GYRODYNE
COMPANY OF AMERICA, INC.
ONE
FLOWERFIELD
SUITE
24
ST.
JAMES, NEW YORK 11780
November
27, 2007
Dear
Fellow Gyrodyne Shareholder:
On
December 5th we will hold our annual shareholders meeting. With that date
fast
approaching, it is important that you understand certain facts about the
proxy
contest started by Phillip Goldstein and his Bulldog nominees.
GLASS,
LEWIS RECOMMENDS GYRODYNE SHAREHOLDERS VOTE FOR THE COMPANY’S
NOMINEES
Glass,
Lewis recommends that you vote your shares for all of management's director
nominees on the WHITE proxy card. Glass, Lewis is widely recognized as
one of the nation's leading independent proxy voting and corporate governance
advisory firms. The firm's analyses and recommendations are considered by
hundreds of major institutional investment firms, mutual funds and fiduciaries
throughout the United States.
In
recommending that Gyrodyne shareholders vote FOR Gyrodyne's incumbent directors
and AGAINST the nominees of Phillip Goldstein and his Bulldog hedge funds,
Glass, Lewis states:
“The
Company has fulfilled its promise to convert to a REIT and made a one-time
distribution to shareholders. We note that the board’s strategy has yielded an
11.0% annualized one year return to the Company stock (taken over the last
three
fiscal years). Overall, we are not convinced that the Dissident’s plan for
improvement would provide more meaningful returns to shareholders than
management’s current strategy.”
In
addition, Glass, Lewis states that, in its view, “given the Dissident’s previous
offer to acquire the Company, the proposed board size reduction and poison
pill
redemption suggest that the underlying motive of the contest may be to gain
control over the Company without paying a control premium.”
DON’T
LET BULLDOG ACQUIRE EFFECTIVE CONTROL OF GYRODYNE WITHOUT PAYING YOU ANYTHING
FOR YOUR SHARES!
In
his recent letter to shareholders, Mr. Goldstein and his nominees revealed
for
the first time their true intentions for Gyrodyne—they want to acquire effective
control of your Company without paying you, our shareholders, any cash
consideration, let alone a control premium! Bulldog has now unveiled a
plan to elect three directors and “dismantle” our shareholder rights plan at the
annual meeting and then pursue a reduction in the size of the board from
8 to 5
and appoint a new CEO of their choosing. This explains why Bulldog did not
accept our offer to grant them a seat on our board and all adds up to a scheme
to seize effective control of Gyrodyne without paying shareholders any cash
consideration.
Mr.
Goldstein’s selfish efforts to obtain a benefit for himself and his hedge fund
investors at the expense of all other shareholders should not come as a surprise
to anyone familiar with Goldstein’s history with other companies, a history that
includes accepting greenmail along with a continuing and shocking disregard
for
compliance with the federal securities laws. Since we mailed our proxy statement
to you, still more instances of Goldstein ignoring the rules have come to
our
attention:
|
|
•
|
On
October 17, 2007, the Acting Director of the Massachusetts Securities
Division issued a Final Order finding that Full Value Partners
L.P.,
Bulldog Investors General Partnership and nominees Phillip Goldstein
and
Andrew Dakos violated Massachusetts securities laws by making an
unlawful
offer of securities. The Acting Director ordered a permanent
cease-and-desist against Full Value Partners L.P., Bulldog Investors
General Partnership and nominees Phillip Goldstein and Andrew Dakos
from
committing any further violations of the Act and a $25,000 administrative
fine, the maximum penalty allowed under Massachusetts law for
this
violation.
|
|
|
•
|
On
October 3, 2007, Bancroft Fund Ltd. filed suit against Bulldog,
Goldstein
and Dakos to force them to comply with the investment limitations
imposed
by the Investment Company Act. According to Bancroft’s complaint,
Bulldog acquired and continues to hold more than three percent
of
Bancroft’s outstanding shares, which is greater than the maximum amount
permitted by law and in violation of the Investment Company Act.
Bancroft
asserts that by disregarding the laws and rules enacted by Congress
and
the SEC, Bulldog has imperiled Bancroft’s status as a registered
investment company and has not reduced its holdings despite the
irreparable harm this could cause Bancroft and its public shareholders
and
despite requests from Bancroft to do
so.
|
Ask
yourself: do you want Goldstein and his nominees protecting your investment
and
overseeing Gyrodyne’s valuable assets?
After
we
informed you in our October letter that the SEC Staff found that the Bulldog
nominees violated the federal securities laws in connection with last year’s
solicitation of Gyrodyne shareholders, Timothy Brog, one of Bulldog’s nominees,
contacted us to explain that he had never been informed of Bulldog’s SEC issues
until he received a copy of our letter. Mr. Brog told us that he was never
notified by the SEC Staff that he committed a federal securities law violation
nor had he ever ignored any SEC Staff instructions “in his entire life.”
Apparently, Bulldog nominees Goldstein and Dakos do not take violations of
the
law seriously or even care to share with their fellow nominee the receipt
of
written notice of a securities law violation from the SEC Staff that relates
directly to the proxy contest in which they asked Mr. Brog to serve as their
fellow nominee. Does this sound like a group well-suited to lead our company
and
sit on the board of an SEC-registered company?
GYRODYNE
HAS BEEN FORCED TO FILE SUIT AGAINST BULLDOG FOR REPEATEDLY VIOLATING FEDERAL
SECURITIES LAWS IN ITS SOLICITATION OF GYRODYNE
SHAREHOLDERS
Your
directors reviewed the proxy materials Bulldog sent to you. In their view,
Bulldog’s three page proxy statement and accompanying letter to shareholders are
riddled with inaccuracies, misleading self-serving statements, omissions
of
material facts and statements which impugn the character and integrity of
your
management and board without factual foundation. Most significantly, it is
clear
to your board that Bulldog’s proxy materials do not provide you with the
accurate information you need to evaluate the ability and integrity of Bulldog’s
nominees to become members of your board. Bulldog’s proxy materials are so
deficient in providing this information and in complying with the securities
laws that your board determined that it had no choice but to bring a lawsuit
against Bulldog in order to protect the interests of all Gyrodyne shareholders.
Our lawsuit asks the Court to require Mr. Goldstein and his nominees to comply
with their disclosure obligations, and to enjoin them from using false and
misleading statements to improperly solicit your proxy. The sole purpose
of our
lawsuit is to ensure that all Gyrodyne shareholders have complete and accurate
information and are not mislead into voting for any directors based on false
and
misleading information and empty promises.
DON’T
LET MR. GOLDSTEIN DERAIL GYRODYNE’S STRATEGIC MOMENTUM FOR HIS OWN PERSONAL
SHORT TERM GAIN!
Your
Board and Management have produced a consistent record of superior long term
shareholder returns. A $100.00 investment in Gyrodyne stock on April 30,
2001
would have grown to $382.07, a 282% cumulative return as of the end of our
last
fiscal year, December 31, 2006. That compares to a 13% return for the S&P
500 and a 117% return for the Dow Jones Real Estate Index. Gyrodyne’s Market
capitalization grew by over 350% during that same timeframe.
Gyrodyne’s
board is committed to delivering value to all shareholders and will hold
management accountable for achieving its financial objectives. We believe
that
the Gyrodyne nominees have the relevant skill set needed to unlock Gyrodyne’s
valuable potential. Nader Salour was added to the Board in 2006 to
broaden the Board’s real estate expertise. In addition, Ronald J. Macklin, a
director since 2003, has relevant eminent domain experience. Stephen Maroney,
Gyrodyne’s CEO, has been involved in real estate lending and development and
joint venture activities throughout his thirty-five year career. And
what are the qualifications of the Bulldog nominees? Their primary expertise
is
running hedge funds and failing to comply with government rules and
regulations.
Do
not
sign any proxy you may receive from Mr. Goldstein or Full Value Partners
L.P.
Instead, sign and date the WHITE proxy enclosed with this
letter and return it in the envelope provided. Even if you have previously
signed a Goldstein/Full Value proxy, you should sign, date and return the
enclosed WHITE proxy; you have the right to change your vote
and only the latest dated proxy counts.
We
have
also made arrangements to allow shareholders to vote by telephone or internet.
If you have any questions about voting your shares or about our campaign,
please
call our proxy solicitation firm, MacKenzie Partners, Inc. Toll-Free at
(800)322-2885 or (212)929-5500 (call collect) or by email at
proxy@mackenziepartners.com.
Sincerely,
/s/
Stephen V. Maroney
Stephen
V. Maroney, President and CEO,
on
behalf
of your Board of Directors
On
October 26, 2007, the Company filed a proxy statement in connection with
its
2007 Annual Meeting of Shareholders. The Company's shareholders are urged
to
read carefully the proxy statement and other relevant materials which were
mailed to shareholders commencing on October 26, 2007, because they contain
important information about the 2007 Annual Meeting. Detailed information
regarding the names, affiliations and interests of individuals who are
participants in the solicitation of proxies of Gyrodyne’s shareholders is
available in Gyrodyne’s definitive proxy statement.
FORWARD-LOOKING
STATEMENTS
The
statements made in this Schedule 14A that are not historical
facts
constitute “forward-looking information” within the meaning of the Private
Securities Litigation Reform Act of 1995, and Section 27A of the Securities
Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended,
which can be identified by the use of forward-looking terminology such as
“may,”
“will,” “anticipates,” “expects,” “projects,” “estimates,” “believes,” “seeks,”
“could,” “should,” or “continue,” the negative thereof, other variations or
comparable terminology. Important factors, including certain risks
and uncertainties, with respect to such forward-looking statements that could
cause actual results to differ materially from those reflected in such
forward-looking statements include, but are not limited to, the effect of
economic and business conditions, including risks inherent in the Long Island,
New York and Palm Beach County, Florida real estate markets, the ability
to
obtain additional capital in order to develop the existing real estate and
other
risks detailed from time to time in Gyrodyne’s SEC reports.
-7-