated to each eligible
Member's Account for a Plan Year shall be equal to the ratio that such
Member's Compensation for the Plan Year bears to the Compensation for all
eligible Members for the Plan Year.
(d) Employer Contributions made on behalf of any Member shall be subject to the
limitations set forth in Article 5.
(e) Employer Contributions shall be paid by a Participating Employer in cash or
other property to the Trust Fund not later than the due date (including
extensions) prescribed by law for filing the Participating Employer's
federal income tax return for the Participating Employer's taxable year for
which the Employer Contributions are claimed as an income tax deduction.
4.02 VOLUNTARY CONTRIBUTIONS.
(A) A Member may make voluntary non-deductible contributions to the Plan by
payroll deduction, lump sum cash payment, or both. In no event shall a
Member's Voluntary Contributions for any Plan Year exceed 10% of his
Compensation for such Plan Year.
(B) A Member's election to make Voluntary Contributions, or to change or
suspend such Contributions, shall be made in the form, manner, and in
accordance with the notice requirements, prescribed by the Administrative
Committee.
(C) Voluntary Contributions shall be transferred by a Participating Employer to
the Trust Fund as soon as practicable, but in no event later than 90 days
after the day on which a Member's Compensation has been reduced with
respect to such contribution.
(D) Voluntary Contributions shall be subject to the limitations set forth in
Article 5. The Administrative Committee may reject, amend or revoke the
election of any Member at any
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time if the Administrative Committee determines that such change or
revocation is necessary to insure that the limitations of Article 5 are not
exceeded.
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ARTICLE 5
LIMITATIONS ON CONTRIBUTIONS
5.01 DEFINITIONS.
The following definitions shall apply for purposes of this Article 5:
(A) "ANNUAL ADDITION" means, effective for Plan Years beginning after December
31, 1986, the sum of the following amounts allocated to a Member's Account
during the Limitation Year:
(i) employer contributions,
(ii) employee contributions,
(iii) forfeitures, and
(iv) amounts described in Sections 415(1)(1) and 419(A)(d)(2) of the Code.
The amount of a Member's Annual Additions shall be determined without
regard to the limitations set forth in Section 5.02.
(B) "415 COMPENSATION" means wages as defined in Section 3401(a) of the Code
and all other payments of compensation to an employee by his employer (in
the course of the employer's trade or business) for which the employer is
required to furnish the employee a written statement under Sections
6041(d), 6051(a)(3), and 6052 of the Code.
The maximum amount of 415 Compensation that may be taken into account in
any Plan Year shall not exceed the dollar limitation contained in Section
401(a)(17) of the Code in effect as of the beginning of the Plan Year.
(C) "HIGHLY COMPENSATED EMPLOYEE" means, with respect to any Plan Year
beginning after December 31, 1986,
(i) any Employee who at any time during the Look-back Year:
(A) received 415 Compensation in excess of the dollar limitation
contained in Section 414(q)(1)(B) of the Code in effect at the
beginning of such year;
(B) received 415 Compensation in excess of the dollar limitation
contained in Section 414(q)(1)(C) of the Code in effect at the
beginning of such year and was a member of the top-paid 20
percent (20%) of Employees during such year;
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(C) was an officer of the Company or any Affiliated Company and
received 415 Compensation during such year greater than 50
percent (50%) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code at the beginning of such year; or
(D) was a 5-percent owner.
(ii) The term Highly Compensated Employee also means, with respect to any
Plan Year, any Employee who, at any time during such Plan Year, (A)
is one of the 100 employees who received the most compensation from
the Company or any Affiliated Company during the Plan Year, or (B)
is a 5-percent owner.
(iii) A family member of a Highly Compensated Employee, or former Highly
Compensated Employee, shall be treated as a Highly Compensated
Employee to the extent required by Section 414(q) of the Code and
the regulations thereunder.
(iv) The Look-back Year shall be the 12-consecutive month period
immediately preceding the Plan Year; provided, however, that the
Administrative Committee may elect for any Plan Year to make the
Look-back Year calculation on the basis of the calendar year ending
with or within such Plan Year in accordance with Section 1.414(q)-1T
Q&A-14 of the Income Tax Regulations.
(v) The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of employees in the
top-paid group, the top 100 employees, the number of employees
treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
(d) "LIMITATION YEAR" means the Plan Year.
(e) "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee who is neither a Highly
Compensated Employee nor a "Family Member" (within the meaning of Section
414(q)(6)(B) of the Code).
5.02 LIMITATIONS ON VOLUNTARY CONTRIBUTIONS APPLICABLE TO HIGHLY COMPENSATED
EMPLOYEES.
(a) Effective for Plan Years beginning after December 31, 1986, the Actual
Contribution Percentage for Members who are Highly Compensated Employees
for the Plan Year shall not exceed the greater of:
(i) the Actual Contribution Percentage of the Members who are Non-highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) the Actual Contribution Percentage for Members who are Non-highly
Compensated Employees for the Plan Year multiplied by 2.0, provided
that the Actual Contribution Percentage for Members who are Highly
Compensated Employees does not exceed the
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Actual Contribution Percentage for Members who are Non-highly
Compensated Employees by more than 2 percentage points.
(b) "ACTUAL CONTRIBUTION PERCENTAGE" means, for a specified group of Members
for a Plan Year, the average of the ratios (calculated separately for each
participant in such group) of (i) the amount of Voluntary Contributions
actually paid over to the trust on behalf of such Member for the Plan Year
to (ii) the Member's 415 Compensation for such Plan Year (whether or not
the Employee was a Member for the entire Plan Year).
5.03 CORRECTION OF EXCESS VOLUNTARY CONTRIBUTIONS.
In the event that the limitations set forth in Section 5.02 are exceeded for any
Plan Year, excess Voluntary Contributions with respect to a Plan Year, plus any
income or minus any loss allocable thereto, shall be distributed to Members on
whose behalf such excess contributions were made. The amount of a Member's
excess Voluntary Contributions shall be determined in accordance with Section
401(m)(6) of the Code and the regulations thereunder. Such distribution shall
be made no later than the last day of the following Plan Year.
5.04 LIMITATIONS ON CONTRIBUTIONS APPLICABLE TO ALL MEMBERS.
(a) In no event shall the Annual Addition to a Member's Account for any
Limitation Year exceed the lesser of:
(i) $30,000 (or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as in effect
for the Limitation Year), or
(ii) 25% of the Member's 415 Compensation for the Limitation Year.
(B) If a Member also is covered under another defined contribution plan, a
welfare benefit fund (as defined in Section 419(e) of the Code), or an
individual medical account (as defined in Section 415(l)(2) of the Code),
maintained by an Employer, then the Annual Addition which may be credited
to a Member's Account under paragraph (a) above for any Limitation Year
shall be reduced by the Annual Additions credited to the Member's account
under such other plans and welfare benefit funds for the same limitation
year.
(c) If a Member also participates, or has previously participated, in one or
more defined benefit plans (as defined in Section 414(j) of the Code)
maintained by an Employer, then in no event shall the sum of the Member's
Defined Contribution Fraction (as defined in Section 415(e)(3) of the Code)
and the Member's Defined Benefit Fraction (as defined in Section 415(e)(2)
of the Code) for such Member exceed 1.0 in any Limitation Year. If such
limitation is exceeded, then such Member's Annual Addition to this Plan
shall be reduced to the extent necessary so that such fraction does not
exceed 1.0, but only if the defined benefit plan in which the Member is
participating does not permit a reduction of the Member's benefit
thereunder that would reduce such fraction to 1.0.
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(d) Solely for purposes of this Section 5.04, the term "Employer" means any
corporation which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code as modified by Section 415(h)) which
includes the Company; any trade or business (whether or not incorporated)
which is under common control (as defined in Section 414(c) of the Code as
modified by Section 414(h)) with the Company; any organization (whether or
not incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes the Company; and any
other entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code.
5.05 REDUCTION OF EXCESS ANNUAL ADDITIONS.
In the event that the Annual Addition credited to a Member's Account exceeds the
limitations contained in Section 5.04 of the Plan in any Limitation Year, then
such excess Annual Addition shall be reduced as follows:
(a) First, the amount of his Voluntary Contributions shall be reduced to the
extent that such reduction results in a reduction of the amount by which a
Member's Annual Addition exceeds such limitations.
(b) Second, the amount of his Employer Contributions shall be reduced to the
extent that such reduction results in a reduction of the amount by which a
Member's Annual Addition exceeds such limitations.
Any reduction of Employer Contributions shall be held unallocated in a suspense
account and applied to reduce employer contributions in succeeding Plan Years in
accordance with Section 8.05.
Notwithstanding anything contained herein or in the Trust Agreement to the
contrary, if the Plan is terminated while there remains a balance in any
suspense account, such amounts shall be paid to the Participating Employer which
contributed said amounts.
5.06 DEDUCTION LIMITATION APPLICABLE TO EMPLOYER CONTRIBUTIONS.
In no event shall the amount of Employer Contributions for any Plan Year exceed
the amount deductible with respect to such Plan Year under Section 404 of the
Code.
<PAGE>
ARTICLE 6
MEMBERS' ACCOUNTS
6.01 SEPARATE ACCOUNTS.
An Account in the Trust Fund shall be established and maintained for each
Member. The records of each such Account shall reflect the manner in which each
Account is invested and the value of such investments, any withdrawals by or
distributions to the Member or other persons, any charges or credits made to
such Account, and such other information as the Administrative Committee or the
Trustee may deem appropriate.
6.02 CONTRIBUTIONS TO ACCOUNT.
All contributions made by the Employer on behalf of a Member or made by a Member
on his own behalf, shall be paid to the Trustee and shall be allocated to the
Member's Account in accordance with the provisions of this Plan.
6.03 VALUATION OF ACCOUNTS.
The value of each Member's Account shall be determined as of each Valuation
Date, at which time the Administrative Committee shall adjust the balance of
each Member's Account to reflect any of the following which have occurred since
the last Valuation Date:
(a) contributions, withdrawals, distributions and other charges or credits
attributable to the Member's Account;
(b) the net earnings, gains, losses and expenses and any appreciation or
depreciation in market value of the Investment Funds selected by the Member
for investment of his Account; and
(c) with respect to any amounts credited to the Member's Account which are not
invested in any of the Investment Funds, the net increase or decrease, as
the case may be, in the value of the Trust Fund due to investment earnings,
gains or losses and any expenses of the Trust Fund, which adjustment shall
be made in the same proportion that the balance in the Member's Account as
of the last Valuation Date (reduced by any withdrawals, distributions or
transfers from such Account since the last Valuation Date and by the
principal amount of all outstanding loans to such Member) bore to the total
balance of all Members' Accounts (as so reduced) as of such last Valuation
Date.
6.04 SEGREGATED ACCOUNTS.
The Administrative Committee may direct the Trustee to establish a segregated
account and to transfer to such segregated account the balance of the Account of
any Member who pursuant to Article 11 has elected to defer distribution or to
receive distribution in installments. The Trustee shall invest such
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segregated accounts in such Investment Fund(s) or other investment vehicles as
may be selected by the Administrative Committee.
<PAGE>
ARTICLE 7
TRUST FUND AND INVESTMENT OF ACCOUNTS
7.01 TRUST FUND AND TRUSTEE.
The Administrative Committee may enter into a Trust Agreement or Agreements with
a Trustee or Trustees to establish a Trust Fund under the Plan. Any Trust
Agreement is designated as, and shall constitute, a part of this Plan and all
rights which may accrue to any person under the Plan shall be subject to the
terms and conditions of such Trust Agreement. The Administrative Committee may
modify the Trust Agreement from time to time to accomplish the purposes of the
Plan.
7.02 INVESTMENT FUNDS.
(a) The Administrative Committee shall select such investment vehicles as it
determines appropriate to meet the requirements of Section 404(c) of ERISA
and the regulations thereunder relating to the investment of Members'
Accounts at the direction of the Members. Such investment vehicles may
include mutual funds from the Value Line family of funds. The
Administrative Committee may select such additional investment vehicles as
it determines appropriate for the investment of Members' Accounts.
(b) The Administrative Committee may prescribe such rules and restrictions on
the investment of Members' Accounts in any such investment vehicle as it
deems appropriate.
(c) In the event that the fees of any investment manager or investment advisor
are attributable to a particular investment vehicle, the Administrative
Committee may, in its discretion, determine how such expenses shall be
allocated among Members' Accounts.
7.03 INVESTMENT DIRECTION.
(a) The Administrative Committee, or its designees, shall provide Members with
such information and materials with respect to the Investment Funds as may
be required by Section 404(c) of ERISA.
(b) A Member shall have the right to direct the Administrative Committee to
invest his Account in any of the Investment Funds designated for
participant investment in accordance with Section 7.02 of the Plan. A
Member's investment direction (or any change in his investment direction)
shall be made in the manner and in such form as the Administrative
Committee shall direct.
(c) A Member's investment election (or any change in his investment election)
shall be made in increments of 5 percent.
(d) A Member's investment election shall remain in effect until the Member
properly files a change of election with the Administrative Committee.
<PAGE>
(e) In the event that any Member shall not have directed the investment of all
or a portion of the balance in his account at any time, the Member shall be
deemed to have directed that such balance be invested in the Value Line
Cash Fund and such assets shall remain in such Investment Fund until such
time as the Member directs otherwise.
(f) A Member may change his investment election with respect to existing
investments, new contributions, or both, effective as of the first day
following a quarterly Valuation Date. Such change must be made in writing
or in accordance with such other methods as may be established by the
Administrative Committee in accordance with the requirements of Section
404(c) of ERISA.
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ARTICLE 8
VESTING AND FORFEITURE
8.01 VOLUNTARY CONTRIBUTION ACCOUNT.
A Member's interest in his Voluntary Contribution Account and Rollover
Contribution Account, if any, shall be fully vested and nonforfeitable at all
times.
8.02 EMPLOYER CONTRIBUTION ACCOUNT.
(a) Upon a Member's Total Disability, death, or attainment of his Normal
Retirement Age while an Employee, his interest in his Employer Contribution
Account shall be fully vested and nonforfeitable.
(b) If a Member terminates employment before attaining his Normal Retirement
Age for any reason other than Total Disability or death, his vested
interest in his Employer Contribution Account shall be determined in
accordance with the following schedule:
COMPLETED YEARS OF SERVICE VESTED INTEREST
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
8.03 FORFEITURE.
If an Employee terminates employment and receives (or is deemed to receive) a
distribution of his entire vested account balance, then the nonvested portion of
his Employer Contribution Account will be treated as a forfeiture. For purposes
of this Section 8.03, if the value of a Member's vested account balance is zero,
then such Member shall be deemed to have received a distribution of his entire
vested account balance as of the date of his termination of employment.
8.04 RESTORATION OF FORFEITURES.
(a) In the case of a Member who received a distribution of his entire vested
account balance under the Plan and who again becomes an Eligible Employee,
then the amount forfeited pursuant to Section 8.03 shall be restored if the
Eligible Employee repays the full amount of the distribution before the
earlier of:
(i) 5 years after the first date on which the Member is subsequently
reemployed; or
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(ii) the date the Member incurs 5 consecutive Breaks in Service following
the date of the distribution.
(b) In the case of a Member who is deemed to have received a distribution of
his entire vested interest under the Plan and who again becomes an Eligible
Employee, then the amount forfeited pursuant to Section 8.03 shall be
restored if the Member again becomes an Eligible Employee before the date
on which he incurs 5 consecutive Breaks in Service.
(c) A Member who is reemployed after the occurrence of 5 consecutive Breaks in
Service shall not have any restoration rights with respect to the
previously forfeited balance in his Employer Contribution Account.
8.05 APPLICATION OF FORFEITURES.
(a) Forfeitures of Employer Contributions shall be used to pay Plan expenses or
to reduce the amount of Employer Contributions which are to be made by the
Employer for the following Plan Year.
(b) If an amount must be restored to a reemployed Member's Employer
Contribution Account in accordance with Section 8.04, such restoration
shall be made, as directed by the Administrative Committee, from
forfeitures attributable to, or net income of the Trust which would
otherwise be allocated to Members employed by such Participating Employer,
and/or from a contribution made by such Participating Employer for that
purpose.
8.06 CHANGE IN VESTING SCHEDULE.
If the Plan's vesting schedule is amended, or the Plan is amended in any way
that directly or indirectly affects the calculation of a Member's vested
interest in his Employer Contribution Account, or if the Plan is deemed amended
by an automatic change to or from the top-heavy vesting schedule, each Member
with at least 3 Years of Service may elect to have his vested interest
calculated under the Plan without regard to such amendment or change. A
Member's election under this section must be made during the period beginning
with the date the amendment is adopted or deemed to be made and ending on the
latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Member is issued written notice of the amendment by the
Administrative Committee.
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ARTICLE 9
LOANS TO MEMBERS
9.01 GENERAL.
The Administrative Committee shall prescribe the terms and conditions for making
loans to Members from their Accounts consistent with the provisions of this
Article and the prohibited transaction exemption requirements of the Code and
ERISA and other applicable law.
9.02 ELIGIBILITY FOR LOAN.
A Member who meets the following requirements shall be eligible to receive a
loan from the Plan:
(a) The Member must be actively employed by a Participating Employer and must
have completed at least 5 Years of Service.
(b) The Member must establish to the satisfaction of the Administrative
Committee that a loan is needed to meet an immediate and heavy financial
need caused by a serious illness, accident, or catastrophe incurred by
(i) the Member, or
(ii) any of the following individuals if the individual received over
one-half of their support from the Member for the entire twelve
month-period prior to the date on which such loan is requested:
(A) the Member's spouse, if living with the Member,
(B) the Member's sons and daughters, both natural and legally
adopted,
(C) the Member's parents or grandparents, or
(D) the Member's brothers or sisters, provided that their
principal place of residence prior to the date that the loan
is requested is the Member's household.
Such immediate and heavy financial need also may include the need to pay
tuition and related educational fees for the next 12 months of post-
secondary education for the Member's children.
The Member must demonstrate that such need cannot be met by other
reasonably available financial resources of the Member. The Administrative
Committee may require such assurances and certifications as it may deem
necessary to determine whether the Member has an immediate and heavy
financial need.
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9.03 MAXIMUM LOAN AMOUNT.
In no event shall any loan made pursuant to this Article 9 be in an amount which
would cause the outstanding aggregate balance of all loans made to the Member
under this Plan and all other qualified plans maintained by the Company or any
Affiliated Company to exceed the lesser of (a) or (b):
(a) $50,000 reduced by the excess (if any) of
(i) the highest outstanding balance of loans from the Plan to the Member
during the one-year period ending on the day before the date the
loan is made, over
(ii) the outstanding balance of loans from the Plan to the Member on the
date the loan is made; or
(b) 50% of the current balance of the vested portion of the Member's Employer
Contribution Account, determined as of the most recent Valuation Date
occurring prior to the date on which the loan is made.
9.04 LOAN TERMS.
Loans shall be made to Members in accordance with the following terms:
(a) A loan to a Member shall be evidenced by the Member's recourse promissory
note in the form prescribed by the Administrative Committee.
(b) The period for repayment of a loan shall not exceed 5 years.
(c) The annual interest rate on loans will be One Percent Plus the Prime
Lending Rate stated in the Money Rates section of THE WALL STREET JOURNAL
on the first business day of the month in which the loan application is
approved by the Administrative Committee.
(d) Loan repayments on principal and interest shall be amortized in level
payments payable each payroll period over the term of the loan; provided,
that a Member who is on an approved leave of absence shall continue to
repay the loan through monthly payments of principal and interest due on
the first day of each calendar month in United States currency unless the
Administrative Committee determines, in its sole discretion, that
repayments may be made quarterly if extreme adverse circumstances apply.
9.05 COLLATERAL.
Notwithstanding anything to the contrary in Section 16.03, a Member who accepts
a Plan loan shall be deemed to have assigned to the Trustee, as security for the
loan, all of his right, title and interest in the Plan. The Administrative
Committee may require such additional security for the loan as it deems
necessary or prudent.
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9.06 TREATMENT OF LOAN PAYMENTS.
A loan shall be considered to be an investment of the Trust Fund. Any payment
to the Plan of interest on a loan to a Member, as well as repayments of loan
principal, shall be credited to the Member's Account and shall be accounted for
as investment earnings or return of principal, as the case may be, on that
Account.
9.07 DEFAULT.
(a) If not paid as and when due, in addition to any other remedies permitted by
law, any outstanding Plan loan (including interest accrued and unpaid
thereon) to a Member may be charged against the Member's Employer
Contribution Account. The outstanding loan balance shall be treated as
repaid to the extent of such charge.
(b) The Administrative Committee shall charge the unpaid loan balance against
the Member's Employer Contribution Account whether or not the Member has
attained age 59-1/2 or terminated employment, and whether or not such
charge is on account of any financial hardship of the Member.
9.08 TERMINATION OF EMPLOYMENT.
The unpaid balance of a loan shall immediately become payable in full upon a
Member's termination of employment.
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ARTICLE 10
WITHDRAWALS OF VOLUNTARY CONTRIBUTIONS
PRIOR TO TERMINATION OF EMPLOYMENT
10.01 WITHDRAWALS OF VOLUNTARY CONTRIBUTIONS.
A Member may, in the form and manner and at such times as may be prescribed by
the Administrative Committee, direct payment to himself of part or all of the
balance of his Voluntary Contribution Account or Rollover Contribution Account,
if any.
10.02 GENERAL RULES APPLYING TO WITHDRAWALS OF VOLUNTARY CONTRIBUTIONS.
The following rules shall apply to withdrawals made under this Article 10:
(a) In the case of a married Member who became a participant in the Plan
prior to May 1, 1995, no payment shall be made to such Member without
the written consent of the Member's spouse. Any written consent
required of a Member's spouse shall acknowledge the effect of the
consent and shall be witnessed by a representative designated by the
Administrative Committee or a notary public. The consent of a spouse
shall not be required if the Administrative Committee determines that
the spouse cannot be located or that the Code and ERISA otherwise do not
require such consent.
(b) Distribution of any withdrawal under this Article shall be made as soon
as practicable following the next Valuation Date selected by the
Administrative Committee for effecting such payment, unless the
Administrative Committee, in its sole discretion, elects to make payment
earlier.
(c) A Member may not make a withdrawal from his Account more often than once
in any Plan Year or at such other times as may be permitted pursuant to
uniform rules prescribed by the Administrative Committee.
(d) Any withdrawal made under this Article 10 shall be at least in the
amount of $1,000, or, if smaller, the balance credited to the Member's
Voluntary Contributions Account.
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ARTICLE 11
DISTRIBUTIONS AFTER TERMINATION OF EMPLOYMENT
11.01 TERMINATION OF EMPLOYMENT PRIOR TO NORMAL RETIREMENT AGE.
In the event a Member's employment with the Company or an Affiliated Company
terminates before the Member attains his Normal Retirement Age for any reason
other than death, he shall be entitled to receive a distribution of the vested
balance in his Account as of the Valuation Date coincident with or next
following his termination of employment.
(a) If the vested balance of the Member's Account does not exceed $3,500,
distribution shall be made as soon as practicable following the earlier
of:
(i) the date on which the Administrative Committee receives a
properly completed distribution election form; or
(ii) the expiration of the 90-day period beginning on the date on
which the Administrative Committee provides the notice required
by Section 402(f) of the Code to the Member.
(b) If the vested balance of a Member's Account exceeds $3,500, no
distribution will be made without the prior written consent of the
Member. If such consent is not given, distribution shall be made as
soon as practicable following the earlier of:
(i) the date on which the Administrative Committee receives a
properly completed distribution election form; or
(ii) the later of the Member's attainment of his Normal Retirement Age
or the expiration of the 90-day period beginning on the date on
which the Administrative Committee provides the notices required
by Section 402(f) of the Code and Section 1.411(a)-11(c) of the
Income Tax Regulations to the Member.
11.02 TERMINATION OF EMPLOYMENT AT OR AFTER NORMAL RETIREMENT AGE.
In the event a Member's employment with the Company or an Affiliated Company
terminates at or after the Member attains his Normal Retirement Age for any
reason other than death, he shall be entitled to receive a distribution of the
balance in his Account as of the Valuation Date coincident with or next
following his termination of employment. Distribution shall be made as soon as
practicable following the earlier of:
(a) the date on which the Administrative Committee receives a properly
completed distribution election form; or
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(b) the expiration of the 90-day period beginning on the date on which the
Administrative Committee provides the notices required by Section 402(f)
of the Code and Section 1.411(a)-11(c) of the Income Tax Regulations to
the Member.
11.03 DEATH.
(a) In the event a Member dies before payment of his Account begins, his
Beneficiary (as determined in accordance with Section 11.08 below) shall
be entitled to receive distribution of the Account as of the Valuation
Date coincident with or next following his death. Distribution shall be
made as soon as practicable following the earlier of:
(i) the date on which the Administrative Committee receives a
properly completed distribution election form; or
(ii) the expiration of the 90-day period beginning on the date on
which the Administrative Committee provides the notices required
by Section 402(f) of the Code and Section 1.411(a)-11(c) of the
Income Tax Regulations to the designated Beneficiary.
(b) Notwithstanding paragraph (a), in no event shall distribution of the
Account begin later than:
(i) if (A) the designated Beneficiary is the Member's spouse and (B)
the balance of the Member's Account exceeds $3,500, the date on
which the Member would have attained age 70-1/2; or
(ii) in any other case, one year after the Member's death.
11.04 FORM OF PAYMENT FOLLOWING TERMINATION OF EMPLOYMENT - MEMBERS WITH HIRE
DATES PRIOR TO MAY 1, 1995.
In the case of a Member whose Employment Commencement Date occurred prior to May
1, 1995, the form of payment of such Member's Account following the Member's
termination of employment shall be determined in accordance with the following
rules:
(a) If the vested balance of a Member's Account as of the Valuation Date
coinciding with or next following the date of the Member's termination
of employment is $3,500 or less, his Account will be distributed in a
single lump sum payment.
(b) If the vested balance of a Member's Account exceeds $3,500, the balance
credited to the Member's Account will be distributed in accordance with
the following rules:
(i) If the Member is married on the Member's Benefit Commencement
Date, the Member's Account will be distributed in the form of a
joint and survivor annuity which provides an annuity for the life
of the Member with a survivor annuity for the life of his spouse
which is equal to fifty percent (50%) of the amount of the
annuity which is payable during the joint lives of the Member and
his spouse, and which is purchased from an insurance company with
the vested balance credited to the
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Member's Account. A Member and his spouse may elect in
accordance with the requirements set forth in Section 11.09 to
waive the joint and survivor annuity requirements and elect
another form of payment described in subparagraph (ii) below.
(ii) If the Member is not described in subparagraph (i) above or the
Member and his spouse elect to waive the joint and survivor
annuity form of payment, the vested balance credited to the
Member's Account will be distributed by any of the following
methods:
(A) in a single lump sum;
(B) in substantially equal annual or more frequent
installments over a term not to exceed 15 years as
specified by the Member; provided, however, that in no
event may the term selected by the Member extend beyond
the life expectancy of the Member or the joint and last
survivor expectancy of the Member and his designated
Beneficiary; or
(C) in the form of an annuity; provided, however, that the
annuity may not provide for payments over a period
extending beyond either the life of the Member (or the
lives of the Member and his designated Beneficiary) or the
life expectancy of the Member (or the joint life
expectancy of the Member and his designated Beneficiary).
11.05 FORM OF PAYMENT OF DEATH BENEFITS.
In the case of a Member's death before payment of his Account has commenced, his
Account shall be distributed to his Beneficiary in a single lump sum payment.
11.06 FORM OF PAYMENT - MEMBERS WITH HIRE DATES ON OR AFTER MAY 1, 1995.
In the case of a Member whose Employment Commencement Date occurs on or after
May 1, 1995, such Member's Account shall be distributed to the Member or his
Beneficiary in a single lump sum payment.
11.07 DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTION.
Effective for distributions made after December 31, 1992, a Member or a
designated Beneficiary who is the Member's spouse may elect to have all or any
portion of his Account which is eligible for rollover distribution under Section
402(c) of the Code transferred directly to an eligible retirement plan (as
defined in Section 401(a)(31) of the Code).
11.08 BENEFICIARY DESIGNATION.
(a) Each Member may designate, in the form and manner prescribed by the
Administrative Committee, one or more persons as the Beneficiary of his
Account; provided, however, that if the Member is survived by a spouse,
such spouse shall be the Member's sole Beneficiary
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unless the spouse consents, in writing, to the Member's designation of
one or more other persons to be the Beneficiary of all or a portion of
the Member's Account. Any Beneficiary designation made by a Member may
be changed or revoked by the Member at any time or from time to time
during his lifetime; provided, however, that any such change or
revocation shall not reduce the portion of the Account payable to his
spouse without the written consent of the spouse. Any written consent
required of a Member's spouse shall acknowledge the effect of the
consent and shall be witnessed by a representative designated by the
Administrative Committee or a notary public. The consent of a spouse
shall not be required if the Administrative Committee determines that
the spouse cannot be located or that the Code and ERISA otherwise do not
require such consent.
(b) If no Beneficiary is designated or survives the Member, the balance of
his Account shall be paid to his issue per stirpes; provided, that if
there is no surviving issue, the Account shall be paid to his estate.
11.09 MARRIED MEMBERS - WAIVER OF JOINT AND SURVIVOR ANNUITY PAYMENTS.
A Member and his spouse may elect to waive the joint and survivor annuity form
of payment described in Section 11.04(b)(i) above and have the Member's Account
distributed in another form of payment in accordance with the following rules:
(a) An election may be made at any time during the 90-day period prior to
the Member's Benefit Commencement Date. A Member may revoke a prior
election to waive the normal form of payment without the consent of the
spouse at any time before the Benefit Commencement Date.
(b) Any election to waive the normal form of payment shall not be effective
unless: (i) the Member's spouse consents in writing to the election;
(ii) the election designates a specific beneficiary, including any class
of beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (or the spouse expressly permits
designations by the Member without any further spousal consent); (iii)
the spouse's consent acknowledges the effect of the election; and (iv)
the spouse's consent is witnessed by a notary public. Additionally, a
Member's waiver of the joint and survivor annuity form of payment shall
not be effective unless the election designates a form of benefit
payment which may not be changed without spousal consent (or the spouse
expressly permits designations by the Member without any further spousal
consent). Spousal consent shall not be required if the Member
establishes to the satisfaction of the Administrative Committee that
there is no spouse or that the spouse cannot be located.
(c) Any consent by a spouse obtained under this provision (or establishment
that the consent of a spouse can not be obtained) shall be effective
only with respect to such spouse. A consent that permits designations
by the Member without any requirement of further consent by such spouse
must acknowledge that the spouse has the right to limit consent to a
specific beneficiary, and a specific form of benefit where applicable,
and that the spouse voluntarily elects to relinquish either or both of
such rights. No consent obtained under this provision shall be valid
unless the Member has received notice as provided in subparagraph (iv)
below.
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(d) No less than 30 days and no more than 90 days prior to a Member's
Benefit Commencement Date, the Administrative Committee shall furnish to
such Member a written explanation of: (i) the terms and conditions of
the normal form of payment; (ii) the Member's right to make and the
effect of an election to waive the normal form of payment; (iii) the
rights of a Member's spouse; and (iv) the right to make, and the effect
of, a revocation of a previous election to waive the joint and survivor
annuity form of payment.
11.10 RULES APPLYING TO INSTALLMENT DISTRIBUTIONS.
(a) If a Member elects to have his Account distributed in installments, the
amount to be so distributed each year must be at least equal to the
quotient obtained by dividing the Member's benefit by the life
expectancy of the Member and his Beneficiary. Life expectancy and joint
and last survivor expectancy shall be computed by the use of the return
multiples contained in Section 1.72-9 of the Income Tax Regulations.
For purposes of this computation, a Member's life expectancy may be
recalculated no more frequently than annually; however, the life
expectancy of a Beneficiary, other than the Member's spouse, may not be
recalculated. If the Member's spouse is not the Beneficiary, the method
of distribution selected must assure that at least 50% of the present
value of the amount available for distribution is paid within the life
expectancy of the Member.
(b) In the event a Member dies after the commencement of the payment of
benefits under the Plan, the remaining portion of such benefits will
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Member's death.
(c) The Administrative Committee may establish rules permitting a Member or
Beneficiary who is receiving payment of benefits in installments to
elect to have the balance of the benefits distributed in a single lump
sum payment.
11.11 MANDATORY DISTRIBUTION.
Notwithstanding any other Plan provision, benefit payments to a Member or
Beneficiary shall commence no later than April 1 of the calendar year following
the calendar year in which the Member or Beneficiary attains age 70-1/2.
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ARTICLE 12
ADMINISTRATION
12.01 PLAN ADMINISTRATOR.
The Company shall be the "Administrator" of the Plan within the meaning of
Section 3(16)(A) of ERISA and the "Named Fiduciary" for purposes of Section
402(a)(2) of ERISA. Such duties shall be performed on behalf of the Company by
a committee which shall consist of the Chairman of the Board of Directors and
such other individuals as may be appointed by the Board of Directors.
12.02 ADMINISTRATIVE COMMITTEE'S AUTHORITY AND POWERS.
(a) The Administrative Committee shall have full authority and power to
administer and construe the Plan, subject to applicable requirements of
law. Without limiting the generality of the foregoing, the
Administrative Committee shall have the following powers and duties:
(i) To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
(ii) To interpret the Plan, its interpretation thereof to be final and
conclusive on all persons claiming benefits under the Plan;
(iii) To decide all questions concerning the Plan, including the
eligibility of any person to participate in the Plan and the
status and rights of any Participant or Beneficiary under the
Plan; and
(iv) To exercise all other powers specified in the Plan.
(b) The Administrative Committee may adopt such rules for the conduct of its
affairs as it deems appropriate.
12.03 DELEGATION OF DUTIES AND EMPLOYMENT OF AGENTS.
The Administrative Committee may delegate such of its duties and may appoint
such accountants, actuaries, legal counsel, investment advisors, investment
managers, claims administrators, specialists and other persons as the
Administrative Committee deems appropriate in connection with administering the
Plan. The Administrative Committee shall be entitled to rely conclusively upon,
and shall be fully protected in any action taken by them in good faith in
reliance upon any opinions or reports furnished them by any such experts or
other persons.
12.04 EXPENSES.
All expenses incurred in connection with the administration of the Plan,
including, without limitation, administrative expenses and compensation and
other expenses and charges of any person who shall be
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employed by the Administrative Committee pursuant to Section 12.03, shall be
paid from the Trust Fund unless paid separately by the Participating Employers.
12.05 COMPENSATION.
No member of the Administrative Committee who is a full-time employee of a
Participating Employer shall receive any compensation for his services as member
of the Administrative Committee. Any expenses of the Administrative Committee
shall be paid from the Trust Fund, unless paid by the Participating Employers.
12.06 EXERCISE OF DISCRETION.
Any person with any discretionary power in the administration of the Plan shall
exercise such discretion in a nondiscriminatory manner and shall discharge his
duties with respect to the Plan in a manner consistent with the provisions of
the Plan and with the standards of fiduciary conduct contained in Title I, Part
4, of ERISA.
12.07 FIDUCIARY LIABILITY.
In administering the Plan, neither the Administrative Committee nor any member
of the Administrative Committee nor any person to whom the Administrative
Committee delegates any duty or power in connection with administering the Plan
shall be liable, except in the case of his own willful misconduct, for:
(a) any action or failure to act,
(b) the payment of any amount under the Plan,
(c) any mistake of judgment made by him or on his behalf, or
(d) any omission or wrongdoing of any member of the Administrative
Committee. No member of the Administrative Committee shall be
personally liable under any contract, agreement, bond, or other
instrument made or executed by him or on his behalf as a member of the
Administrative Committee.
12.08 INDEMNIFICATION BY PARTICIPATING EMPLOYERS.
To the extent not compensated by insurance or otherwise, the Participating
Employers shall indemnify and hold harmless each person and each member of the
Administrative Committee, and each employee of a Participating Employer
designated by the Administrative Committee to carry out fiduciary responsibility
with respect to the Plan from any and all claims, losses, damages, expenses
(including reasonable counsel fees approved by the Company) and liabilities
(including any amount paid in settlement with the approval of the Company),
arising from any act or omission of such member, except where the same is
judicially determined to be due to willful misconduct of such member or
employee. Anything herein to the contrary notwithstanding, no assets of the
Plan may be used for any such indemnification.
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12.09 PLAN PARTICIPATION BY FIDUCIARIES.
No person who is a fiduciary with respect to the Plan shall be precluded from
being a Participant therein upon satisfying the requirements for eligibility.
12.10 MISSING PERSONS.
If the Administrative Committee is unable to locate a Participant or
Beneficiary within five (5) years after an Account becomes payable, the
Administrative Committee shall mail notice by registered mail to the last known
address of such person outlining the following action to be taken unless such
person makes written reply to the Administrative Committee within sixty (60)
days from the mailing of such notice: the Administrative Committee shall direct
that the amount of such Account shall be treated as a forfeiture for the current
Plan Year; provided, however, that in the event of the subsequent reappearance
of such Participant or Beneficiary prior to the termination of the Plan, such
forfeiture shall be restored to such Account.
12.11 CLAIMS PROCEDURE.
All claims for benefits under the Plan by a Participant or his Beneficiary with
respect to benefits not received by such person shall be made in writing to the
Administrative Committee, which shall review such claims. If the Administrative
Committee believes that a claim should be denied, it shall notify the claimant
in writing of the denial within ninety (90) days after its receipt of the claim.
Such notice shall:
(a) set forth the specific reasons for the denial, making reference to the
pertinent provisions of the Plan or the Plan documents on which the
denial is based;
(b) describe any additional material or information that should be received
before the claim may be acted upon favorably, and explain why such
material or information, if any, is needed; and
(c) inform the person making the claim of his right pursuant to this Section
to request review of the decision by the Administrative Committee.
Any such person who believes that he has submitted all available and relevant
information may appeal and denial of a claim to the Administrative Committee by
submitting a written request for review to the Administrative Committee within
sixty (60) days after the date on which such denial is received. Such period
may be extended by the Administrative Committee for good cause. The person
making the request for review may examine pertinent Plan documents. The request
for review may discuss any issues relevant to the claim. The Administrative
Committee shall decide whether or not to grant the claim within sixty (60) days
after receipt of the request for review, but this period may be extended by the
Administrative Committee for up to an additional sixty (60) days in special
circumstances. If such an extension of time for review is required because of
special circumstances, written notice of the extension shall be furnished to the
claimant prior to the commencement of the extension. The Administrative
Committee's decision shall be in writing, shall include specific reasons for the
decision and shall refer to pertinent provisions of the Plan or of the Plan
documents on which the decision is based.
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ARTICLE 13
AMENDMENT AND TERMINATION OF PLAN
13.01 AMENDMENT.
The Company may at any time and from time to time amend the Plan by action of
the Administrative Committee without the consent of any Trustee, any other
Participating Employer, or any Member or Beneficiary.
Notwithstanding the foregoing:
(a) no amendment that materially affects the Trustee's duties shall be
effective without the written consent of the Trustee;
(b) no amendment shall cause the Trust Fund to be used other than for the
exclusive benefit of Members and their Beneficiaries; and
(c) no amendment shall eliminate or reduce a "Section 411(d)(6) Protected
Benefit" within the meaning of Section 1.411(d)-4 of the Income Tax
Regulations except to the extent permitted by Section 411(d)(6) of the
Code and the regulations thereunder.
13.02 RIGHT TO TERMINATE PLAN.
The Company intends to maintain the Plan as a permanent tax-qualified retirement
plan. Nevertheless, the Company reserves the right to terminate the Plan (in
whole or in part) at any time and from time to time, by action of the
Administrative Committee, without the consent of any Trustee, any other
Participating Employer, or any Member or Beneficiary.
13.03 CONSEQUENCES OF TERMINATION.
(a) If the Plan is terminated in whole or in part, the interest of each
Member affected by the termination in his Account will become fully
vested and nonforfeitable as of the date of the termination.
(b) If the Plan is terminated in whole or in part, the Administrative
Committee shall determine the date and manner of distribution of all
Members' Accounts.
(c) The Administrative Committee shall give prompt notice to each Member
(or, if deceased, his Beneficiary) affected by the Plan's complete or
partial termination.
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ARTICLE 14
PARTICIPATION BY AFFILIATED COMPANIES
14.01 PARTICIPATION.
Subject to the consent of the Administrative Committee, an Affiliated Company
may adopt the Plan and join in the Trust Fund created hereunder. Such
Affiliated Company shall become a Participating Employer upon the filing with
the Administrative Committee such duly executed documents as may be required by
the Administrative Committee. The contributions which may be made by each
Participating Employer, and the income therefrom, shall be held by the Trustee
as a part of a single Trust Fund without allocation to any Participating
Employer until the Administrative Committee shall notify the Trustee of the
termination of the plan as to any Participating Employer pursuant to Section
14.03(c).
14.02 DELEGATION OF POWERS AND AUTHORITY.
A Participating Employer shall be deemed to appoint the Administrative Committee
as its exclusive agent to exercise on its behalf all of the powers and authority
conferred upon the Administrative Committee by the terms of the Plan including,
but not by way of limitation, the power to amend and terminate the Plan and the
Trust Fund created hereunder. The authority of the Administrative Committee to
act as such agent shall continue with respect to all funds contributed by each
Participating Employer and the income therefrom unless and until the amount of
such funds and income has been distributed by the Trustee as provided in Section
14.03.
14.03 TERMINATION OF PARTICIPATION.
(a) The Administrative Committee shall notify the Trustee in writing of the
termination of the Plan as to any Participating Employer, and the
Trustee shall not accept any further contributions under the Plan from
such Participating Employer and shall set aside in a separate account
such part of the Trust Fund as the Administrative Committee shall,
pursuant to paragraph (b), determine to be held for the benefit of
eligible employees of the Participating Employer (and their
beneficiaries), as of the last day of the Plan Year which is such
Participating Employer's termination date under the Plan.
(b) The Administrative Committee shall give written directions to the
Trustee with respect to the part of the assets of the Trust Fund
segregated in a separate account pursuant to paragraph (a). Such
directions shall specify the amount to be segregated and shall be in
accordance with generally accepted accounting principles, and, to the
maximum extent consistent with ERISA, the determination of the fair
market value of the assets of the Trust Fund in the manner provided for
in the Plan shall be conclusive for the purpose of such segregation.
The Trustee shall follow such directions of the Administrative Committee
which shall constitute a conclusive determination of the amount which
should be segregated for the benefit of the eligible employees of such
Participating Employer (and their beneficiaries).
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(c) The Trust shall continue as to any Participating Employer, despite
receipt by the Trustee of notice of termination of the Plan as to such
Participating Employer, for such time as may be necessary to effect such
termination. Upon receipt by the Trustee from the Administrative
Committee of notice to terminate the Trust as to such Participating
Employer, the Trustee shall, with reasonable promptness after receipt of
such notice, arrange for the orderly distribution, in accordance with
written instructions of the Administrative Committee which shall be
given in conformity with the provisions of the Plan and ERISA, of the
assets segregated with respect to such Participating Employer pursuant
to this Article 14.
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ARTICLE 15
TOP-HEAVY PLAN PROVISIONS
15.01 APPLICABILITY.
If the Plan is or becomes Top-Heavy in any Plan Year, the provisions of this
Article 15 shall supersede any conflicting provisions of the Plan.
15.02 DEFINITIONS.
The following definitions shall apply for purposes of this Article 15:
(A) "DETERMINATION DATE" means (i) the last day of the preceding Plan Year, or
(ii) in the case of the first Plan Year, the last day of such Plan Year.
(B) "EMPLOYER" means the Company and all Affiliated Companies.
(C) "KEY EMPLOYEE" means any Employee, or former Employee who is a Key Employee
within the meaning of Section 416(i)(1) of the Code and the regulations
thereunder.
(D) "PERMISSIVE AGGREGATION GROUP" means the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered
as a group with the Required Aggregation Group, would continue to satisfy
the requirements of Sections 401(a)(4) and 410 of the Code.
(E) "REQUIRED AGGREGATION GROUP" means (i) each qualified plan of the Employer
in which at least one Key Employee participates or participated at any time
during the determination period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the Employer which
enables a plan described in clause (i) to meet the requirements of Section
401(a)(4) or 410 of the Code.
(F) "SUPER TOP-HEAVY PLAN" means a Top-Heavy Plan with respect to which the
Top-Heavy Ratio exceeds 90%.
(G) "TOP-HEAVY PLAN" means with respect to any Plan Year, this plan if any of
the following conditions exist:
(i) If the Top-Heavy Ratio for this Plan exceeds 60% and this Plan is
not part of any Required Aggregation Group or Permissive
Aggregation Group of plans;
(ii) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 60%; or
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(iii) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60%.
(H) "TOP-HEAVY RATIO" means as follows:
(i) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer
has not maintained any defined benefit plan which during the 5-
year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan alone or for
the Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the 5-
year period ending on the Determination Date(s), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the 5-
year period ending on the Determination Date(s), both computed in
accordance with Section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution not actually made
as of the determination date, but which is required to be taken
into account on that date under Section 416 of the Code and the
regulations thereunder.
(ii) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more defined benefit plans
which during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any Required or permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans
for all Key Employees, determined in accordance with clause (i)
above, and the present value of accrued benefit under the
aggregated defined benefit plan or plans for all Key Employees as
of the Determination Date(s), and the denominator of which is the
sum of the account balances under the aggregated defined
contribution plan or plans for all participants, determined in
accordance with clause (i) above, and the present value of
accrued benefits under the defined benefit plan or plans for all
participants as of the Determination Date(s), all determined in
accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of any accrued benefit made in the
five-year period ending on the Determination Date.
(iii) For purposes of clauses (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be
determined as of the most recent Valuation Date that falls within
or ends with the 12-month period ending on the Determination
Date, except as provided in Section 416 of the Code and the
regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits
of a participant (A) who is not a Key Employee but who was a Key
Employee in a prior year, or (B) who has not been credited with
at least one
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Hour of Service with any Employer maintaining the plan at any
time during the 5-year period ending on the Determination Date
will be disregarded. The calculation of the Top-Heavy ratio, and
the extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Section 416 of
the Code and the regulations thereunder. Deductible employee
contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans the value
of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year.
The accrued benefits of a participant other than a Key Employee shall be
determined under (A) the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained by the
Employer, or (b) if there is no such method, as if such benefits accrued
not more rapidly than the slowest accrual rate permitted under the
fractional rule of Section 411(b)(1)(C) of the Code.
15.03 VESTING REQUIREMENT AND SCHEDULE.
(A) For any Plan Year during which the Plan is a Top-Heavy Plan, the
following Vesting Schedule shall apply to any Member who has been
credited with an Hour of Service after the Plan initially became a
Top-Heavy Plan:
Years of Service Vested Interest
---------------- ---------------
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(B) If the Plan ceases to be a Top-Heavy Plan, such change shall be considered
to be an amendment of the vesting schedule which is subject to the election
requirements in Section 8.06. In no event may a Member's vested interest
be decreased as a result of a change in the Plan's status.
15.04 MINIMUM CONTRIBUTION.
(A) If a Member is a non-Key Employee on the last day of a Top-Heavy Plan Year,
and is not a participant in any other plan maintained by a Participating
Employer that provides him with such a minimum contribution or with a
comparable minimum accrual, the total of the Employer contribution
allocated to such Member's Account for such Top-Heavy Plan Year shall not
be less than 3% of his Compensation for the Top-Heavy Plan Year, the
Employer has no defined benefit plan which designates the Plan to satisfy
Section 401(a)(4) or Section 410 of the Code and the highest percentage
obtained by dividing the sum of the Employer contribution made for the
benefit of each Key Employee by the Key Employee's
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Compensation for such Year is less than 3%, such highest percentage shall
be substituted therefor in the preceding clause.
(B) In the event a Member who is a non-Key Employee is covered under both a
defined contribution plan and a defined benefit plan maintained by a
Participating Employer, notwithstanding anything herein to the contrary,
the minimum contribution or benefit required by this Section 15.04 and by
Section 416 of the Code shall be deemed satisfied if any one of the
following rules are satisfied:
(i) each such Member receives the defined benefit minimum as
specified in Section 416(c)(1) of the Code;
(ii) the defined benefit minimum (as defined in clause (i), above) is
provided each such Member by the defined benefit plan and is
offset by the benefits provided under the defined contribution
plan;
(iii) the defined contribution plan provides aggregate benefits at
least comparable to those provided by the defined benefit plan;
or
(iv) if contributions and forfeitures under the defined contribution
plan equal 5% of the Compensation for each Top-Heavy Plan.
15.05 COMPENSATION LIMITATION.
For any Plan Year in which the Plan is a Top-Heavy Plan, the compensation
limitation described in Section 416(d) of the Code shall apply.
15.06 AGGREGATE LIMIT ON CONTRIBUTIONS AND BENEFITS FOR KEY EMPLOYEES.
If any one of the following occurs, then 1.0 shall be substituted for 1.25 in
the denominators of the Defined Benefit Plan and Defined Contribution Plan
Fractions used in computing the aggregate limitations set forth in Section 415
of the Code:
(A) A Key Employee participates in both a defined benefit plan and a defined
contribution plan of a Participating Employer and the plans are Super Top-
Heavy Plans.
(B) A Key Employee participates in both a defined benefit plan and a defined
contribution plan of a Participating Employer and the plans are Top-Heavy
Plans and an Extra Minimum Benefit or Extra Minimum Contribution is not
provided for non-Key Employees.
For purposes of this section, Extra Minimum Benefit or Contribution shall mean
1% more than the standard minimum benefit or contribution required for non-Key
Employees under Top-Heavy Plans as prescribed by Section 416(c) of the Code.
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ARTICLE 16
GENERAL PROVISIONS
16.01 TRUST FUND SOLE SOURCE OF PAYMENTS FOR PLAN.
The Trust Fund shall be the sole source for the payment of all Members'
Accounts, and the Plan's liability to make payment to any Member or Beneficiary
shall be limited to the extent that the balance in such Member's Account is
sufficient to make such payment. In no event shall assets of the Participating
Employers be applied for the payment of Plan benefits.
16.02 EXCLUSIVE BENEFIT.
The Plan is established for the exclusive benefit of the Members and their
Beneficiaries, and the Plan shall be administered in a manner consistent with
the provisions of Section 401(a) of the Code and ERISA.
16.03 NON-ALIENATION.
Except as is permitted under Section 401(a)(13) of the Code in the case of a
qualified domestic relations order (as defined in Section 414(p) of the Code) or
in accordance with Article 10, no Member or Beneficiary shall have the right to
alienate or assign his benefits under the Plan, and no Plan benefits shall be
subject to attachment, execution, garnishment, or other legal or equitable
process. If a Member or his Beneficiary attempts to alienate or assign his
benefits under the Plan, or if his property or estate should be subject to
attachment, execution, garnishment or other legal or equitable process, the
Administrative Committee may direct the Trustee to distribute the Member's (or
Beneficiary's) benefits under the Plan to members of his family, or may use or
hold such benefits for his benefit or for the benefit of members of his family
as the Administrative Committee deems appropriate under the circumstances.
16.04 QUALIFIED DOMESTIC RELATIONS ORDER.
(A) All rights and benefits, including elections, provided to a Member in this
Plan shall be subject to the rights afforded to any alternate payee (as
defined in Section 414(p)(8) of the Code) under a qualified domestic
relations order (as defined in Section 414(p) of the Code).
(B) Notwithstanding anything in the Plan to the contrary, a distribution to an
alternate payee shall be permitted if such distribution is authorized by
the qualified domestic relations order without regard as to whether the
affected Member is currently entitled to receive a distribution.
16.05 EMPLOYMENT RIGHTS.
A Participating Employer's right to discipline or discharge its Employees shall
not be affected by reason of any of the provisions of the Plan.
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16.06 RETURN OF CONTRIBUTIONS.
(A) Except as specifically provided in the Plan, under no circumstances shall
any funds contributed to the Trust Fund or any assets of the Trust Fund
ever revert to, or be used by, the Company or any Affiliated Company.
(B) Any contributions made by a Participating Employer may be returned to the
Participating Employer if:
(i) the contribution is made by reason of a mistake of fact; or
(ii) the contribution is conditioned on its deductibility for federal
income tax purposes (each contribution shall be deemed to be so
conditioned unless otherwise stated in writing by the
Participating Employer) and such deduction is disallowed;
provided such contribution is returned within one year of the discovery of
the mistake of fact or the disallowance of the deduction for federal income
tax purposes, as the case may be. The amount of contribution that may be
returned shall be reduced to reflect its proportionate share of any net
investment loss in the Trust Fund.
16.07 MERGER, CONSOLIDATION OR TRANSFER.
The Plan shall not be merged or consolidated with, nor shall any Plan assets or
liabilities be transferred to, any other qualified plan, unless each Member (if
the other plan then terminated) would receive a benefit that is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated).
16.08 APPLICABLE LAW.
Except as otherwise expressly required by ERISA, this Plan shall be construed
and governed in accordance with the laws of the State of New York.
16.09 RULES OF CONSTRUCTION.
Whenever the context so admits, the use of the masculine gender shall be deemed
to include the feminine and vice versa, either gender shall be deemed to include
the neuter and vice versa; and the use of the singular shall be deemed to
include the plural and vice versa.
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APPENDIX A
RULES APPLYING TO PLAN LOANS
The Administrative Committee has adopted the rules and procedures set forth
below with respect to plan loans under Article 9 of the Plan.
CAN I WITHDRAW OR BORROW MONEY FROM THE PLAN PRIOR TO MY TERMINATION OF
EMPLOYMENT?
Because the Plan is basically designed for long term savings, the law restricts
your ability to make withdrawals from the Plan while you are employed.
You may, however, request withdrawals of part or all of the balance in your
VOLUNTARY CONTRIBUTION ACCOUNT at any time subject to the requirements described
in the Summary Plan Description. You also may request a loan from the vested
balance in your EMPLOYER CONTRIBUTION ACCOUNT in certain circumstances subject
to the requirements described below.
WHAT ARE THE REQUIREMENTS FOR BORROWING MONEY FROM THE PLAN?
You may borrow money from the vested balance in your EMPLOYER CONTRIBUTION
ACCOUNT if you meet the following requirements:
- - You must be actively employed and have completed at least 5 YEARS OF
SERVICE.
- - You must establish to the satisfaction of the Administrative Committee that
a loan is needed to meet an immediate and heavy financial need caused by a
SERIOUS ILLNESS, ACCIDENT, OR CATASTROPHE incurred by you or any of the
following individuals:
if the individual received over one-half of their support from you for the
entire twelve month-period prior to the date on which such loan is
requested:
- your spouse, if living with you,
- your sons and daughters, both natural and legally adopted,
- your parents or grandparents, or
- your brothers or sisters, provided that their principal place of
residence prior to the date that the loan is requested is your
household.
- - Such immediate and heavy financial need also may include the need to pay
tuition and related educational fees for the next 12 months of post-
secondary education for your children.
- - You must demonstrate that such need cannot be met by other reasonably
available financial resources of the Member. The Administrative Committee
may require such assurances and
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certifications as it may deem necessary to determine whether the Member has
an immediate and heavy financial need.
HOW DO I APPLY FOR A LOAN?
You may apply for a loan by completing the loan application form(s) provided by
the Plan Administrative Committee.
HOW MUCH CAN I BORROW?
The minimum amount you may borrow is $1,000. The maximum amount you may borrow
is determined by the VESTED amount of your EMPLOYER CONTRIBUTION ACCOUNT as
determined as of the most recent valuation date preceding your loan application.
The following table shows the Maximum Loan Amount that is permitted based on
your vested balance in your EMPLOYER CONTRIBUTION ACCOUNT:
Vested Balance in Your
Employer Contribution Maximum Loan
Account Amount Permitted
---------------------- ----------------
$ 0 - $ 1,999 No loans allowed
$ 2,000 - $ 99,000 50% of the vested account
$ 100,000 or more $ 50,000
If your Maximum Loan Amount from the above table is $50,000, you must add the
highest outstanding total loan balance from the previous 12 months to the amount
of any new loan. This total cannot exceed $50,000.
WHAT IS THE TERM OF THE LOAN?
Loans must be repaid within 5 years or less.
HOW DO I REPAY THE LOAN?
While you are an employee, payments of principal and interest are made through
payroll deductions.
If you take an approved leave of absence, you must be able to continue to repay
the loan through monthly payments of principal and interest. Such payments will
be due on the first day of each calendar month and will be payable only in
United States currency.
The payments will begin with the first full pay period following the date on
which you receive the loan. The repayment amounts will be equal, except for the
final payment.
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WHAT WILL THE INTEREST RATE BE?
Effective for loans made on or after May 1, 1995, the annual interest rate on
loans will be One Percent Plus the Prime Lending Rate stated in the Money Rates
section of THE WALL STREET JOURNAL on the first business day of the month in
which your loan application is approved by the Plan Administrative Committee.
DO I HAVE TO GIVE ANY SECURITY FOR THE LOAN?
Yes. The loan is secured by your vested balance in your EMPLOYER CONTRIBUTION
ACCOUNT. In addition, you will be personally liable for the amount of the loan.
DO I NEED MY SPOUSE'S CONSENT TO OBTAIN A LOAN?
Yes. If you are married (and you are not legally separated or divorced), you
must have your spouse's written notarized consent in order to obtain a loan.
MAY I SPECIFY THE INVESTMENT FUND FROM WHICH I WANT TO BORROW?
Yes.
WHAT HAPPENS TO LOAN REPAYMENTS UNDER THE PLAN?
Repayments of principal AND interest on your loan will be allocated to your Plan
account. Each repayment will be invested according to your current investment
selection when the repayment is made.
CAN I PREPAY THE LOAN?
Yes. There is no penalty if you want to prepay any or all of the unpaid balance
on your loan. However, your minimum prepayment must be at least $1,000 or, if
smaller, the outstanding balance of the loan.
Partial prepayments will first be credited against accrued interest and then
against the outstanding principal on the day your prepayment is received.
WHAT HAPPENS IF I DEFAULT ON LOAN PAYMENTS?
You will be considered to be in default if you miss ANY scheduled loan
repayment.
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Once the loan is declared in default it will become immediately due and payable
as of the last day of the month in which it is declared in default. If you do
not cure the default within 30 days, in addition to any other remedies permitted
by law, any outstanding loan balance (including accrued, but unpaid, interest)
may be charged against your Account under the Plan.
If and to the extent the outstanding loan balance is charged against your Plan
account, the amount of such charge shall be deemed to be a taxable distribution
to you from your Plan account. The Plan Administrative Committee may elect to
charge the unpaid loan balance against your Plan account, as described above,
whether or not you would otherwise be entitled to a distribution from the Plan.
If the unpaid loan amount is treated as a distribution, the taxable portion of
this distribution will be reported to the IRS. You will be responsible for any
taxes due as a result of treating the unpaid amount as a distribution.
If the unpaid balance of the loan cannot be satisfied from your Plan accounts or
wages, the Plan Administrative Committee will have the same legal rights and
remedies as a creditor to collect the remaining amount.
WHAT HAPPENS IF I TERMINATE EMPLOYMENT?
If your employment is terminated for any reason, including death, the loan will
become immediately due and payable in full.
If your Plan account balance is distributed to you at the time of your
termination, the amount to be distributed to you from the Plan will be reduced
by the unpaid loan balance (including accrued interest) UNLESS you elect to
repay the loan in full.
If you decide to delay distribution, you must repay the loan in full and you
must notify the Plan Administrative Committee in writing that you will repay the
loan in full before your termination of employment. If you do not repay the
loan, however, the outstanding loan balance will be treated as a taxable
distribution to you.
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Exhibit 21
Subsidiaries of the Registrant
------------------------------
Percentage
of Voting
Securities
State of Owned By
Incorporation Registrant
------------- -----------
Compupower Corporation Delaware 100%
Value Line Securities, Inc. New York l00%
The Vanderbilt Advertising
Agency, Inc. New York l00%
Value Line Publishing, Inc. New York 100%
Value Line Distribution
Center, Inc. New Jersey 100%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND STATEMENT OF INCOME AND RETAINED EARNINGS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<CASH> 31,752
<SECURITIES> 103,995
<RECEIVABLES> 5,490
<ALLOWANCES> (528)
<INVENTORY> 0
<CURRENT-ASSETS> 143,581
<PP&E> 18,500
<DEPRECIATION> (6,380)
<TOTAL-ASSETS> 333,826
<CURRENT-LIABILITIES> 54,782
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 220,266
<TOTAL-LIABILITY-AND-EQUITY> 333,826
<SALES> 58,509
<TOTAL-REVENUES> 87,127
<CGS> 0
<TOTAL-COSTS> 54,641
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,148,000
<INCOME-PRETAX> 68,384
<INCOME-TAX> 26,670
<INCOME-CONTINUING> 41,714
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<NET-INCOME> 41,714
<EPS-PRIMARY> 4.18
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