MEDLEY MANAGEMENT INC. (Form: 8-K, Received: 10/22/2020 16:45:47)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________

FORM 8-K

_______________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 22, 2020

MEDLEY MANAGEMENT INC.

(Exact name of registrant as specified in its charter)



Delaware	001-36638	47-1130638
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

280 Park Avenue, 6th Floor East

New York, New York 10017

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (212) 759-0777

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	MDLY	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 22, 2020, at the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of Medley Management Inc. (the “Company”) held on such date, the Company’s stockholders approved an amendment to the Company’s 2014 Omnibus Incentive Plan (as so amended, the “Incentive Plan”) to increase the number of awards available for issuance thereunder by 10,000,000 to 19,000,000. The description of the Incentive Plan set forth in Proposal No. 6 as contained in the Company’s definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on September 22, 2020 (the “Proxy Statement”) is incorporated by reference into this Item 5.02 of this Current Report on Form 8-K. The description of the Incentive Plan (including the amendment thereto as approved by the Company’s stockholders at the Annual Meeting) is qualified in its entirety by reference to the complete text of the Incentive Plan, a copy of which is attached to the Proxy Statement as Annex C and is incorporated by reference into this Item 5.02 of this Current Report on Form 8-K.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

As described below in Item 5.07 of this Current Report on Form 8-K, at the Annual Meeting held on October 22, 2020, the Company’s stockholders approved a proposal granting discretionary authority to Company’s Board of Directors (the “Board”) to amend the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect a reverse stock split of the Company’s common stock within a range of 1-for-5 to 1-for-10 to be determined by the Board and with the reverse stock split to be effective at such time and date, if at all, as determined by the Board, but not later than December 26, 2020.

Following the Annual Meeting, on October 22, 2020, the Board determined that it is in the best interests of the Company and its stockholders to implement a reverse stock split of the Company’s common stock at a ratio of one-for-ten (the “Reverse Stock Split”). Accordingly, on October 22, 2020, the Company filed a Certificate of Amendment (the “Reverse Stock Split Certificate of Amendment”) to the Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split.

Pursuant to the Certificate of Amendment, effective as of 5:00 p.m., Eastern Time, on Friday, October 30, 2020 (the “Effective Time”), each ten (10) shares of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), issued and outstanding, immediately prior to the Effective Time, will automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Class A Common Stock. The shares of Class B Common Stock, par value $0.01 per share, will also be adjusted simultaneously in the same manner in the Reverse Stock Split. No fractional shares will be issued as a result of the Reverse Stock Split. Instead, any stockholder who would have been entitled to receive a fractional share of Class A Common Stock as a result of the Reverse Stock Split will receive cash payments in lieu of such fractional shares (without interest and subject to backup withholding and applicable withholding taxes).

The Class A Common Stock will begin trading on a split-adjusted basis on the New York Stock Exchange (the “NYSE”) at the market open on Monday, November 2, 2020. The Class A Common Stock will have a new CUSIP number, 58503T205, although the trading symbol for the Class A Common Stock will remain “MDLY”.

As previously disclosed, the Reverse Stock Split is intended to bring the Company into compliance with the $1.00 minimum average closing share price requirement (the “Minimum Share Price Requirement”) for continued listing on the NYSE. The Company will regain compliance with the Minimum Share Price Requirement if the price per share of the Class A Common Stock promptly exceeds $1.00 per share and remains above that level for at least the following 30 trading days.

On October 22, 2020, the Company also filed another Certificate of Amendment (the “Authorized Share Reduction Certificate of Amendment”) with the Secretary of State of the State of Delaware to implement the amendment to the Certificate of Incorporation approved by the stockholders at the Annual Meeting to decrease the number of authorized shares of all classes of the Company’s common stock and preferred stock (the “Authorized Share Reduction”). The Authorized Share Reduction will become effective simultaneously with the Reverse Stock Split at the Effective Time, and implements a reduction in the number of authorized shares of Class A Common Stock from 3,000,000,000 shares to 5,000,000 shares, a reduction in the number of authorized shares of Class B Common Stock from 1,000,000 shares to 1,000 shares, and a reduction in the number of authorized preferred shares from 300,000,000 shares to 1,000,000 shares.

The foregoing descriptions of the Reverse Stock Split Certificate of Amendment and the Authorized Share Reduction Certificate of Amendment do not purport to be complete and are qualified in their entirety by reference to the complete texts of the Reverse Stock Split Certificate of Amendment and the Authorized Share Reduction Certificate of Amendment, copies of which are filed with this Current Report on Form 8-K as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated into this Item 5.03 of this Current Report on Form 8-K by reference.

Item 5.07. Submission of Matters to a Vote of Security Holders.

At the Annual Meeting, the Company’s stockholders voted on the matters disclosed in the Company’s Proxy Statement. Set forth below are the final voting results for the matters submitted to a vote of stockholders:

Proposal No. 1 - Election of Directors

At the Annual Meeting, the Company’s stockholders elected the persons listed below as directors for a one-year term expiring at the Company’s 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified:



Nominee	Votes Cast For	Votes Withheld	Broker Non-Votes
Brook Taube	264,813,811	230,297	2,888,228
Seth Taube	264,812,738	231,370	2,888,228
John Dyett	264,857,106	187,002	2,888,228
James G. Eaton	264,859,663	184,445	2,888,228
Guy T. Rounsaville, Jr.	264,828,163	215,945	2,888,228

Proposal No. 2 - Ratification of Independent Registered Public Accounting Firm

The Company’s stockholders ratified the appointment of RSM US LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020:



Votes Cast For	Votes Cast Against	Abstentions	Broker Non-Votes
267,637,570	242,699	52,067	—

Proposal No. 3 - Approval of Discretionary Authority to Implement Reverse Stock Split

The Company’s stockholders approved the grant of discretionary authority to the Board to amend the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock within a range of 1-for-5 to 1-for-10 to be determined by the Board and with the reverse stock split to be effective at such time and date, if at all, as determined by the Board, but not later than December 26, 2020:



Votes Cast For	Votes Cast Against	Abstentions	Broker Non-Votes
267,196,864	536,615	198,857	—

Proposal No. 4 - Approval of Authorized Share Reduction Amendment

The Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to decrease the number of authorized shares of all classes of the Company’s common stock and preferred stock as described in the Proxy Statement:



Votes Cast For	Votes Cast Against	Abstentions	Broker Non-Votes
264,997,117	93,945	41,091	2,800,183

Proposal No. 5 - Advisory Approval of Executive Compensation

The Company’s stockholders approved, on an advisory (non-binding) basis, the compensation of the Company’s named executive officers as described in the Proxy Statement:



Votes Cast For	Votes Cast Against	Abstentions	Broker Non-Votes
264,808,445	191,910	43,754	2,888,227

Proposal No. 6 - Approval of Amendment to the 2014 Omnibus Incentive Plan

The Company’s stockholders approved an amendment to the Company’s 2014 Omnibus Incentive Plan to increase the number of awards available for issuance thereunder by 10,000,000 to 19,000,000:



Votes Cast For	Votes Cast Against	Abstentions	Broker Non-Votes
264,719,861	300,642	23,605	2,888,228

Proposal No. 7 - Advisory Say-on-Frequency Vote

In voting on an advisory (non-binding) basis on the frequency of future advisory votes on executive compensation, the option of every “1 year” received the most votes from the Company’s stockholders:



One Year	Two Years	Three Years	Abstentions	Broker Non-Votes
264,939,135	17,604	35,676	51,693	2,888,228

The Company intends to hold the advisory vote on executive compensation on an annual basis.

Item 7.01. Regulation FD Disclosure.

On October 22, 2020, the Company issued a press release announcing implementation of the Reverse Stock Split. A copy of the press release is included with this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.		Description

3.1		Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation implementing the Reverse Stock Split, to be effective as of 5:00 p.m., Eastern Time, on October 30, 2020.

3.2		Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation implementing the Authorized Share Reduction, to be effective as of 5:00 p.m., Eastern Time, on October 30, 2020.

99.1		Press Release dated October 22, 2020.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



MEDLEY MANAGEMENT INC.
By:	/s/ Richard T. Allorto, Jr.
	Name:	Richard T. Allorto, Jr.
	Title:	Chief Financial Officer

Date: October 22, 2020

Exhibit 3.1

CERTIFICATE OF AMENDMENT

TO THE

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

MEDLEY MANAGEMENT INC.

___________________

Pursuant to Section 228 and 242 of

the General Corporation Law of the

State of Delaware

___________________

MEDLEY MANAGEMENT INC. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:

FIRST: Article IV of the Amended and Restated Certificate of Incorporation of the Corporation shall be and hereby is amended by adding the following Section 4.4 to the end thereof:

“Section 4.4. Reverse Stock Split.

(A) Effective as of October 30, 2020 at 5:00 P.M., Eastern Time (the “Effective Time”), (i) each ten (10) shares of Class A Common Stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Class A Common Stock without any further action by the Corporation or the holder thereof, subject to the treatment of fractional share interests as described below and (ii) each ten (10) shares of Class B Common Stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Class B Common Stock without any further action by the Corporation or the holder thereof, subject to the treatment of fractional share interests as described below (clauses (i) and (ii), collectively, the “Reverse Stock Split”). No fractional shares shall be issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares of Class A Common Stock shall be entitled to receive cash (without interest) from the Corporation’s transfer agent in lieu of such fractional share interests upon the submission of a transmission letter by a stockholder holding the shares in book-entry form and, where shares are held in certificated form, upon the surrender of the stockholder’s Certificated Shares (as defined below), in an amount equal to the product obtained by multiplying (a) the closing price per share of the Class A Common Stock as reported on the New York Stock Exchange as of the date of the Effective Time, by (b) the fraction of one share owned by the stockholder. Each certificate that immediately prior to the Effective Time represented shares of Class A Common Stock (the “Certificated Shares”), shall thereafter represent that number of shares of Class A Common Stock into which the shares of Class A Common Stock represented by the Certificated Shares shall have been combined, subject to the elimination of fractional share interests as described above.”

SECOND: This Certificate of Amendment shall become effective as of October 30, 2020 at 5:00 P.M., Eastern Time.

THIRD: This Certificate of Amendment was duly adopted in accordance with Section 242 of the DGCL. The Board of Directors duly adopted resolutions setting forth and declaring advisable this Certificate of Amendment and directed that the proposed amendments be considered by the stockholders of the Corporation. The annual meeting of stockholders of the Corporation was duly called upon notice in accordance with Section 222 of the DGCL and held on October 22, 2020, at which meeting the necessary number of shares were voted in favor of the proposed amendments. The stockholders of the Corporation duly adopted this Certificate of Amendment.

IN WITNESS WHEREOF, the Corporation has caused the Certificate of Amendment to be duly executed in its corporate name as of the 22^nd day of October, 2020.

MEDLEY MANAGEMENT INC.

By: /s/ Richard T. Allorto Jr.

Name: Richard T. Allorto, Jr.

Title: Chief Financial Officer

Exhibit 3.2

CERTIFICATE OF AMENDMENT

TO THE

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

MEDLEY MANAGEMENT INC.

___________________

Pursuant to Section 228 and 242 of

the General Corporation Law of the

State of Delaware

___________________

FIRST: Section 4.1 of Article IV of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as follows:

“4.1

Capitalization. The total number of shares of all classes of stock that the Corporation is authorized to issue is 6,001,000 shares, consisting of (i) 1,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”), (ii) 5,000,000 shares of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), and (iii) 1,000 shares of Class B Common Stock, par value $0.01 per share (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). The number of authorized shares of any of the Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Class A Common Stock, Class B Common Stock or Preferred Stock voting separately as a class shall be required therefor, unless a vote of any such holder is required pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock).”

SECOND: This Certificate of Amendment shall become effective as of October 30, 2020 at 5:00 P.M., Eastern Time.

IN WITNESS WHEREOF, the Corporation has caused the Certificate of Amendment to be duly executed in its corporate name as of the 22^nd day of October, 2020.

MEDLEY MANAGEMENT INC.

By: /s/ Richard T. Allorto Jr.

Name: Richard T. Allorto, Jr.

Title: Chief Financial Officer

Exhibit 99.1

Medley Management Inc. Announces One-for-Ten Reverse Stock Split; Class A Common Stock to Begin Trading on a Split-Adjusted Basis at Market Open on November 2, 2020

NEW YORK, NY, October 22, 2020 /PRNewswire/ -- Medley Management Inc. (NYSE: MDLY) (“MDLY” or the “Company”) announced today that, following the authorization granted by the stockholders at the Company’s 2020 Annual Meeting of Stockholders held on October 22, 2020 (the “Annual Meeting”), the Company’s board of directors (the “Board”) today determined that it is in the best interests of the Company and its stockholders to effect a reverse stock split of its Class A common stock, par value $0.01 per share (the “Class A Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). Accordingly, on October 22, 2020, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, which will be effective at 5:00 p.m., Eastern Time, on Friday, October 30, 2020 (the “Effective Time”).

Pursuant to the Certificate of Amendment, effective as of 5:00 p.m., Eastern Time, on Friday, October 30, 2020 (the “Effective Time”), each ten (10) shares of Class A Common Stock issued and outstanding, immediately prior to the Effective Time, will automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Class A Common Stock. A reverse stock split of the Class B Common Stock will be implemented simultaneously at the same ratio. No fractional shares will be issued as a result of the Reverse Stock Split. Instead, any stockholder who would have been entitled to receive a fractional share of Class A Common Stock as a result of the Reverse Stock Split will receive cash payments in lieu of such fractional shares (without interest and subject to backup withholding and applicable withholding taxes).

As previously disclosed, the Reverse Stock Split is intended to bring the Company into compliance with the $1.00 minimum average closing share price requirement (the “Minimum Share Price Requirement”) for continued listing on the NYSE. The Company will regain compliance with the Minimum Share Price Requirement if the price per share of Common Stock promptly exceeds $1.00 per share and remains above that level for at least the following 30 trading days.

In connection with the Reverse Stock Split, the Company filed another Certificate of Amendment which implements the Authorized Share Reduction simultaneously with the Reverse Stock Split. Also approved by the Company’s stockholders at the Annual Meeting, the Authorized Share Reduction implements a reduction in the number of authorized shares of all classes of the Company’s capital stock, including a reducing the number of authorized shares of Class A Common Stock from 3,000,000,000 shares to 5,000,000 shares.

About Medley

Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. Medley’s national direct origination franchise is a premier provider of capital to the middle market in the U.S. Medley has $3.6 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC) and Sierra Income Corporation, and several private investment vehicles. Over the past 18 years, Medley has provided capital to over 400 companies across 35 industries in North America.⁽¹⁾

Medley LLC, the operating company of Medley Management Inc., has outstanding bonds which trade on the NYSE under the symbols (NYSE:MDLX) and (NYSE:MDLQ). Medley Capital Corporation is listed on the New York Stock Exchange (NYSE: MCC) and has outstanding bonds which trade on the New York Stock Exchange under the symbols (NYSE: MCV) and (NYSE: MCX).

Forward-Looking Statements

This press release contains “forward-looking” statements, including statements regarding the impact of the Reverse Stock Split and the ability of the Company to regain compliance with the NYSE continued listing standards. Such forward-looking statements reflect current views with respect to future events and financial performance. Statements that include the words “should,” “would,” “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “seek,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements in this material or similar statements for purposes of the U.S. federal securities laws or otherwise. Because forward-looking statements, such as the ability of the Company to regain compliance with the NYSE continued listing standards, include risks and uncertainties, actual results may differ materially from those expressed or implied. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, but are not limited to: those discussed in the Company’s filings with the Securities and Exchange Commission; potential volatility in the price of the Class A Common Stock following the Reverse Stock Split, the Company’s ability to comply with the continued listing criteria of the NYSE; and uncertainties associated with the impact from the ongoing COVID-19 pandemic.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the “Risk Factors” and other sections of the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q. The forward-looking statements in this press release represent the Company’s views as of the date of hereof. The Company anticipates that subsequent events and developments will cause its views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company does not have any current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the Company’s views as of any date subsequent to the date of this material.

Available Information

Medley Management Inc.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available at www.mdly.com.

Investor Contact:

Sam Anderson

Head of Capital Markets & Risk Management

Medley Management Inc.

212-759-0777

Media Contact:

Jonathan Gasthalter/Nathaniel Garnick

Gasthalter & Co. LP

212-257-4170

¹ Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, “Medley”). Assets under management refers to assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of June 30, 2020.