Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Gyrodyne Company of America, Inc.
---------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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GYRODYNE COMPANY OF AMERICA, INC.
1 FLOWERFIELD, SUITE 24
SAINT JAMES, NEW YORK 11780
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD ON
December 5, 2007
TO THE SHAREHOLDERS OF GYRODYNE COMPANY OF AMERICA, INC.:
NOTICE IS HEREBY GIVEN, pursuant to the by-laws, that the Annual Meeting of
Shareholders (the "Annual Meeting") of Gyrodyne Company of America, Inc. (the
"Company") will be held at Flowerfield Celebrations, Mills Pond Road, Saint
James, New York 11780, on December 5, 2007 at 11:00 a.m., Eastern Time.
The purpose of the Annual Meeting is to consider and vote upon the following
matters:
1. To elect three (3) directors to a three-year term of office, or until
their successors shall be duly elected and qualified;
2. To ratify the engagement of Holtz Rubenstein Reminick LLP, independent
accountants, as auditors of the Company and its subsidiaries for the
Fiscal Year ending December 31, 2007; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice. By order of the Board of Directors, only shareholders
of record at the close of business on October 22, 2007 are entitled to notice of
and to vote at the Annual Meeting, or any adjournment thereof. Enclosed in this
mailing are the Notice of the 2007 Annual Meeting of Shareholders, Proxy
Statement, Proxy Card and Attendance Registration Form.
To obtain an admittance card for the Annual Meeting, please complete the
enclosed Attendance Registration Form and return it with your Proxy Card. If
your shares are held by a bank or broker, you may obtain an admittance card by
returning the Attendance Registration Form they forwarded to you. If you do not
receive an Attendance Registration Form, you may obtain an admittance card by
sending a written request, accompanied by proof of share ownership, to the
undersigned. For your convenience, we recommend that you bring your admittance
card to the
Annual Meeting so you can avoid registration and proceed directly to the Annual
Meeting. However, if you do not have an admittance card by the time of the
Annual Meeting, please bring proof of share ownership to the registration area
where our staff will assist you.
By Order of the Board of Directors,
Peter Pitsiokos
Corporate Secretary
October 29, 2007
YOUR VOTE IS IMPORTANT
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
HOWEVER, WE ENCOURAGE YOU TO SIGN, DATE AND PROMPTLY RETURN THE PROXY IN THE
ENCLOSED ENVELOPE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING. GIVING
YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING, BUT WILL HELP ASSURE A QUORUM AND AVOID FURTHER PROXY SOLICITATION
COSTS. ATTENDANCE AT THE ANNUAL MEETING IS LIMITED TO SHAREHOLDERS, THEIR
PROXIES AND INVITED GUESTS OF THE COMPANY. FOR IDENTIFICATION PURPOSES, "STREET
NAME" SHAREHOLDERS WILL NEED TO BRING A COPY OF A BROKERAGE STATEMENT REFLECTING
STOCK OWNERSHIP AS OF THE RECORD DATE.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
December 5, 2007
GENERAL
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors (the "Board") of Gyrodyne Company of America, Inc.
("Gyrodyne" or the "Company") for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held Wednesday, December 5, 2007 at 11:00 a.m., Eastern
Time, at Flowerfield Celebrations, Mills Pond Road, Saint James, New York 11780
and at any and all adjournments thereof.
VOTING SECURITIES AND PROXIES
The Board has fixed the close of business on October 22, 2007 as the record date
(the "Record Date") for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting. The securities which may be voted at the
Annual Meeting consist of shares of common stock, par value $1.00 per share, of
the Company (the "Common Stock"). Holders of Common Stock are entitled to one
vote per share. Shareholders do not have cumulative voting rights. It is
necessary for a quorum that record holders of a majority of the shares
outstanding and entitled to vote as of the Record Date be represented by proxy
or in person at the Annual Meeting. The number of shares of Common Stock, the
Company's only authorized class of stock, outstanding on the Record Date was
1,289,878. This Proxy Statement and the enclosed proxy card were mailed starting
on or about October 29, 2007.
At the Annual Meeting, shareholders will consider and vote upon the following
matters: (i) the election of three (3) directors to a three-year term of office,
(ii) the ratification of the engagement of independent accountants for the
Company for the fiscal year ending December 31, 2007, and (iii) such other
matters as may properly come before the meeting.
Proxies solicited by the Board will be voted in accordance with the instructions
given therein. Where no instructions are indicated, proxies will be voted "FOR"
the election of the nominees for director and "FOR" the ratification of the
engagement of independent accountants. Directors shall be elected by a plurality
of the votes cast by the holders of shares entitled to vote in the election. The
proposal to ratify the appointment of independent accountants will be decided by
a majority of the votes cast in favor of or against the proposal by the holders
of shares entitled to vote. A shareholder who abstains from voting on the
proposal to ratify the appointment of independent accountants will be included
in the number of shareholders present at the Annual Meeting for the purpose of
determining the presence of a quorum. Abstentions will not be counted, however,
either in favor of or against the election of the nominees or the proposal to
ratify the appointment of independent accountants. Brokers holding stock for the
accounts of their clients who have not been given specific voting instructions
as to a matter by their clients may vote their clients' proxies in their own
discretion, to the extent permitted under the rules of the National Association
of Securities Dealers. Broker non-votes will be included in determining the
presence of a quorum, but will not be counted in determining whether a matter
has been approved. If you do not return your duly signed proxy card, your shares
cannot be voted unless you attend the Annual Meeting and vote in person or
present a duly signed proxy at the Annual Meeting. Proxies solicited hereby will
be tabulated by inspectors of election designated by the Board of Directors, who
will not be directors or officers of the Company. After the final adjournment of
the Annual Meeting, the proxies will be returned to the Company for safekeeping.
The Company received a letter from Full Value Partners L.P. ("Full Value
Partners"), a shareholder of the Company, in August 2007 which states that at
the 2007 Annual Meeting, Full Value Partners intends to nominate three persons
for election as directors of the Company and also to propose that the Company
terminate its Shareholder Rights Plan. After receiving the letter from Full
Value Partners, the Company indicated to Full Value Partners that in light of
Full Value Partners' significant share ownership position and in order to avoid
the cost and expense of a proxy contest, the Company would be prepared to offer
Full Value Partners one seat on the Board. Full Value Partners rejected this
offer and indicated that it believed it should have more than one seat on the
Board. The Company does not currently know whether Full Value Partners will
nominate such persons or present such proposal at the Annual Meeting. If such
proposal is properly presented at the Annual Meeting, it is intended that the
shares represented by proxies solicited by the Board will be voted "AGAINST"
their proposal to terminate the Shareholder Rights Plan.
The Company's Board of Directors urges you to discard any proxy materials and
proxy card that you may receive from Full Value Partners, and to vote as follows
on the white proxy card enclosed with this Proxy Statement:
"FOR" the Board's nominees for director; and
"FOR" the ratification of Holtz Rubenstein Reminick LLP as the Company's
auditors for 2007.
At the time this Proxy Statement was mailed to shareholders, management was not
aware of any matter other than the matters described above that would be
presented for action at the Annual Meeting. The shares shall be voted in the
discretion of the proxies on such other matters as may properly come before the
meeting or any adjournment thereof.
In addition to sending you these materials, some of the Company's directors and
officers as well as management and non-management employees may contact you by
telephone, mail, e-mail, or in person. You may also be solicited by means of
press releases issued by the Company, postings on the Company's website,
www.gyrodyne.com, and advertisements in periodicals. None of the Company's
officers or employees will receive any extra compensation for soliciting you.
The Company has retained MacKenzie Partners, Inc. to assist the Company in
soliciting your proxy for an estimated fee of $67,500 plus reasonable
out-of-pocket expenses. MacKenzie Partners expects that approximately 25 of its
employees will assist in the solicitation. MacKenzie Partners will ask brokerage
houses and other custodians and nominees whether other persons are beneficial
owners of Gyrodyne common stock. If so, the Company will reimburse banks,
nominees, fiduciaries, brokers and other custodians for their costs of sending
2
the proxy materials to the beneficial owners of Gyrodyne common stock. The
Company's expenses related to the solicitation in excess of those normally spent
for an annual meeting with an uncontested director election and excluding
salaries and wages of the Company's regular employees and officers are expected
to be approximately $270,000, of which approximately $108,000 has been spent to
date. Appendix A sets forth information relating to the Company's directors,
director nominees, officers, and employees who are considered "participants" in
the solicitation under the rules of the SEC by reason of their position as
directors or director nominees or because they may be soliciting proxies on the
Company's behalf.
Any shareholder executing the enclosed proxy has the right to revoke it at any
time prior to its exercise by delivering to the Company a written revocation or
a duly executed proxy bearing a later date, or by attending the Annual Meeting
and voting in person. However, if you are a shareholder whose shares are not
registered in your own name, you will need appropriate documentation from your
record holder to attend the Annual Meeting and to vote personally at the Annual
Meeting.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
IN THIS PROXY STATEMENT
This Proxy Statement and the documents incorporated by reference into this
Proxy Statement contain forward-looking statements about Gyrodyne within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Statements containing the words "believes," "anticipates," "estimates,"
"expects," "intends," "plans," "seeks," "will," "may," "should," "would,"
"projects," "predicts," "continues" and similar expressions or the negative of
these terms constitute forward-looking statements that involve risks and
uncertainties. We intend such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and they are included in this Proxy
Statement for the purpose of invoking these safe harbor provisions. Such
statements are based on current expectations and are subject to risks,
uncertainties and changes in condition, significance, value and effect. Such
risks, uncertainties and changes in condition, significance, value and effect
could cause Gyrodyne's actual results to differ materially from those
anticipated events, such as the effect of economic and business conditions,
risks inherent in the Long Island, New York and Palm Beach County, Florida real
estate markets, the ability to obtain additional capital to develop the
Company's existing real estate and other risks detailed from time to time in the
Company's SEC reports. Except as may be required under federal law, we undertake
no obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur.
3
DISCUSSION OF PROPOSALS TO BE CONSIDERED AT THE ANNUAL MEETING
ELECTION OF DIRECTORS
(Proposal 1)
The By-Laws of the Company provide that there shall be not less than three
(3), nor more than nineteen (19), directors. The Board is divided into three (3)
classes of directors serving staggered terms of office with each class to
consist, as nearly as possible, of one-third of the total number of directors
constituting the entire Board of Directors. Upon the expiration of the term of
office for a class of directors, the nominees for that class are elected for a
three (3) year term to serve until the election and qualification of their
successors. At the Annual Meeting, three (3) directors of the Company are to be
elected to three-year terms, each to serve until his or her successor is elected
and has been qualified. The Board of Directors of the Company has nominated
Ronald J. Macklin, Stephen V. Maroney and Philip F. Palmedo to three (3) year
terms, upon the recommendation of our Nominating Committee. All three nominees
are members of the present Board of Directors of the Company, with terms
expiring at the Annual Meeting. Each properly executed proxy received will be
voted in accordance with the instruction given therein. Where no instructions
are indicated, proxies will be voted "FOR" the election of the foregoing three
(3) nominees as directors to serve three-year terms or until their respective
successors shall be elected and shall qualify. The nominees have consented to be
named as nominees in the Proxy Statement and to serve as directors if elected.
Should any nominee become unable or unwilling to accept a nomination or
election, the persons named in the enclosed proxy will vote for the election of
a nominee designated by the Board.
Information concerning the nominees and continuing directors of the Company,
showing the year when first elected as a director of the Company, the age,
principal occupation and principal affiliations for at least the last five
years, is as follows.
Nominees for Election at the Annual Meeting
-------------------------------------------
Business Experience and Director Term
Name Current Directorships Age Since Expiring
---- --------------------- --- ----- --------
Ronald J. Macklin Assistant General Counsel, National Grid USA, October 45 2003 2007
2003 to present; various positions within the Office
of General Counsel of Keyspan Corporation, 1991 to
October 2003.
4
Business Experience and Director Term
Name Current Directorships Age Since Expiring
---- --------------------- --- ----- --------
Stephen V. Maroney President, CEO and Treasurer of the Company, March 65 1996 2007
14, 1999 to present; Director of real estate
development for the Company, June 1996 to March 1999;
former President of Extebank, a Long Island based
commercial bank.
Philip F. Palmedo Managing Director and Chairman of Kepler Asset 73 1996 2007
Management, 2004 to present; Chairman of the Board,
International Resources Group, 1978 to present;
Director, EHR Investments, 2001 to present;
President, Palmedo Associates, 1980 to present;
Director, Stony Brook Foundation, 1990 until 2005.
Incumbent Directors - Terms Expiring 2008
-----------------------------------------
Business Experience and Director Term
Name Current Directorships Age Since Expiring
---- --------------------- --- ----- --------
Robert H. Beyer Management and Sales Consultant for more than the 74 1977 2008
past five years; Naval Air Systems Command Engineer
prior to retirement in 1998; Captain, United States
Naval Reserves, prior to retirement in 1993;
Technical Representative for the Company's former
helicopter subsidiary until 1973.
Elliot H. Levine Senior member, Levine & Seltzer LLP, certified public 54 2004 2008
accountants, from January 1992 to present.
5
Incumbent Directors - Terms Expiring 2009
-----------------------------------------
Business Experience and Director Term
Name Current Directorships Age Since Expiring
---- --------------------- --- ----- --------
Paul L. Lamb Chairman of the Board of Directors of the Company 62 1997 2009
from March 1999 to present; Partner, Lamb & Barnosky,
LLP since 1984.
Richard B. Smith Vice President, Commercial Banking Division, First 53 2002 2009
National Bank of Long Island, February 2006 to
present; Senior Vice President for Private Banking,
Suffolk County National Bank, May 2000 to February
2005; District Manager for Private Banking, Key Bank,
January 1989 to May 2000; Mayor of the Incorporated
Village of Nissequogue, New York, 2001 to present;
Trustee of Smithtown Historical Society, 1987 to
present; Trustee of St. Catherine's Medical Center,
2003 to present.
Nader G.M. Salour Principal, Cypress Realty of Florida, September 2000 49 2006 2009
to present; President, Abacoa Development Company,
June 1996 to June 2006; Director, Abacoa Partnership
for Community, December 1997 to present.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE NOMINEES FOR DIRECTOR. THIS IS IDENTIFIED AS
ITEM 1 ON THE ENCLOSED PROXY CARD.
------------------------------------------------
The Company's Secretary received a letter dated August 7, 2007 from Full Value
Partners L.P. which states that at the 2007 Annual Meeting, Full Value Partners
intends to nominate three persons (Phillip Goldstein, Timothy Brog and Andrew
Dakos) for election as directors of the Company and to propose that the
Company's Shareholder Rights Plan be terminated.
If you receive proxy solicitation materials and a proxy card from Full Value
Partners, Mr. Goldstein, Mr. Brog or Mr. Dakos, our Board of Directors
recommends that you discard such materials. Our Board urges shareholders not to
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vote for the Full Value Partners' nominees and not to return any proxy cards
sent to shareholders by Full Value Partners or their nominees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders
The following table contains common stock ownership information for
persons, other than the Company's directors and executive officers, known by the
Company to own beneficially more than 5% of the Company's common stock, par
value $1.00 per share (the "Common Stock"), as of October 1, 2007. In general,
beneficial ownership includes those shares that a person has the power to vote,
sell or otherwise dispose of. Beneficial ownership disclosure rules require
registrants to include in common stock ownership information that number of
shares which an individual has the right to acquire within 60 days (such as
stock options) of the date this table was prepared; none of the persons included
in the following table have any such rights. Two or more persons may be
considered the beneficial owner of the same shares. We obtained the information
provided in the following table from filings with the SEC and from information
otherwise provided to the Company. In this Proxy Statement, "voting power" is
the power to vote or direct the voting of shares, and "investment power" is the
power to dispose or direct the disposition of shares.
Type of Number of Percent of
Name and Address Ownership Shares Owned Class
---------------- --------- ------------ -----
Bulldog Investors Beneficial 224,816 (1) 17.43%
Phillip Goldstein
Andrew Dakos
60 Heritage Drive
Pleasantville, NY 10570
Gerard Scollan Beneficial 91,095 (2) 7.06%
80 Browns River Road
Sayville, NY 11782
River Road Asset Management, LLC Beneficial 79,497 (3) 6.16%
462 South Fourth Street, Suite 1600
Louisville, KY 40207
AmTrust Capital Management, Inc. Beneficial 75,959 (4) 5.89%
Jan Loeb
10451 Mill Run Circle
Owings Mills, MD 21117
7
(1) Based upon Amendment No. 7 to Schedule 13D jointly filed with the
Securities and Exchange Commission on August 17, 2007 by Bulldog Investors,
Phillip Goldstein and Andrew Dakos. Bulldog Investors, a group of
investment funds, Phillip Goldstein and Andrew Dakos beneficially own an
aggregate of 224,816 shares of Common Stock or 17.43% of the outstanding
shares. Power to dispose and vote securities resides either with Mr.
Goldstein, Mr. Dakos or with clients.
(2) Includes 88,840 shares of Common Stock held by Lovin Oven Catering of
Suffolk, Inc., of which Mr. Scollan is the majority shareholder.
(3) On February 9, 2007, River Road Asset Management, LLC filed a Schedule 13G
with the Securities and Exchange Commission stating that it is the
beneficial owner, with sole power to dispose or to direct the disposition
of 79,497 shares of Common Stock and the sole power to vote or direct the
vote of 53,572 shares.
(4) On July 17, 2007, AmTrust Capital Management, Inc. and Jan Loeb filed a
Schedule 13G with the Securities and Exchange Commission stating that each
reporting person beneficially owns 75,959 shares of Common Stock with the
sole power to vote or direct the vote and to dispose or direct the
disposition of all shares.
Security Ownership of Directors and Executive Officers
The following table sets forth as of October 1, 2007 the outstanding voting
securities beneficially owned by the directors and executive officers
individually and the number of shares owned by directors and executive officers
as a group. Except as otherwise indicated, each person and each group shown in
the table has sole voting and investment power with respect to the shares of
Common Stock listed next to their name.
Name, Positions with the Amount and Nature of Percentage of
Company and Address Beneficial Ownership (1) Common Stock Owned
------------------- -------------------- ------------------
Stephen V. Maroney, President, CEO, 81,087 (2) 6.29%
Treasurer and Director
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
Paul L. Lamb, Chairman of the Board of 24,364 (3) 1.89%
Directors
c/o Lamb & Barnosky, LLP
534 Broadhollow Road
Melville, NY 11747
Peter Pitsiokos, Chief Operating Officer, 16,175 (4) 1.25%
Chief Compliance Officer and Secretary
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
8
Robert H. Beyer, Director 13,802 (5) 1.07%
10505 Indigo Lane
Fairfax, Virginia 22032
Philip F. Palmedo, Director 12,749 *
4 Piper Lane
St. James, NY 11780
Richard B. Smith, Director 1,000 *
111 Boney Lane
Nissequogue, NY 11780
Nader G.M. Salour 400 *
c/o Cypress Realty of Florida, LLC
1200 University Boulevard
Suite 210
Jupiter, FL 33458
Ronald J. Macklin, Director 200 *
c/o Keyspan Corporate Services
175 E. Old Country Road
Hicksville, NY 11801
Elliot H. Levine, Director 0 *
c/o Levine & Seltzer, LLP
150 East 52nd Street
New York, NY 10022
All Directors and Executive Officers as a
Group (Nine (9) Persons) 149,777 11.61% (6)
* Less than one percent of the total shares of outstanding stock.
(1) For a definition of "beneficial ownership" see "Principal Shareholders."
(2) On March 29, 2007, Stephen V. Maroney filed a Schedule 13D with the
Securities and Exchange Commission stating that he and his spouse jointly
and beneficially own and have shared power to vote and to dispose of 81,087
shares of Gyrodyne stock. Mr. Maroney has pledged 20,000 shares of Common
Stock as security.
9
(3) Includes 14,747 shares held by Lamb & Barnosky, LLP Profit Sharing Trust
and 500 shares held by the Paul L. Lamb, P.C. Defined Benefit Plan. Mr.
Lamb is a Trustee of the Profit Sharing Trust and the Defined Benefit Plan.
(4) Does not include his wife's and minor children's ownership of 1,089 shares
in which he denies any beneficial interest. Mr. Pitsiokos has pledged 3,000
shares of Common Stock as security.
(5) Does not include his wife's ownership of 1,301 shares in which he denies
any beneficial interest.
(6) The percent of class is calculated on the basis of the number of shares
outstanding, which is 1,289,878 as of October 1, 2007.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND MANAGEMENT
Board Meeting Attendance
There were nine regular and special meetings of the Board of Directors
during the eight month transition period ended December 31, 2006. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and meetings held by all committees of the Board on which
such director served during the transition period.
Independence
The majority of the members of the Board of Directors are independent
directors as defined by the listing requirements of the NASDAQ Stock Market.
Such independent directors are Messrs. Beyer, Lamb, Levine, Macklin, Palmedo,
Salour and Smith.
Committees
The Board of Directors of the Company has established the following
committees:
The Company has a separately-designated standing Audit Committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act, and its
current members are Messrs. Smith (Chairman), Levine and Macklin. The Audit
Committee meets with the Company's independent auditors quarterly to review
financial results, audited financial statements, internal financial controls and
procedures and audit plans and recommendations. The Audit Committee also
recommends the selection, retention or termination of the Company's independent
auditors, approves services to be provided by the independent public accountants
and evaluates the possible effect the performance of such services will have on
the accountants' independence. The Company has adopted a written charter for the
Audit Committee, which is available on the Company's website, www.gyrodyne.com.
All of the members of the Audit Committee are independent directors as defined
by the listing requirements of the NASDAQ Stock Market. The Audit Committee met
seven (7) times during the eight month transition period ended December 31,
2006. All members of the Audit Committee are "financially literate" and have
10
been determined to be "independent" within the meaning of SEC regulations and
NASDAQ rules. The Board has determined that at least one member, Mr. Levine, a
certified public accountant, qualifies as an "audit committee financial expert"
as a result of relevant experience as a partner in the accounting firm of Levine
& Seltzer, LLP, over ten years of accounting experience as a partner and
director of taxes at Leslie Sufrin & Co. P.C. and several other years of
experience in the field of public accounting.
The Compensation Committee of the Company's Board of Directors consists of
directors Ronald Macklin (Chairman), Nader Salour and Philip Palmedo all of whom
the Board has determined are independent pursuant to NASDAQ rules. The
Compensation Committee oversees and administers the Company's executive
compensation programs and is therefore responsible for establishing guidelines
and making recommendations for all compensation paid to executive officers. The
Compensation Committee does not have a charter. The Company's compensation
policies for executives are intended to further the interests of the Company and
its shareholders by encouraging growth of its business through securing,
retaining and motivating management employees of high caliber who possess the
skills necessary for the development and growth of the Company. The Compensation
Committee also negotiates the terms of all employment contracts with executive
officers which include compensation arrangements designed to reward management
for achieving certain performance goals and which are revisited on an as needed
basis. The Compensation Committee did not meet during the eight month transition
period ended December 31, 2006.
The Nominating Committee consists entirely of non-employee directors and
recommends guidelines to the Board regarding the size and composition of the
Board and criteria for the selection of nominees. It also recommends the slate
of director nominees to be included in the Proxy Statement and recommends
candidates for vacancies which may occur. The Nominating Committee has a written
charter, which is available on the Company's website, www.gyrodyne.com. Each
member of the Nominating Committee is an independent director as defined by the
listing standards of the NASDAQ Stock Market. The Nominating Committee will
accept for consideration shareholders' nominations for directors if made in
writing. The nominee's written consent to the nomination and sufficient
background information on the candidate must be included to enable the Committee
to make proper judgments as to his or her qualifications. Nominations must be
addressed to the Secretary of the Company at the Company's headquarters and must
be received no later than the deadline for submissions of shareholders'
proposals in order to be considered for the next annual election of directors.
The Nominating Committee believes that having directors with relevant experience
in business and industry (in particular, the real estate industry) is beneficial
and the Committee seeks to monitor the skills and experience of the Company's
directors. All identified candidates, including shareholder-proposed candidates,
are evaluated by the Committee using generally the same methods and criteria,
although those methods and criteria are not standardized and may vary from
time-to-time. The Company typically engages the services of third parties to
perform background examinations of potential nominees, for which the Company
pays a fee, in order to assist the Nominating Committee in its evaluation. The
Committee met twice during the eight month transition period ended December 31,
2006 and its members currently are Mr. Beyer (Chairman), Mr. Levine and Mr.
Smith.
11
Communication with the Board of Directors
The Board does not currently provide a process for shareholders to send
communications to the Board or any of the directors. The Company believes that
senior management, as opposed to individual directors, provides the public voice
of the Company, and that shareholders can effectively communicate with the
Company by contacting the management of the Company through either regular mail,
email or in person. Shareholders also have meaningful access to the Board
through the shareholder proposal process, which is described below.
Attendance Policy for Directors at Annual Shareholder Meetings
The Company encourages, but does not require, all of its directors to
attend annual shareholders meetings of the Company. Last year all of the
directors were in attendance at the annual meeting of the Company's
shareholders.
REPORT OF THE AUDIT COMMITTEE
This Report of the Audit Committee of the Board of Directors does not
constitute soliciting material and shall not be deemed filed or incorporated by
reference into any of the Company's other filings under the Securities Exchange
Act of 1934, except to the extent that we specifically incorporate this Report
by reference in such other filings. Pursuant to rules of the Securities and
Exchange Commission (the "SEC") and the National Association of Securities
Dealers, Inc., the Audit Committee of Gyrodyne Company of America, Inc. has
issued the following report and affirmed that:
(i) We have reviewed and discussed with management the audited financial
statements for the eight month transition period ended December 31, 2006.
(ii) We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 pertaining to
communications with Audit Committees, as may be modified or supplemented.
(iii) We have received from the Company's independent accountants the written
disclosures and the letter regarding the auditors' independence as required
by Independence Standards Board Standard No. 1 and we have discussed with
the independent accountant their independence with respect to the Company.
(iv) Based on the review and discussions referred to above, we recommended to
the Board that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the eight month transition period
ended December 31, 2006 for filing with the SEC.
(v) All of the members of the Company's Audit Committee qualify as being
independent as defined in the applicable listing standards issued by
NASDAQ.
12
(vi) The Board of Directors has adopted a written charter for the Audit
Committee.
Members of the Committee
------------------------
Richard B. Smith (Chairman)
Elliot H. Levine
Ronald J. Macklin
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES WHO ARE NOT DIRECTORS
Peter Pitsiokos, age 48, has served as Executive Vice President and
Secretary for more than the past five years, as Chief Operating Officer and
Chief Compliance Officer since 2004 and as General Counsel from November 1992
until 2004. Mr. Pitsiokos was formerly the Executive Assistant District Attorney
in Suffolk County, New York. He also served as the Assistant Director of
Economic Development and the Director of Water Resources in the Town of
Brookhaven.
Frank D'Alessandro, age 61, joined the Company in March 1997 as its
Controller. Prior to joining the Company, he was Controller of Cornucopia Pet
Foods Inc., a distributor of all natural pet foods. Previous to that he spent
many years in various financial positions. Mr. D'Alessandro holds an MBA degree
in Finance as well as a BBA in Accounting, both from Hofstra University.
EXECUTIVE COMPENSATION
(a) COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis ("CD&A) describes the Company's
compensation philosophy and policies as they apply to the Company's named
executive officers, who are Stephen V. Maroney, President, Chief Executive
Officer and Treasurer, and Peter Pitsiokos, Executive Vice President, Chief
Operating Officer, Chief Compliance Officer and Secretary. The CD&A explains the
structure and rationale associated with each material element of the named
executive officers' total compensation, and it provides important context for
the more detailed disclosure tables and specific compensation amounts provided
following the CD&A.
Objectives of the Company's Compensation Program
The Company's compensation program for executives is intended to motivate and
retain key executives to manage the business affairs of the Company in the best
interests of the Company and its shareholders. Beginning in 2006, the overriding
objective of the Company's executive compensation program has been to
incentivize management to carry out the Company's strategic plan for the future
direction of the Company. The goal of the strategic plan, which was first
announced at the Company's annual shareholders meeting in December 2005, is to
position the Company so that it is best able to achieve one or more shareholder
liquidity events in a reasonable period of time that would put the maximum
amount of cash or marketable securities in the hands of the Company's
13
shareholders in a tax efficient manner. The plan calls for achieving this
objective by pursuing a conversion to a real estate investment trust ("REIT"),
disposition and redeployment of the assets of the Company in a tax efficient
manner, maximization of the value for the remaining 68 acres at Flowerfield, and
vigorous pursuit of maximum value from the State of New York for the 245.5 acres
of Flowerfield taken by eminent domain. The Company believes that its executive
compensation arrangements align executives' incentives with the creation of
shareholder value.
What the Company's Compensation Program is Designed to Reward
The Company's compensation program is designed to reward its executive officers
for their contributions in implementing the Company's strategic plan, consisting
of the following:
o Redevelopment of the remaining 68 acre parcel not taken in
condemnation by the State University of New York ("SUNY").
o Investing the $26.3 million received by the Company as an advanced
payment for the taking of approximately 246 acres by SUNY in REIT
qualified short term liquid investments and in real estate assets
consistent with the benefits of a tax efficient exchange under section
1033 of the Internal Revenue Code.
o Prosecution of litigation with SUNY in the Court of Claims for just
compensation for the property taken by eminent domain.
o Monitoring the Company's limited partnership interest in Callery-Judge
Grove, L.P. which owns a 3,500+ acre citrus grove in Florida which is
the subject of a major development plan.
o Effective management of the Company's rental properties.
The Company's compensation program is also designed to reward its executive
officers for increasing rental income and reducing costs of operation.
Role of the Compensation Committee
The Executive Compensation Committee (the "Compensation Committee") oversees and
administers the Company's executive compensation programs and is therefore
responsible for establishing guidelines for all compensation paid to executive
officers. The Compensation Committee recognizes that a variety of events and
circumstances might influence an individual's performance or that of the Company
itself. As a result, the Compensation Committee carefully considers all relevant
events and circumstances in making its compensation decisions in order to ensure
that the appropriate relationship exists between executive compensation and
corporate performance. The Compensation Committee consists entirely of
non-employee directors and its members currently are Ronald J. Macklin
(Chairman), Philip Palmedo and Nader G.M. Salour. No member of the Compensation
Committee is or was formerly an officer or employee of the Company or any of its
subsidiaries. The Compensation Committee is responsible for making
14
recommendations to the Board with respect to compensation for executive officers
and the Company's incentive compensation plan. The Committee also negotiates the
terms of all employment contracts with executive officers which include
compensation arrangements designed to reward management for achieving certain
performance goals and which are revisited on an as needed basis.
Compensation Components
The Company's executive compensation program consists of three key elements:
base salary, discretionary bonus and incentive compensation upon a
change-in-control. The executive officers have also received stock options under
the Company's incentive stock option plan which expired in October 2003. All
options authorized under the plan have been granted, and all such options have
either expired or been exercised as of March 20, 2007. The Company is not
currently evaluating or proposing the establishment of any new stock option or
long-term incentive plans.
Base Salary
The Compensation Committee determines the base salary of each named executive
officer based on his position and responsibility. In setting and adjusting base
salary levels for each individual executive, the Compensation Committee
considers factors such as the executive's scope of responsibility, the
executive's performance, the performance of the Company, future potential and
the executive's total compensation, both individually and relative to each
other. In making salary decisions, the Compensation Committee exercises its best
judgment using no specific weights for the previously discussed factors. The
Compensation Committee historically has not considered benchmarks of comparable
positions at other companies because it does not believe there are companies
similarly situated with the Company that would provide meaningful comparisons.
The Committee typically considers base salary levels annually as part of its
review of performance and from time to time upon a promotion or other change in
job responsibilities. Based primarily upon the Compensation Committee's
recommendations, the Board approved as of January 1, 2006, base salary for the
Company's two executive officers, Stephen Maroney and Peter Pitsiokos, in the
amount of $220,000 (an increase of $10,500) and $160,790 (an increase of
$8,290), respectively.
Discretionary Bonus
The cash bonus component of executive compensation reflects the Company's belief
that a portion of overall compensation should be discretionary and linked to
performance. Annual discretionary cash bonus awards are intended to reward
achievement of stated corporate and personal performance goals and provide an
incentive for prospective performance. Achievement of these performance goals is
measured by progress made in advancing the components of the Company's strategic
plan, namely conversion to a REIT, redeployment of the Company's assets in a tax
efficient manner, implementation of the Company's redevelopment plans for the
remaining 68 acres at Flowerfield and pursuit of maximum value from the State of
New York for the 245.5 acres of Flowerfield taken by eminent domain. As of
January 1, 2006, the Board approved, based primarily upon the recommendation of
the Compensation Committee, cash bonuses of $11,000 and $8,290 for Mr. Maroney
and Mr. Pitsiokos, respectively, which were paid on or prior to February 15,
2006.
15
Incentive Compensation Upon a Change-in-Control
The Company established an incentive compensation plan in 1999 (the "1999 Plan")
for all full-time employees and members of the Board. The rationale for
establishment of the 1999 Plan was that providing severance in a
change-in-control situation is beneficial to shareholders because it encourages
management and the Board to remain impartial when evaluating a transaction that
may be beneficial to shareholders yet could negatively impact the continued
employment or board position of an executive or director, and that it promotes
long term value maximization. Except in the case of death, the benefits of the
1999 Plan are realized only upon a change-in-control of the Company.
Change-in-control is defined as the accumulation by any person, entity or group
of 30% or more of the combined voting power of the Company's voting stock or the
occurrence of certain other specified events. In the event of a
change-in-control, the 1999 Plan provides for a cash payment equal to the
difference between the 1999 Plan's "establishment date" price of $15.39 per
share and the per share price of the Common Stock on the closing date,
equivalent to 110,000 shares of Common Stock, such number of shares and
"establishment date" price per share subject to adjustments to reflect changes
in capitalization. The payment amount would be distributed to eligible
participants based upon their respective weighted percentages (ranging from 0.5%
to 18.5%). Messrs. Maroney and Pitsiokos are currently entitled to 18.5% and
13.5%, respectively, of any distribution under the 1999 Plan with the balance
being distributable to other eligible employees (11.5%), members of the Board of
Directors (52.5%) and the Chairman of the Board (4%). There are currently
110,000 units granted under the 1999 Plan, equal to 110,000 shares of Common
Stock. A participant would also be entitled to a payment on the spread of their
units in the event of death. The Compensation Committee has been considering the
application of Section 409A of the Internal Revenue Code to the 1999 Plan and
expects to continue to evaluate the 1999 Plan to determine if any changes are
required by December 31, 2007 in order to comply with the provisions of Section
409A.
Stock Option Plan
In 1993, the Company's shareholders adopted a Stock Incentive Plan (the "Stock
Plan") under which participants could be granted incentive stock options
("ISOs"), non-qualified stock options ("NQSOs") and stock grants. The purpose of
the Stock Plan was to promote the overall financial objectives of the Company
and the shareholders by motivating those persons selected to participate in the
Stock Plan to achieve growth in shareholder value and retain the association of
those individuals who were perceived as important in achieving the growth of the
Company. The Stock Plan expired in 2003. There are no remaining shares or rights
available for issuance under the Stock Plan. No options or stock grants were
available for granting in 2006.
16
Severance and Change in Control Benefits
The executive officers are covered by employment agreements which specifically
provide for a severance payment equivalent to three years salary and certain
other benefits as outlined in the table below in the event of a change in
control, termination by the Company without cause, or by the executive officer
for good reason. Under the terms of each employment agreement, the executive
officer's employment term is extended at the end of each day, to automatically
add an additional day, so that the remaining three-year employment term is
always outstanding. Nevertheless, the employment term terminates three years
after delivery of written notice by either the Company or the executive officer
to the other party.
The primary reasons for providing severance and change-in-control benefits for
the executive officers are to retain the executives and their talents and to
encourage them to remain impartial when evaluating a transaction that may be
beneficial to shareholders yet could negatively impact continued employment. As
a result of the enactment of Section 409A of the Internal Revenue Code, the
Company may seek to modify the employment agreements so that they are in
compliance.
Employment Agreements
The Company is a party to an Employment Agreement with each of Mr. Maroney and
Mr. Pitsiokos. The Employment Agreements provide for an annual base salary and
discretionary annual incentive cash bonuses and/or stock option awards which are
no longer available. The Agreements provide for a severance benefit over a
prescribed term in the event an executive is terminated, if their duties are
materially changed, or in connection with a Change-In-Control. The Agreements
also provide that no severance benefit is due in the event of a voluntary
termination or a termination of employment for Cause. Cause includes fraud,
dishonesty, embezzlement, willful failure of the executive officer to follow
directions of the Board, or any willful misconduct, criminal conviction,
unexcused absence or similar conduct or activities. Mr. Pitsiokos would also
have use of a Company car until the third anniversary following termination. The
executives' employment term is extended at the end of each day, to automatically
add an additional day, so that the remaining three-year employment term is
always outstanding. The Employment Agreements may be terminated in the event of
death or disability. An executive officer may terminate the Agreement at any
time upon one years' prior written notice, or upon ten days prior notice if for
Good Reason. Good Reason includes a material change in an executive's duties,
relocation of the corporate headquarters outside 25 miles of its current
location, and breach of any material term of the Agreement. The executive
officer may also terminate employment upon 30 days written notice within three
months following a Change-In-Control. Change-In-Control means the occurrence of
any one of the following events: a change in the composition of the Board of
Directors of the Company from its composition on the date the Agreement was
executed such that more than one-third of the directors have changed; the sale
or transfer of shares of the Company such that there is a change in the
beneficial ownership by more than 30% of the voting shares of the Company; the
sale of a substantial portion of the Company's assets; or the Board of
Directors' approval of a liquidation or dissolution of the Company. In the event
of a termination without Cause, for Good Reason, or upon a Change-In-Control, a
three-year severance benefit is paid in a single lump sum payment. The
Employment Agreements also provide for the following additional severance
benefits:
17
o The executive, spouse and dependents receive medical, hospitalization,
dental and life insurance coverage in effect on the date of
termination for 3 years under Company plans. If Company plans may not
be continued, the Company must arrange to provide the parties with an
economic equivalent of the benefits they would otherwise have been
entitled to, provided further that such benefits terminate on the date
or dates an executive become "eligible" to receive equivalent
coverage.
o Any unreimbursed business expenses.
o For one year, the Company shall provide the cost of office space and
pay the salary of an administrative assistant, consistent with the
office and administrative assistant provided prior to termination.
o Any other rights, compensation and/or benefits under any other
agreements, plans, etc.
o Any accrued unpaid bonuses including a prorated amount which would be
considered to have been earned if the executive had remained employed
through the then current fiscal year.
Providing severance and Change in Control benefits for the executives is
primarily designed to retain key management personnel. As a result of the
enactment of Section 409A, the Company will look to modify the Employment
Agreements so that they are in compliance with that statute.
Pension Plan
The Company maintains the Gyrodyne Company of America, Inc. Pension Plan, which
is a traditional defined benefit pension plan. The Pension Plan is believed to
provide a reasonable benefit for the executives and all other employees. The
Plan is adequately funded and is believed to provide a reasonable retirement
benefit for the executive group. The Company does not maintain any nonqualified
deferred compensation programs (other than the Incentive Plan) or any qualified
Profit Sharing or Section 401(k) Plans intended to qualify under Sections 401(a)
and 501(a) of the Internal Revenue Code.
Perquisites and Other Compensation
During the fiscal year ended December 31, 2006, Mr. Pitsiokos received use of a
company car. Both executives received company health insurance and other
benefits. No significant perks are otherwise provided to the executives. The
Company does not currently provide any short-term or long-term disability
benefits. The Committee intends to maintain the existing executive benefits and
perks. However, the Committee may, in its discretion, revise, amend or increase
any executive perks as it deems appropriate.
18
Equity Ownership Guidelines
The Company does not currently maintain any equity ownership guidelines for the
executive officers or directors. However, the executive officers and directors
as a group hold shares constituting 11.60% of the Company's outstanding shares.
(b) Executive Compensation
During the eight months ended December 31, 2006 and fiscal years ended April 30,
2006, April 30, 2005, and April 30, 2004, two directors or officers received
remuneration in excess of $100,000 in such capacity. The following table sets
forth the total compensation paid or accrued by the Company for services
rendered during the aforementioned periods to each of the Company's Chief
Executive Officer and Chief Operating Officer:
SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------------------------
Change in
Pension
Value and
Non-equity Nonqualified
Incentive Deferred
Stock Option Plan Compensation All Other
Name and Principal Salary Bonus Awards Awards Compensation Earnings Compensation Total
Position Year ($) ($) ($) ($) ($) ($) ($) ($)
-----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
-----------------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney 2006(A) 148,077 0 0 0 0 74,327 0 222,404
------------------------------------------------------------------------------------------------------------------------------------
President and CEO 2006 213,207 11,000 0 0 0 41,442 41,685 (B) 307,334
------------------------------------------------------------------------------------------------------------------------------------
2005 209,500 0 0 0 0 66,938 29,688 (B) 306,126
------------------------------------------------------------------------------------------------------------------------------------
2004 209,500 0 0 295,225(C) 0 84,800 49,628 (B) 639,153
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Peter Pitsiokos 2006(A) 108,224 0 0 0 0 48,322 484 (D) 157,030
------------------------------------------------------------------------------------------------------------------------------------
COO and Secretary 2006 155,370 8,290 0 0 0 12,565 484 (D) 176,709
------------------------------------------------------------------------------------------------------------------------------------
2005 152,500 10,000 0 0 0 47,632 484 (D) 210,616
------------------------------------------------------------------------------------------------------------------------------------
2004 152,500 0 0 227,745(C) 0 80,798 70,672 (E) 531,715
------------------------------------------------------------------------------------------------------------------------------------
(A) Eight months ended December 31, 2006.
(B) In the fiscal years ended April 30, 2006 and April 30, 2005, Mr. Maroney
exercised 1,375 director options and received an equal number of shares with a
value of $41,685 and $29,688, respectively. In the fiscal year ended April 30,
2004, Mr. Maroney exercised 4,125 director options and received an equal number
of shares with a value of $49,628. The Registrant has concluded that aggregate
19
amounts of perquisites and other personal benefits, securities or property to
any of the current executives are less than $10,000 and that the information set
forth in tabular form above is not rendered materially misleading by virtue of
the omission of such personal benefits.
(C) Represents intrinsic value of 17,500 and 13,500 stock options at $16.87 per
share for Messrs. Maroney and Pitsiokos, respectively.
(D) Annual life insurance premium paid by the Company in the amount of $484. The
Registrant has concluded that aggregate amounts of perquisites and other
personal benefits, securities or property to any of the current executives are
less than $10,000 and that the information set forth in tabular form above is
not rendered materially misleading by virtue of the omission of such personal
benefits.
(E) In the fiscal year ended April 30, 2004, Mr. Pitsiokos exercised 6,600
options with SAR's and received 2,922 shares with a value of $70,188. Amount
shown in table also includes annual life insurance premium paid by the Company
in the amount of $484. The Registrant has concluded that aggregate amounts of
perquisites and other personal benefits, securities or property to any of the
current executives are less than $10,000 and that the information set forth in
tabular form above is not rendered materially misleading by virtue of the
omission of such personal benefits.
The Company's Stock Incentive Plan expired in 2003. Accordingly, there were no
Option/SAR Grants issued to any directors or officers during the eight months
ended December 31, 2006.
OUTSTANDING EQUITY AWARDS AT 2006 YEAR-END
The following table sets forth information regarding each unexercised option
held by each of our named executive officers as of December 31, 2006:
-------------------------------------------------------------------------------
Number of Number of Option Option
securities securities exercise expiration
underlying underlying price date
unexercised unexercised ($)
options (#) options (#)
Name exercisable unexercisable
-------------------------------------------------------------------------------
Stephen V. Maroney 13,750 - 16.162 04/09/07
-------------------------------------------------------------------------------
3,300 - 15.938 08/12/07
-------------------------------------------------------------------------------
17,055 - 15.680 10/29/07
-------------------------------------------------------------------------------
17,500 - 16.870 05/13/08
-------------------------------------------------------------------------------
OPTION EXERCISES
The following table sets forth information regarding options exercised by our
named executive officers for the twelve months ended April 30, 2006.
20
---------------------------------------------------------------------
Number of Value Realized on
Shares Acquired by Exercise
Exercise ($)
Name (#)
---------------------------------------------------------------------
Stephen V. Maroney 12,925 385,586
---------------------------------------------------------------------
There were no options exercised by our named executive officers during the eight
months ended December 31, 2006.
The following table sets forth information regarding pension benefits held by
each of our named executive officers as of December 31, 2006:
PENSION BENEFITS
-----------------------------------------------------------------------------------------------------------
Name Plan Name Number of Years Present Value Payments
Credited Service of Accumulated During Last
(#) Benefit FY
($)(A) ($)
-----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
-----------------------------------------------------------------------------------------------------------
Stephen V. Maroney Gyrodyne Company of America, Inc. 7 346,539 0
Pension Plan
-----------------------------------------------------------------------------------------------------------
Peter Pitsiokos Gyrodyne Company of America, Inc. 13 266,348 0
Pension Plan
-----------------------------------------------------------------------------------------------------------
21
The following table sets forth information regarding pension benefits held by
each of our named executive officers as of April 30, 2006:
PENSION BENEFITS
-----------------------------------------------------------------------------------------------------------
Name Plan Name Number of Years Present Value Payments
Credited Service of Accumulated During Last
(#) Benefit FY
($)(A) ($)
-----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
-----------------------------------------------------------------------------------------------------------
Stephen V. Maroney Gyrodyne Company of America, Inc. 6 272,212 0
Pension Plan
-----------------------------------------------------------------------------------------------------------
Peter Pitsiokos Gyrodyne Company of America, Inc. 12 218,026 0
Pension Plan
-----------------------------------------------------------------------------------------------------------
(A) The amounts presented in this column reflect the present value of each named
executive officer's accumulated benefits under the Pension Plan. See pages F-16
to F-18 of our Annual Report on Form 10-K for the eight months ended December
31, 2006 for a description of the valuation method and material assumptions
applied in quantifying the actuarial present value of the accrued benefits under
the Pension Plan.
Nonqualified Deferred Compensation Benefits
The executive officers are not entitled to any deferred compensation benefits.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination. Based upon existing conditions as of
December 2006, the following table summarizes the estimated payments and
benefits payable to each of the executive officers upon a termination of
employment by the Company without Cause or by the officer for Good Reason (which
includes a material change in the officer's duties, the relocation of the
Company's office outside a 25 mile radius of its current office and the
Company's breach of any material term of such officer's employment agreement
with the Company), assuming the termination occurred on December 31, 2006:
22
Stephen Maroney Peter Pitsiokos
--------------- ---------------
Severance payment $ 660,000 $ 482,370
Health insurance 52,623 81,594
Life insurance 1,494 2,946
Auto/travel allowance 3,180 61,541
Office space & admin. assistant 55,500 55,500
-------------------------------------
Total $772,797 $683,951
=====================================
Potential Payments Upon a Change in Control. Based upon existing conditions
as of December 2006, the following table summarizes the estimated payments and
benefits payable to each of the executive officers upon a change in control
assuming the change in control occurred on December 31, 2006:
Stephen Maroney Peter Pitsiokos
--------------- ---------------
Severance payment $ 660,000 $ 482,370
Incentive compensation plan 948,514 692,159
Health insurance 52,623 81,594
Life insurance 1,494 2,946
Auto/travel allowance 3,180 61,541
Office space & admin. assistant 55,500 55,500
-------------------------------------
Total $1,721,311 $1,376,110
=====================================
(c) Compensation of Directors
Each Director is entitled to receive a fee of $12,000 a year, $1,000 per Board
meeting attended and $500 for each Committee meeting attended and is reimbursed
for travel and Company business related expenses. In addition, the Chairman of
the Board is entitled to receive a Chairman's fee of $24,000 a year which
commenced in September, 2004. The Company continued its policy which states that
directors who are also employees of the Company do not receive any additional
compensation for their services as directors.
The following table shows the compensation earned by each of our non-officer
directors for the eight months ended December 31, 2006:
23
---------------------------------------------------------------------------------------------------------------------------------
Name Fees Earned Stock Option Non-Equity Change in All Other Total
or Paid in Awards Awards Incentive Pension Compensation ($)
Cash ($) ($) Plan Value and ($)
($) Compensation Nonqualified
($) Deferred
Compensation
Earnings
(a) (b) (c) (d) (e) (f) (g) (h)
---------------------------------------------------------------------------------------------------------------------------------
A Paul L. Lamb 32,000 0 0 0 0 0 32,000
---------------------------------------------------------------------------------------------------------------------------------
B Robert H. Beyer 17,500 0 0 0 0 0 17,500
---------------------------------------------------------------------------------------------------------------------------------
C Philip F. Palmedo 16,500 0 0 0 0 0 16,500
---------------------------------------------------------------------------------------------------------------------------------
D Elliot H. Levine 16,500 0 0 0 0 0 16,500
---------------------------------------------------------------------------------------------------------------------------------
E Richard B. Smith 20,500 0 0 0 0 0 20,500
---------------------------------------------------------------------------------------------------------------------------------
F Ronald J. Macklin 20,000 0 0 0 0 0 20,000
---------------------------------------------------------------------------------------------------------------------------------
G Nader G.M. Salour 7,000 0 0 0 0 0 7,000
---------------------------------------------------------------------------------------------------------------------------------
The following table shows the compensation earned by each of our non-officer
directors for the twelve months ended April 30, 2006:
---------------------------------------------------------------------------------------------------------------------------------
Name Fees Earned Stock Option Non-Equity Change in All Other Total
or Paid in Awards Awards Incentive Pension Compensation ($)
Cash ($) ($) Plan Value and ($)
($) Compensation Nonqualified
($) Deferred
Compensation
Earnings
(a) (b) (c) (d) (e) (f) (g) (h)
---------------------------------------------------------------------------------------------------------------------------------
A Paul L. Lamb 48,500 0 0 0 0 41,685(A) 90,185
---------------------------------------------------------------------------------------------------------------------------------
B Robert H. Beyer 24,500 0 0 0 0 41,685(A) 66,185
---------------------------------------------------------------------------------------------------------------------------------
C Philip F. Palmedo 25,000 0 0 0 0 41,685(A) 66,685
---------------------------------------------------------------------------------------------------------------------------------
D Elliot H. Levine 27,500 0 0 0 0 0 27,500
---------------------------------------------------------------------------------------------------------------------------------
E Richard B. Smith 25,500 0 0 0 0 0 25,500
---------------------------------------------------------------------------------------------------------------------------------
F Ronald J. Macklin 28,000 0 0 0 0 0 28,000
---------------------------------------------------------------------------------------------------------------------------------
G Nader G.M. Salour 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------------
(A) In the twelve-month period ended April 30, 2006, the above named directors
exercised 1,375 director options with a value of $41,685.
24
The Company adopted a non-qualified stock option plan for all non-employee
directors of the Company in October 1996. The plan expired in September 2000.
Each non-employee director was granted an initial 2,500 options on the date of
adoption of the plan. These options were exercisable in three equal annual
installments commencing on the first anniversary date subsequent to the grant.
Additionally, each non-employee director was granted 1,250 options on each
January 1, 1997 through 2000, respectively. These additional options were
exercisable in full on the first anniversary date subsequent to the date of each
grant. The options due to expire in January 2007 were all exercised.
The Company established an incentive compensation plan in 1999 for all full-time
employees and members of the Board. See, "Executive Compensation--Incentive
Compensation Upon a Change-In-Control." Non-employee directors as a group are
currently entitled to 52.5% of any distribution under the incentive compensation
plan, with the balance being distributable to executive officers (32%), other
eligible employees (11.5%) and the Chairman of the Board (4%).
(d) Compensation Committee Interlocks and Insider Participation
The Committee's members are currently Mr. Macklin (Chairman), Mr. Palmedo and
Mr. Salour. No member of the Committee is or was formerly an officer or employee
of the Company or any of its subsidiaries. No member of the Committee had any
relationship requiring disclosure by the Company under any paragraph of Item 404
of Regulation S-K.
(e) Compensation Committee Report
The Compensation Committee of the Board of Directors has reviewed and discussed
the Compensation Discussion and Analysis section of this Proxy Statement with
management. Based on this review and discussion, the Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement.
Members of the Compensation Committee
Ronald J. Macklin, Chairman
Philip F. Palmedo
Nader G.M. Salour
The forgoing report of the Compensation Committee shall not be deemed to be
filed with the SEC or to be incorporated by reference into any of the Company's
previous or future filings with the SEC, except as otherwise explicitly
specified by the Company in any such filing.
Performance Graph
The following graph compares total shareholder returns from April 30, 2001
through December 31, 2006 to the Standard & Poor's 500 Index ("S&P 500") and to
the Dow Jones U.S. Real Estate Index Fund ("DJ Real Estate Index"). The graph
assumes that the value of the investment in the Company's Common Stock and in
the S&P 500 and DJ Real Estate Index indices was $100 at April 30, 2001 and that
all dividends were reinvested. The price of the Company's Common Stock on April
30, 2001 (on which the graph is based) was $16.70. The shareholder return shown
on the following graph is not necessarily indicative of future performance.
25
Comparison of Five Year Cumulative Total Return
Year Ended December 31, 2006
[GRAPHIC OMITTED]
Period Ending
------------------------------------------------------------------
Index 4/30/01 4/30/02 4/30/03 4/30/04 4/30/05 4/30/06 12/31/06
----- ------- ------- ------- ------- ------- ------- --------
Gyrodyne 100.00 104.45 103.84 166.51 251.12 292.10 382.07
S&P 500 100.00 86.19 73.39 88.62 92.59 104.89 113.51
DJ Real Estate Index 100.00 110.75 103.17 120.62 153.90 183.97 217.12
TRANSACTIONS WITH CERTAIN RELATED PERSONS
There were no transactions in effect since May 1, 2006 (the beginning of
the Company's last fiscal year) or currently proposed in which the Company was
or is to be a participant and the amount involved exceeds $120,000, and in which
any related person had or will have a direct or indirect material interest.
26
The Company has a policy regarding related party transactions that is set
forth in the Company's Code of Business Conduct and Ethics ("Code of Ethics").
The Code of Ethics provides that when a conflict of interest arises, an officer,
director or employee has a duty to place the Company's interests ahead of his or
her own personal interests. The Code of Ethics states that it is essential that
in those instances where a Company decision or practice may appear to have been
made to advance a personal interest, that the decision be made or approved by
the independent and "disinterested" officers or directors of the Company. In
those instances where an employee faces a potential conflict of interest, the
employee is required to report the potential conflict of interest to the
compliance officer for his or her review. Any action or transaction in which the
personal interests of an officer or a director of the Company may be in conflict
with those of the Company must be promptly reported to the chairperson of the
Audit Committee of the Board of Directors (the "Committee"). The Committee has
the authority to determine in advance whether any such action or transaction
constitutes a conflict of interest in violation of the Code of Ethics.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's directors,
executive officers and any person holding more than ten percent of the Company's
Common Stock file with the SEC reports of ownership and changes in ownership,
and that such individuals furnish the Company with copies of the reports.
Based solely on our review of the copies of such forms received by us with
respect to the eight month transition period ended December 31, 2006, and any
written representations from reporting persons that no Forms 5 were required,
the Company believes that none of the Company's executive officers, directors or
ten-percent holders failed to file on a timely basis reports required by section
16(a) of the Exchange Act during the Transition period, except that Nader G.M.
Salour filed a Form 3 nine days after the deadline for filing such Form.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal 2)
The Board of Directors, upon the recommendation of the Audit Committee,
which is comprised entirely of independent directors, has appointed the
accounting firm of Holtz Rubenstein Reminick LLP ("Holtz Rubenstein") as
independent public accountants of the Company and its subsidiaries for the
current fiscal year. The appointment of Holtz Rubenstein has been ratified by
the shareholders every year since 1990. The Board is requesting ratification of
Holtz Rubenstein as independent public accountants. This firm has no financial
interest in the Company or any connection with the Company other than as
auditors and independent public accountants. The report of Holtz Rubenstein with
respect to the Company's financial statements appears in the Company's annual
report for the eight months ended December 31, 2006.
In the event the proposal is defeated, the adverse vote will be considered
a direction to the Board to select other independent public accountants for the
next fiscal year. However, because of the expense and difficulty of making any
substitution of independent public accountants after the beginning of a fiscal
period, it is contemplated that the appointment for Fiscal Year 2007 will be
permitted to stand unless the Board finds other reasons for making the change.
27
Audit and Other Fees.
---------------------
The following is a summary of the fees billed to the Company by Holtz
Rubenstein, its independent auditors, for professional services rendered for the
eight months ended December 31, 2006 and the fiscal years ended April 30, 2006
and 2005:
--------------------------------------------------------------------------------
Eight Months Ended
December 31, Fiscal Years Ended April 30,
--------------------------------------------------------------------------------
Fee Category 2006 2006 2005
--------------------------------------------------------------------------------
Audit Fees (1) $69,000 $51,600 $43,100
--------------------------------------------------------------------------------
Audit-Related Fees (2) 9,217 3,500 17,444
--------------------------------------------------------------------------------
Tax Fees (3) 25,346 29,000 22,900
--------------------------------------------------------------------------------
All Other Fees (4) - - -
--------------------------------------------------------------------------------
Total Fees $103,563 $84,100 $83,444
--------------------------------------------------------------------------------
(1) Audit Fees consist of aggregate fees billed for professional services
rendered for the audit of the Company's annual financial statements and review
of the interim financial statements included in quarterly reports for services
that are normally provided by the independent auditors in connection with
statutory and regulatory filings or engagements for the eight months ended
December 31, 2006 and the fiscal years ended April 30, 2006 and 2005,
respectively.
(2) Audit-Related Fees consist of aggregate fees billed for assurance and
related services that are reasonably related to the performance of the audit or
review of the Company's financial statements and are not reported under "Audit
Fees."
(3) Tax Fees consist of aggregate fees billed for professional services rendered
by the Company's principal accountant for tax compliance, tax advice and tax
planning. The amounts disclosed consist of fees paid for the preparation of
federal and state income tax returns.
(4) All Other Fees consist of aggregate fees billed for products and services
provided by Holtz Rubenstein, the Company's principal accountants, other than
those disclosed above.
None of the services performed by Holtz Rubenstein for the Company were
performed by non full time Holtz Rubenstein employees.
28
Our Audit Committee has determined not to adopt any blanket pre-approval
policies or procedures. Instead, the Committee will review each service on a
case-by-case basis before approving the engagement of Holtz Rubenstein for audit
or permissible non-audit services.
The Audit Committee reviews each proposed engagement to determine whether
the provision of services is compatible with maintaining the independence of the
independent auditors. All of the fees shown above were pre-approved by the Audit
Committee.
A representative of Holtz Rubenstein is expected to be present at the
Annual Meeting, will be given an opportunity to make a statement if he or she
desires to do so and is expected to be available at a designated time during the
Annual Meeting to respond to appropriate questions.
--------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" THE RATIFICATION OF APPOINTMENT OF HOLTZ RUBENSTEIN
REMINICK LLP AS INDEPENDENT AUDITORS. THIS IS IDENTIFIED AS ITEM 2 ON
THE ENCLOSED PROXY CARD.
--------------------------------------------------------
FINANCIAL STATEMENTS
Accompanying this Proxy Statement is the Annual Report on Form 10-K and the
amendment thereto on Form 10-K/A for the eight month transition period ended
December 31, 2006, which includes audited balance sheets, for the transition
period and the two most recent fiscal years, and statements of operations and
cash flows for the eight month transition period ended December 31, 2006 and
each of the three most recent fiscal years.
29
2007 SHAREHOLDER PROPOSALS
If a shareholder wishes to have a particular proposal considered by the
Board for inclusion in the Company's Proxy Statement for an Annual Meeting of
Shareholders, the shareholder must satisfy the requirements set by the SEC in
its proxy rules. The particular proxy rule, Rule 14a-8, requires that
shareholders submit their proposals in writing to the Company at least 120 days
before the anniversary date of the proxy statement mailing date for the prior
year's annual meeting. Thus, shareholders who wish to submit their proposals for
inclusion in the Company's proxy statement for next year's annual meeting must
deliver such proposals to the Corporate Secretary on or before June 28, 2008.
The notice must clearly identify the proposal, contain a brief supporting
statement and all required information about the proposing shareholder, and
otherwise satisfy the SEC's rule. Proposals should be addressed to the Secretary
of the Company, Gyrodyne Company of America, Inc., 1 Flowerfield, Suite 24,
Saint James, New York 11780.
In order for a shareholder nomination or proposal to be raised from the
floor during the 2007 Annual Meeting of Shareholders, the Company's by-laws
require that written notice thereof must be received by the Company not less
than 120 days nor more than 150 days before the anniversary date of the prior
year's annual meeting (there are special rules if the current year's meeting
date is held more than 30 days before, or more than 60 days after, the
anniversary of the prior year's meeting date, or if the number of directors is
changed). For the 2008 Annual Meeting of Shareholders, the written notice must
be given not later than August 7, 2008 and no earlier than July 8, 2008. The
shareholder's written notice must contain (i) all information relating to any
nominees proposed by the shareholder that is required to be disclosed in
solicitations of proxies pursuant to Regulation 14A under the Securities
Exchange Act of 1934 and Rule 14a-11 thereunder, (ii) a brief description of any
proposals sought to be presented for a vote at the Meeting, (iii) the
shareholder's name and record address and (iv) the class and number of shares of
Company Common Stock that is beneficially owned. Shareholders proposing nominees
for election to the Board of Directors must have continuously held at least
$2,000 in market value, or 1%, of the Company's outstanding Common Stock
entitled to vote for at least one year by such date of giving of notice or be
entitled to cast votes with respect to at least 5% of the outstanding Common
Stock. Nominations and proposals should be submitted in writing to the Secretary
of the Company, Gyrodyne Company of America, Inc., 1 Flowerfield, Suite 24,
Saint James, New York 11780, who will submit them to the Board for its
consideration.
BY ORDER OF THE BOARD OF DIRECTORS
Peter Pitsiokos
Corporate Secretary
30
APPENDIX A
PARTICIPANT INFORMATION
Gyrodyne Company of America, Inc. (the "Company"), its directors and certain of
its officers and employees are "participants" in a solicitation of proxies in
connection with the Company's upcoming 2007 annual meeting of stockholders. Each
of the directors of the Company and each of the officers and employees of the
Company who are "participants" in the solicitation are listed below, together
with the number of equity securities of the Company beneficially owned by each
of these persons as of October 24, 2007. Except as set forth below, none of the
persons listed below owns any equity securities of the Company of record that
such person does not own beneficially.
DIRECTORS, OFFICERS AND CERTAIN EMPLOYEES
Name, Positions with the Amount and Nature of
Company and Address Beneficial Ownership (1)
------------------- --------------------
Stephen V. Maroney, President, CEO, 81,087 (2)
Treasurer and Director
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
Paul L. Lamb, Chairman of the Board of Directors 24,364 (3)
c/o Lamb & Barnosky, LLP
534 Broadhollow Road
Melville, NY 11747
Peter Pitsiokos, Chief Operating Officer, Chief 16,175 (4)
Compliance Officer and Secretary
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
Robert H. Beyer, Director 13,802 (5)
10505 Indigo Lane
Fairfax, Virginia 22032
Philip F. Palmedo, Director 12,749
4 Piper Lane
St. James, NY 11780
31
Richard B. Smith, Director 1,000
111 Boney Lane
Nissequogue, NY 11780
Nader G.M. Salour 400
c/o Cypress Realty of Florida, LLC
1200 University Boulevard
Suite 210
Jupiter, FL 33458
Ronald J. Macklin, Director 200
c/o Keyspan Corporate Services
175 E. Old Country Road
Hicksville, NY 11801
Elliot H. Levine, 0
Director
c/o Levine & Seltzer, LLP
150 East 52nd Street
New York, NY 10022
60,580
Gyrodyne Company of America, Inc.
Pension Plan
1 Flowerfield, Suite 24
St. James, NY 11780
(1) For a definition of "beneficial ownership" see "Principal Shareholders."
(2) On March 29, 2007, Stephen V. Maroney filed a Schedule 13D with the
Securities and Exchange Commission stating that he and his spouse jointly
and beneficially own and have shared power to vote and to dispose of 81,087
shares of Gyrodyne stock. Mr. Maroney has pledged 20,000 shares of Common
Stock as security.
(3) Includes 14,747 shares held by Lamb & Barnosky, LLP Profit Sharing Trust
and 500 shares held by the Paul L. Lamb, P.C. Defined Benefit Plan. Mr.
Lamb is a Trustee of the Profit Sharing Trust and the Defined Benefit Plan.
(4) Does not include his wife's and minor children's ownership of 1,089 shares
in which he denies any beneficial interest. Mr. Pitsiokos has pledged 3,000
shares of Common Stock as security.
(5) Does not include his wife's ownership of 1,301 shares in which he denies
any beneficial interest.
32
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS
The following table sets forth information regarding purchases and sales during
the past two years of shares of the Company's common stock by its directors,
director nominees, officers and employees who, under the rules of the Securities
and Exchange Commission, are "participants" in the Company's solicitation of
proxies in connection with the Annual Meeting. Except as set forth below or as
otherwise disclosed in this Proxy Statement, none of the purchase price or
market value of those shares is represented by funds borrowed or otherwise
obtained for the purpose of acquiring or holding such securities. To the extent
that any part of the purchase price or market value of any of those shares is
represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding such securities, the amount of the indebtedness as of the latest
practicable date is set forth below. If those funds were borrowed or obtained
otherwise than pursuant to a margin account or bank loan in the regular course
of business of a bank, broker or dealer, a description of the transaction and
the parties is set forth below.
--------------------------------------------------------------------------------
Shares of Common Stock Purchased or Sold
(10/24/05 - 10/24/07)
--------------------------------------------------------------------------------
Name Date # of Shares Transaction Footnote
--------------------------------------------------------------------------------
Stephen V. Maroney 1/1/06 1,375 1
--------------------------------------------------------------------------------
3/20/07 39,798 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Peter Pitsiokos 10/31/06 6,000 2
--------------------------------------------------------------------------------
12/29/06 3,400 2
--------------------------------------------------------------------------------
3/27/07 4,925 2
--------------------------------------------------------------------------------
3/28/07 5,000 2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paul L. Lamb 1/1/06 1,375 1
--------------------------------------------------------------------------------
4/4/06 300 3
--------------------------------------------------------------------------------
9/22/06 200 3
--------------------------------------------------------------------------------
1/1/07 1,375 1
--------------------------------------------------------------------------------
9/21/07 1,000 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Philip F. Palmedo 1/1/06 1,375 1
--------------------------------------------------------------------------------
1/1/07 1,375 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert H. Beyer 1/1/06 952 1
--------------------------------------------------------------------------------
8/18/06 200 2
--------------------------------------------------------------------------------
1/1/07 966 1
--------------------------------------------------------------------------------
1/26/07 300 2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nader G.M. Salour 9/6/07 150 3
--------------------------------------------------------------------------------
9/7/07 250 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Pension Plan 3/21/06 350 2
--------------------------------------------------------------------------------
3/23/06 350 2
--------------------------------------------------------------------------------
33
--------------------------------------------------------------------------------
3/24/06 300 2
--------------------------------------------------------------------------------
4/10/06 300 2
--------------------------------------------------------------------------------
4/12/06 300 2
--------------------------------------------------------------------------------
4/17/06 600 2
--------------------------------------------------------------------------------
4/19/06 300 2
--------------------------------------------------------------------------------
4/21/06 300 2
--------------------------------------------------------------------------------
4/24/06 300 2
--------------------------------------------------------------------------------
4/26/06 900 2
--------------------------------------------------------------------------------
(1). Shares purchased through the exercise of options.
(2). Open market sale.
(3). Open market purchase.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Appendix A or otherwise disclosed in this Proxy
Statement, to the best of the Company's knowledge, no associate of any person
listed above under "Directors, Officers and Certain Employees" beneficially owns
any shares of common stock or other securities of the Company. Furthermore,
except as described in this Appendix A or otherwise disclosed in this Proxy
Statement, to the best of the Company's knowledge, no person listed above under
"Directors, Officers and Certain Employees" or any of his or her associates, is
either a party to any transactions or series of similar transactions since the
beginning of the Company's last fiscal year, or any currently proposed
transaction or series of similar transactions, (i) in which the Company or any
of its subsidiaries was or is to be a party, (ii) in which the amount involved
exceeds $120,000, or (iii) in which any such person or any of his or her
associates had or will have, a direct or indirect material interest.
To the best of the Company's knowledge, except as described in this Appendix A
or as otherwise disclosed in this Proxy Statement, no person listed above under
"Directors, Officers and Certain Employees," or any of his associates has
entered into any agreement or understanding with any person respecting any
future employment by the Company or its affiliates or any future transactions to
which the Company or any of its affiliates will or may be a party. Except as
described in this Appendix A or as otherwise disclosed in this Proxy Statement,
to the best of the Company's knowledge, there are no contracts, arrangements or
understandings by any of the persons listed above under "Directors, Officers and
Certain Employees" within the past year with any person with respect to any
securities of the Company, including, but not limited to, joint ventures, loan
or option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies.
Except as described in this Appendix A or as otherwise disclosed in this Proxy
Statement, to the best of the Company's knowledge, none of the persons listed
above under "Directors, Officers and Certain Employees" owns beneficially any
securities of any subsidiary of the Company.
Except as described in this Appendix A or as otherwise disclosed in this Proxy
Statement, to the best of the Company's knowledge, no person listed above under
"Directors, Officers and Certain Employees" has any substantial interest, direct
or indirect, by security holdings or otherwise, in any matter to be acted upon
at the Annual Meeting.
34
There are no material proceedings to which any person listed above under
"Directors, Officers and Certain Employees" or any associate of any such person
is a party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries. There are no family
relationships among the directors, director nominees and executive officers of
the Company.
35
GYRODYNE COMPANY OF AMERICA, INC.
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 5, 2007
Revocable Proxy
PROXY/AUTHORIZATION AND DIRECTION FOR EXECUTION
OF PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby designates Stephen V. Maroney and Peter Pitsiokos,
and each of them, their true and lawful agents and proxies with full power of
substitution in each, to represent the undersigned at the Annual Meeting of
Shareholders of GYRODYNE COMPANY OF AMERICA, INC. to be held at Flowerfield
Celebrations, Mills Pond Road, St. James, New York 11780 on Wednesday, December
5, 2007 at 11:00 A.M., and any adjournment thereof, and revoking all proxies
heretofore given, as designated hereon. The shares shall be voted in the
discretion of the proxies on such other matters as may properly come before the
meeting or any adjournment thereof. This proxy shall remain in effect for a
period of one year from its date.
SIGN BELOW - Please sign exactly as your name appears hereon. If shares are
registered in more than one name, all should sign but if one signs, it binds the
others. When signing as attorney, executor, administrator, agent, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by an authorized person. If a partnership, please sign
partnership name by an authorized person.
Dated ___________________________ Signature____________________________
Signature____________________________
THIS PROXY/AUTHORIZATION AND DIRECTION FOR EXECUTION OF PROXY, IF PROPERLY
EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE FOR A PROPOSAL, THE
SHARES WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
Receipt of the Proxy Statement and Annual Report is hereby acknowledged.
A vote FOR Item 1 is recommended by the Board of Directors.
1. To elect three directors to serve for a term of three years and until their
successors shall be elected and shall qualify:
Ronald J. Macklin Term Expiring 2010 [ ] FOR [ ] WITHHELD
Stephen V. Maroney Term Expiring 2010 [ ] FOR [ ] WITHHELD
Philip F. Palmedo Term Expiring 2010 [ ] FOR [ ] WITHHELD
36
A vote FOR Item 2 is recommended by the Board of Directors.
2. To ratify the engagement of Holtz Rubenstein Reminick LLP as Certified
Public Accountants for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
37