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. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GYRODYNE COMPANY OF AMERICA, INC.
..................................................................
(Name of Registrant as Specified In Its Charter)
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
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.......................................................
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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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.
102 FLOWERFIELD
SAINT JAMES, NEW YORK 11780
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 9, 2003
-------------------
To the Shareholders of
GYRODYNE COMPANY OF AMERICA, INC.
NOTICE IS HEREBY GIVEN, pursuant to the Bylaws, 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 Tuesday, December 9, 2003 at 11:00 o'clock in the
forenoon, Eastern Time.
The purpose of the Annual Meeting is to consider and vote upon the following
matters:
1. To elect two (2) directors to a three year term of office, and one
(1) director to a one year term of office; or until their successors shall
be duly elected and qualified;
2. To ratify the engagement of Holtz Rubenstein & Co., LLP, independent
accountants, as auditors of the Company and its subsidiaries for the Fiscal
Year ending April 30, 2004; 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 November 10, 2003 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 2003 Annual Meeting of
Shareholders, Proxy Statement, Proxy Card and Attendance Registration.
To obtain an admittance card for the 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
November 17, 2003
YOUR VOTE IS IMPORTANT
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE 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
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. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS (THE "ANNUAL
MEETING") TO BE HELD DECEMBER 9, 2003 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 November 10, 2003 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 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 1,140,505. This Proxy Statement and the enclosed proxy card were
mailed starting on or about November 17, 2003.
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. Directors shall be
elected by a plurality of the votes cast. The appointment of independent
accountants will be ratified by a majority of the votes cast. 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.
Management does not know of any other matters that may be presented. If any
other matters properly come before the Annual Meeting or adjournments thereof,
the persons named in the enclosed proxy will vote on such matters in accordance
with their best judgment pursuant to the discretionary authority included in the
proxy.
The cost of soliciting proxies will be paid by the Company. In addition to
solicitation by mail, officers, directors, and regular employees of the Company
may, without compensation other than their regular compensation, solicit proxies
by telephone, by fax or in person. Brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward solicitation materials to
their principals and the Company will reimburse the expense of so doing. In
addition, Mackenzie Partners Inc., a proxy solicitation firm, will assist the
Company in soliciting proxies for the Annual Meeting and will be paid a fee of
$5,000 plus out-of-pocket expenses.
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. 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 are including this statement for purposes 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. 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.
2
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
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 number of directors of the
Company was increased this year by resolution of the Board of Directors from six
(6) to seven (7). There are 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. Each properly executed proxy received
will be voted for the election of the three (3) nominees named below as
directors to serve until the designated Annual Meeting of Shareholders shown
below 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, is as follows. Unless otherwise
indicated, each of the following persons has held his or her present position
for the last five years.
NOMINEES
TERM EXPIRING IN 2006
Richard B. Smith ......................... Senior Vice President for Private Banking, Suffolk
Director since 2002 County National Bank, May 2000 to present; District
Age: 49 Manager for Private Banking, Key Bank, January 1989 to
May 2000; Mayor of the Incorporated Village of
Nissequogue, New York; Trustee of Smithtown Historical
Society
TERM EXPIRING IN 2006
Paul L. Lamb ............................. Chairman of the Board of Directors of the Company
Director since 1997 Partner, Lamb & Barnosky, LLP
Age: 58
TERM EXPIRING IN 2004
Ronald J. Macklin ........................ Assistant General Counsel, Keyspan Corporate Services, a
Director since 2003 wholly owned subsidiary of Keyspan Corporation,
Age: 41 October 2003 to present; various positions within the
Office of General Counsel of Keyspan Corporate
Services, 1991 to October 2003
CONTINUING DIRECTORS
TERM EXPIRING IN 2005
Robert H. Beyer .......................... Consultant, retired Naval Air Systems Command Engineer,
Director since 1977 retired Captain, United States Naval Reserves, retired
Age: 70 Technical Representative for the Company's former
helicopter subsidiary
TERM EXPIRING IN 2005
Robert F. Friemann ....................... Self-employed consultant, January 1, 2002 to present;
Director since 1998 CPA and Partner of Albrecht, Viggiano, Zureck & Company,
Age: 56 P.C., June 1, 1968 to December 31, 2001
(table continued on next page)
3
(table continued from previous page)
TERM EXPIRING IN 2004
Philip F. Palmedo ........................ Chairman of the Board, International Resources Group;
Director since 1996 Director, EHR Investments; President, Palmedo
Age: 69 Associates; Director, Stony Brook Foundation
TERM EXPIRING IN 2004
Stephen V. Maroney ....................... President, CEO and Treasurer of the Company, March 14,
Director since 1996 1999 to present; Director of real estate development
Age: 61 for the Company, June 1996 to March 1999; former
President of Extebank, a Long Island based commercial
bank
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES
FOR DIRECTOR. THIS IS IDENTIFIED AS ITEM 1 ON THE ENCLOSED PROXY CARD.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS
The following table contains common stock ownership information for persons
known by the Company to "beneficially own" 5% or more of the Company's common
stock, par value $1.00 per share (the "Common Stock"), as of November 10, 2003.
In general, beneficial ownership includes those shares that a person has the
power to vote, sell or otherwise dispose of. Beneficial ownership also includes
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. 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 the Company. In this Proxy Statement, "voting power" is the power to vote
or direct the voting of shares, and "investment power" includes the power to
dispose or direct the disposition of shares.
TYPE OF NUMBER OF PERCENT OF
NAME AND ADDRESS OWNERSHIP SHARES OWNED CLASS(A)
---------------- --------- ------------ --------
Gerard Scollan(B) ........................................ Beneficial 113,796 9.98%
80 Browns River Road
Sayville, NY 11782
Gyrodyne Company of America, Inc. ........................ Beneficial 72,580 6.36%
St. James, NY 11780(C)
Private Capital Management, LP ........................... Beneficial 74,785 6.56%
8889 Pelican Bay Blvd., Suite 500
Naples, Florida 34108
Bruce Sherman(D) ......................................... Beneficial 115,202 10.10%
8889 Pelican Bay Blvd., Suite 500
Naples, Florida 34108
---------
(A) Based on 1,140,505 shares of the Company's Common Stock outstanding on
November 10, 2003.
(B) Includes 102,241 shares of Company Stock held by Lovin Oven Catering of
Suffolk, Inc, of which Mr. Scollan is the majority shareholder.
(C) Since the Company has the authority to direct HSBC Bank, USA, the Trustee
of the Gyrodyne Pension Plan, to vote the securities of the Company held by
the Pension Fund, Gyrodyne Company of America, Inc. has been listed above
as the beneficial owner of the 72,580 shares held by HSBC Bank, USA as
Trustee for the Gyrodyne Pension Fund. The Board of Directors intends to
instruct the trustees of the Pension Fund to vote "FOR" the election of the
nominees for director and "FOR" ratification of the appointment of
independent auditors.
(D) Mr. Sherman is the CEO of Private Capital Management, LP, and in this
capacity he exercises shared dispositive and shared voting power with
regard to the shares held by Private Capital Management, LP's clients and
managed by Private Capital Management, LP. Mr. Sherman disclaims beneficial
ownership of the 74,785 shares held by Private Capital Management, LP's
clients and disclaims the existence of a group.
5
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND NOMINEES
The following table sets forth as of November 10, 2003 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.
PERCENTAGE OF
NAME & POSITIONS WITH AMOUNT AND NATURE COMMON STOCK
THE COMPANY OF BENEFICIAL OWNERSHIP(A) OWNED(B)
----------- -------------------------- --------
Stephen V. Maroney, President, CEO, Treasurer and
Director............................................ 19,043 1.67%
Peter Pitsiokos, Exec. Vice President, Secretary &
General Counsel..................................... 6,100(C) *
Robert H. Beyer, Director............................. 10,263(D) *
Robert F. Friemann, Director.......................... 3,291 *
Paul L. Lamb, Chairman of the Board of Directors...... 15,989(E) 1.40%
Ronald J. Macklin, Director........................... 0 *
Philip F. Palmedo, Director........................... 9,999(F) *
Richard B. Smith, Director............................ 1,000 *
All Directors and Executive Officers as a Group (Eight
(8) Persons)........................................ 65,685 5.76%
---------
* Less than one percent of the total shares of outstanding stock.
(A) For a definition of "beneficial ownership" see "Principal Shareholders."
(B) Based on 1,140,505 shares of Common Stock outstanding as of November 10,
2003.
(C) Does not include his wife's and minor children's ownership of 1,089 shares
in which he denies any beneficial interest.
(D) Does not include his wife's ownership of 1,801 shares in which he denies
any beneficial interest.
(E) Includes 13,747 shares of Company stock held by Lamb & Barnosky, LLP Profit
Sharing Trust. Mr. Lamb is a Trustee of the Profit Sharing Trust and a
partner in Lamb & Barnosky, LLP.
(F) Does not include his wife's ownership of 2,750 shares in which he denies
any beneficial interest.
6
INFORMATION ABOUT THE BOARD OF DIRECTORS AND MANAGEMENT
DIRECTOR COMPENSATION
Directors who are full-time salaried employees of the Company are not
compensated for their service on the Board or any committee. Non-employee
directors are paid an annual fee of $12,000.00, $1,000.00 for each director's
meeting attended, $500.00 for each committee meeting attended and travel and
lodging expenses where appropriate. All compensation is paid in cash. There was
no additional compensation paid by the Company to any other director for Fiscal
Years 2003 or 2002.
NON-EMPLOYEE DIRECTOR'S STOCK OPTION PLAN
The Company adopted a non-qualified stock option plan for all non-employee
directors of the Company in October 1996. 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 2001,
respectively. These additional options are exercisable in full on the first
anniversary date subsequent to the date of grant.
A summary of the Company's various fixed stock option plans as of April 30,
2003 and 2002, and changes during the years then ended is presented below:
YEARS ENDED APRIL 30,
---------------------------------------
2003 2002
------------------ ------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
FIXED STOCK OPTIONS SHARES PRICE SHARES PRICE
------------------- ------ ----- ------ -----
Outstanding, beginning of year.......................... 142,340 $15.13 120,975 $14.90
Granted................................................. 41,800 15.70 35,090 15.94
Exercised............................................... (1,700) 10.74 (5,500) 14.08
Canceled................................................ (11,825) 13.97 (8,225) 16.02
------- -------
Outstanding, end of year................................ 170,615 15.39 142,340 15.13
======= =======
Options exercisable at year end......................... 170,615 15.39 142,340 15.13
======= =======
Weighted average fair value of options granted during
the year.............................................. $ 5.56 $ 5.35
====== ======
The following table summarizes information about stock options outstanding
at April 30, 2003:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ ----------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
RANGE OF EXERCISE PRICE OUTSTANDING LIFE PRICE OUTSTANDING PRICE
----------------------- ----------- ---- ----- ----------- -----
$10.73 - $13.46.......................... 31,850 1.40 $11.71 31,850 $11.71
$14.23 - $16.16.......................... 100,265 3.66 $15.44 100,265 $15.44
$18.16 - $19.10.......................... 38,500 1.97 $18.30 38,500 $18.30
-------------------
Shares reserved for future issuance at April 30, 2003 are comprised of the
following:
Shares issuable upon exercise of stock options under
the Company's Non-Employee Director Stock Option
Plan.............................................. 72,000
Shares issuable under the Company's Non-Employee
Director Stock Compensation Plan.................. 22,792
Shares issuable upon exercise of stock options under
the Company's stock incentive plan................ 230,177
-------
324,969
=======
7
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
ATTENDANCE
There were seven regular and special meetings of the Board of Directors
during Fiscal Year 2003. Each Director, other than Director Macklin, who became
a member of the Board in June 2003, attended at least 75% of the aggregate
number of meetings of the Board of Directors of the Company. Director Macklin
attended at least 75% of the aggregate number of meetings of the Board of
Directors held while he served as a Director.
COMMITTEES
The Board of Directors of the Company has established the following
committees:
The EXECUTIVE COMMITTEE consists of three non-employee members and Mr.
Maroney. Directors presently serving on the Executive Committee include Mr. Lamb
(Chairman), Mr. Friemann, Mr. Maroney and Mr. Palmedo. The Executive Committee
exercises all the authority of the Board of Directors in the management and
business affairs of the Company during the intervals between meetings of the
Board except with respect to certain matters that by statute may not be
delegated by the Board of Directors. The committee did not meet during FY 2003.
The AUDIT COMMITTEE meets with the Company's independent auditors annually
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. 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 once during FY 2003 and its members are Mr.
Friemann, Mr. Smith and Mr. Palmedo.
The EXECUTIVE COMPENSATION COMMITTEE consists entirely of non-employee
directors and oversees the Company's compensation and benefit policies and
programs. It recommends to the Board annual salaries, bonuses and other benefits
for elected officers. The Committee met once in FY 2003 and its members are Mr.
Friemann, Mr. Beyer and Mr. Smith.
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 will accept
for consideration stockholders' 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 stockholders proposals in
order to be considered for the next annual election of directors. The Committee
met once during FY 2003 and its members are Mr. Palmedo, Mr. Friemann and Mr.
Beyer.
The STOCK OPTION COMMITTEE consists entirely of non-employee directors not
eligible to participate in the Company's 1993 Stock Incentive Plan or other
stock option plans for the benefit of Company employees. The primary functions
of the Stock Option Committee include the review and administration of employee
stock option plans for the benefit of officers and key employees. It also
recommends to the Board stock options and awards. The Committee met once during
FY 2003 and its members are Mr. Beyer, Mr. Friemann and Mr. Smith.
8
REPORT OF THE AUDIT COMMITTEE
Pursuant to newly adopted rules by the Securities and Exchange Commission
(the SEC) and the National Association of Securities Dealers, Inc. (the NASD),
the Audit Committee of Gyrodyne Company of America, Inc. has issued the
following report and affirmed that:
(i) All financial reports (Form 10-QSB and 10-KSB) issued subsequent
to March 15, 2001 are reviewed by both the Company's independent auditors
and the members of this committee prior to filing such reports with the SEC.
(ii) Audited financial statements have been reviewed and discussed with
management.
(iii) We have reviewed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61
pertaining to communications with Audit Committees.
(iv) We have received from the auditors disclosures regarding the
auditors' independence as required by Independence Standards Board Standard
No. 1 and we have discussed their independence with respect to the Company
with them.
(v) Based on our review of and discussion about the audited financial
statements, we have recommended they be included in the Company's Annual
Report on Form 10-KSB.
(vi) All of the members of the Company's Audit Committee qualify as
being independent as defined in the applicable listing standards issued by
the NASD.
(vii) The Board of Directors has adopted a written charter for the Audit
Committee.
MEMBERS OF THE COMMITTEE
Robert F. Friemann
Philip F. Palmedo
Richard B. Smith
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Peter Pitsiokos, age 44, has served as Executive Vice President, Secretary
and General Counsel of the Company since November 1992. 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.
9
EXECUTIVE COMPENSATION
The following table sets forth cash and non-cash compensation for the fiscal
years ended April 30, 2003, April 30, 2002 and April 30, 2001 awarded to or
earned by Stephen V. Maroney, the Company's President and Chief Executive
Officer, and Peter Pitsiokos, the Company's Executive Vice President and
Secretary. No other officer's total annual salary and bonus for fiscal year end
April 30, 2003 was in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ---------- --------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD OPTIONS/ PAYOUT ALL OTHER
POSITION YEAR ($) ($) ($)(A) ($) LSARS (#) ($) COMPENSATION
-------- ---- --- --- ------ --- --------- --- ------------
Stephen V. Maroney
President & CEO...... 2003 209,500 0 22,422(B) 0 20,355 0 0
2002 190,750 0 0 0 13,750 0 0
2001 181,058 0 0 0 10,500 0 0
Peter Pitsiokos
Exec.V.P. and
Secretary.......... 2003 148,990 0 17,797(C) 0 13,945 0 0
2002 123,128 0 0 0 14,300 0 0
2001 127,242 0 20,647(D) 0 8,000 0 0
---------
(A) The Company has concluded that aggregate amounts of personal benefits to any
of the current executives does not exceed the lesser of $50,000 or 10% of
compensation and bonuses reported above for the named executive officers,
and that the information set forth in tabular form above is not rendered
materially misleading by virtue of the omission of such personal benefits.
(B) In FY 2003, Mr. Maroney received 1,430 shares from stock awards granted with
a value of $22,422.
(C) In FY 2003, Mr. Pitsiokos received 1,135 shares from stock awards granted
with a value of $17,797.
(D) For the year ended 2000, Mr. Pitsiokos received 4,093 shares from the
exercise of stock appreciation rights granted in FY 1995, 25% of which was
amortized in FY 2001 with a value of $20,647 and 75% of which was amortized
in FY 2000 with a value of $61,942. In addition, Mr. Pitsiokos received 525
shares in FY 00 from stock awards granted in FY 1998 with a value of
$10,533.
10
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Company's executive compensation program is administered by the
Executive Compensation Committee of the Board. The Committee reviews and
recommends compensation for executive officers. The Committee's recommendations
are considered by the Board's non-employee directors.
The goal of the Company's Executive Compensation Committee is to ensure that
an appropriate relationship exists between executive compensation and the
creation of shareholder value, while at the same time motivating and retaining
key employees. Salary guidelines for executive officers are established by
comparing responsibilities of the position to similar positions in other
comparable companies. The Company has long believed in the importance of
aligning the interests of executives and shareholders through stock ownership by
key employees. The primary components of compensation, base salary and stock
option awards are designed to accomplish the Committee's goals.
The Committee evaluates management based on the Company's financial and
non-financial performance recognizing that land and property management
constitute the major portion of the Company's business activities.
Comparisons of the Company's compensation levels with those of similar land
management and property rental organizations are extremely limited and primarily
based on estimates since most are privately owned and not required to make
public disclosures. In light of these estimations, it is the Committee's opinion
that the Company's level of overall compensation is competitive and in the low
to mid range on a comparative basis.
It is the position of both the Executive Compensation and the Stock Option
Committees that management's performance can best be evaluated based on its
ability to formulate, oversee and administer corporate strategy, which itself is
the product of Board action and direction. For the foreseeable future, that
strategy is to focus primarily on continued progress in the real estate
operation, principally the development of Flowerfield.
In establishing the compensation for Messrs. Maroney and Pitsiokos, the
Committee observes the policy set forth above for Executive Officers. No
specific weighting is applied to the various factors in determining total
compensation.
MEMBERS OF THE COMMITTEE
Robert F. Friemann, Chairman
Robert H. Beyer
Richard B. Smith
EMPLOYMENT CONTRACTS
The Company has a three year employment agreement with Mr. Maroney, who was
appointed President, Chief Executive Officer and Treasurer of the Company in
March, 1999. The employment contract provides for an annual base salary of
$209,500.00. The Company has also entered into a three-year employment contract
with Mr. Pitsiokos as Executive Vice President, General Counsel and Secretary of
the Company. Mr. Pitsiokos' employment contract provides for an annual base
salary of $152,500.00. Both contracts provide for a severance payment equivalent
to three years' salary, in addition to certain other benefits, in the event of a
change in control. These severance payments would amount to approximately
$1,086,000 in the event of a change in control.
1993 STOCK INCENTIVE PLAN
In 1993, the shareholders adopted a stock incentive plan (the "Plan") under
which participants may be granted Incentive Stock Options ("ISOs"),
Non-Qualified Stock Options ("NQSOs") or Stock Grants. The purpose of the Plan
is to promote the overall financial objectives of the Company and its
shareholders by motivating those persons selected to participate in the Plan to
achieve growth in shareholder value and retain the association of those
individuals who are instrumental in achieving this growth. Such options or
grants become exercisable at various intervals based upon vesting schedules as
determined by the Stock Option Committee. The options expire between October
2004 and May 2008.
11
The ISOs may be granted to employees and consultants of the Company at a
price not less than the fair market value on the date of grant. All such options
are authorized and approved by the Board of Directors, based on recommendations
of the Stock Option Committee.
ISOs may be granted along with Stock Appreciation Rights which permit the
holder to tender the option to the Company in exchange for stock, at no cost to
the optionee, that represents the difference between the option price and the
fair market value on date of exercise. NQSOs may be issued with Limited Stock
Appreciation Rights ("LSARS") which are exercisable, for cash, in the event of a
change of control. In addition, an incentive kicker may be provided for Stock
Grants, ISOs and NQSOs, which increases the number of grants or options based on
the market price of the shares at exercise versus the option price. A reload
feature may also be attached which permits the optionee to tender previously
purchased stock, in lieu of cash, for the purchase of the options and receive
additional options equal to the number of shares tendered.
AGGREGATED OPTION/LSAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/LSAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/LSAR'S AT OPTIONS/LSAR'S AT
ACQUIRED ON VALUE APRIL 30, 2003 APRIL 30, 2003 ($)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------
Stephen V. Maroney
President and CEO........... -- -- 60,780/0 $94,658/$0
Peter Pitsiokos
Exec. V.P. and Secretary.... -- -- 40,895/0 $62,392/$0
INCENTIVE COMPENSATION PLAN
The Company has an incentive compensation plan for all full-time employees
and members of the Board in order to promote shareholder value. The benefits of
the incentive compensation 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 Company's plan provides for a cash payment equal to
the difference between the 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
100,000 shares of Common Stock. The payment amount would be distributed to
eligible participants based upon their respective weighted percentages (ranging
from .5% to 18%).
TRANSACTIONS WITH CERTAIN RELATED PERSONS
Mr. Paul L. Lamb, Chairman of the Board of Directors, is a partner in the
law firm of Lamb & Barnosky, LLP, which performs legal services for the Company
and is paid its usual and customary fees for those services. In Fiscal Year
2003, total fees paid to Lamb & Barnosky, LLP were $119,201.
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 changes, 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, or
written representations from certain reporting persons, the Company believes
that none of the executive officers or directors were late in filing any
required Forms 3 or Forms 4 with the SEC for fiscal year 2003. A review of prior
year filings indicates that no 10% holder of Gyrodyne Common Stock failed to
file timely reports.
12
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Robert F. Friemann, a director of the Company, has been the subject of an
indictment originally filed October 26, 2001. On October 15, 2003, a superceding
indictment was filed reducing the charges. Mr. Friemann has entered a plea of
"not guilty." The Indictment arises from an investigation into the County of
Nassau's agreements with Benefit Plan Administrators, Inc. ("BPA") under which
BPA administered a self-insurance plan for health benefits for the County's
employees and retirees and their dependents. The Indictment alleges that
Mr. Friemann, who was the accountant for an insurance broker indicted in
connection with the BPA arrangement, assisted in certain transactions that had
the effect of money laundering and that certain tax returns prepared by
Mr. Friemann did not accurately reflect the nature of certain payments. The
indictment is currently the subject of a motion to dismiss for failure to
provide a speedy trial.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
The Board of Directors, upon the recommendation of the Audit Committee,
comprised entirely of outside directors, has appointed Holtz Rubenstein & Co.,
LLP ("HR") of 125 Baylis Road, Melville, New York 11747, as independent public
accountants of the Company and its subsidiaries for the current Fiscal Year, and
to perform such other professional services, if any, as may be required of them.
The appointment of HR has been ratified by the shareholders every year since
1990. The Board is requesting ratification of HR 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.
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 2004 will be permitted to
stand unless the Board finds other reasons for making the change.
AUDIT FEES. Audit fees with out of pocket expenses billed or expected to be
billed to the Company by HR for the audit of the Company's financial statements
for the fiscal year ended April 30, 2003 and for reviews of the Company's
financial statements included in the Company's quarterly reports on Form 10-QSB
for the last fiscal year totaled $38,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. No fees were
billed or are expected to be billed to the Company by HR for services provided
during the last fiscal year for the design and implementation of financial
information systems.
ALL OTHER FEES. Fees billed or expected to be billed to the Company by HR
for all other non-audit services, including tax-related services, provided
during the last fiscal year totaled $23,575.
Representatives of HR are expected to be present at the Annual Meeting, will
be given an opportunity to make a statement if they desire to do so and are
expected to be available at a designated time during the meeting to respond to
appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
THIS IS IDENTIFIED AS ITEM 2 ON THE ENCLOSED PROXY CARD.
13
FINANCIAL STATEMENTS
Accompanying this Proxy Statement is the Annual Report for the latest Fiscal
Year ended April 30, 2003 which includes audited Balance Sheets and Statements
of Income and Cash Flow for each of the two most recent fiscal years.
STOCKHOLDER'S PROPOSALS
If you wish to submit proposals to be included in our next Proxy Statement
for the 2004 Annual Meeting of Shareholders, we must receive them by August 11,
2004 pursuant to the proxy solicitation regulations of the SEC. SEC rules
contain requirements as to which shareholder proposals must be in the Proxy
Statement. Any such proposal will be subject to 17 C.F.R. 240.14a-8 of the rules
and regulations promulgated by the SEC.
In addition, under the Company's Bylaws, if you wish to nominate a director
or bring other business before an Annual Meeting:
You must be a shareholder of record entitled to vote and have given timely
notice in writing to the Secretary of the Company.
You 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;
Your notice must contain the specific information required in our Bylaws.
BY ORDER OF THE BOARD OF DIRECTORS
Peter Pitsiokos
Corporate Secretary
14
APPENDIX 1
GYRODYNE COMPANY OF AMERICA, INC.
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
GYRODYNE COMPANY OF AMERICA, INC. to be held at the Company's Flowerfield
Complex, St. James, New York 11780 on Tuesday, December 9, 2003 at 11:00 A.M.,
and any adjournment thereof, and revoking all proxies heretofore given, as
designated hereon. As to any other matter, the proxies shall be authorized to
vote in accordance with their best judgment. This proxy shall remain in effect
for a period of one year from its date.
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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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FOLD AND DETACH HERE
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.
A VOTE FOR ITEM 1 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
PROPOSAL 1: TO ELECT TWO DIRECTORS TO SERVE FOR A TERM OF THREE YEARS AND ONE
DIRECTOR TO SERVE FOR A TERM OF ONE YEAR AND UNTIL THEIR SUCCESSORS
SHALL BE ELECTED AND SHALL QUALIFY:
RICHARD B. SMITH TERM EXPIRING 2006 [ ] FOR [ ] WITHHELD
PAUL L. LAMB TERM EXPIRING 2006 [ ] FOR [ ] WITHHELD
RONALD J. MACKLIN TERM EXPIRING 2004 [ ] FOR [ ] WITHHELD
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), LINE THROUGH OR OTHERWISE
STRIKE OUT THE NAME OF SUCH NOMINEE(S).
A VOTE FOR ITEM 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
PROPOSAL 2: TO RATIFY THE ENGAGEMENT OF HOLTZ RUBENSTEIN & CO., LLP AS CERTIFIED
PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SIGNATURE DATED
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SIGNATURE------------------------------------------
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
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FOLD AND DETACH HERE
APPENDIX 2
GYRODYNE COMPANY OF AMERICA, INC.
ANNUAL MEETING OF SHAREHOLDERS
ATTENDANCE REGISTRATION
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Please print
Name
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Address
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Signature
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Please check one of the boxes below:
[ ] I am the record owner of common stock.
[ ] I am the beneficial owner of common stock (bank or broker or institutional
holders)
[ ] I hold a proxy from the shareholder of record or beneficial owner whose name
and address I have filled in below:
Name
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Address
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