U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K/A
Amendment No. 1
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from MAY 1, 2006 to DECEMBER 31, 2006
Commission file number 0-1684
GYRODYNE COMPANY OF AMERICA, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 11-1688021
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 FLOWERFIELD, SUITE 24, ST. JAMES, NY 11780
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (631) 584-5400
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK,
$1.00 PAR VALUE
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all the reports
required to be filed by Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The aggregate market value of voting common stock held by non-affiliates of the
registrant on June 30, 2006 was $33,666,528. The aggregate market value was
computed by reference to the closing price on such date of the common stock as
reported on the NASDAQ Stock Market. Shares of common stock held by each
executive officer and director and by each person who to the registrant's
knowledge owns 5% or more of the outstanding voting stock have been excluded in
that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination for other
purposes.
On April 10, 2007, 1,289,878 shares of the Registrant's common stock, par value
$1 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
1
TABLE OF CONTENTS TO FORM 10-K/A
--------------------------------
FOR THE TRANSITION PERIOD FOR THE EIGHT MONTHS ENDED DECEMBER 31, 2006
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ITEM # PAGE
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PART III
10 -Directors, Executive Officers and Corporate Governance 4
11 -Executive Compensation 6
12 -Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 14
13 -Certain Relationships and Related Transactions, and Director
Independence 15
14 -Principal Accounting Fees and Services 17
PART IV
15 -Exhibits and Financial Statement Schedules 17
-Signatures 18
2
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (the "Amended Report") amends the original
Transition Report on Form 10-K of Gyrodyne Company of America, Inc. (the
"Company") for the fiscal year ended December 31, 2006, filed with the
Securities and Exchange Commission, on March 15, 2007 (the "Original Report"),
to add certain information required by the following items of Form 10-K:
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Item 14. Principal Accounting Fees and Services
The Company hereby amends Items 10, 11, 12, 13 and 14 of Part III of the
Original Report by deleting the text of such Items 10, 11, 12, 13 and 14 in
their entirety and replacing them with the information provided below under the
respective headings. This Amended Report does not affect any other items in the
Original Report. As a result of the Amended Report, the Company is also filing
the certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 as
an exhibit to this Amended Report.
Except as otherwise expressly stated for the items amended in this Amended
Report, this Amended Report continues to speak as of the date of the Original
Report and the Company has not updated the disclosure contained herein to
reflect events that have occurred since the filing of the Original Report.
Accordingly, this Amended Report should be read in conjunction with the Original
Report and the Company's other filings made with the SEC subsequent to the
filing of the Original Report.
The statements made in this Amended Report that are not historical facts contain
"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 the Company's SEC reports. These and other matters we discuss in this Amended
Report may cause actual results to differ from those we describe. The Company
assumes no obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise.
3
PART III
Item 10 Directors, Executive Officers and Corporate Governance
(a) The following table lists the names, ages and positions of all executive
officers and directors and all persons nominated or chosen to become such.
Each director has been elected to the term indicated. Directors whose term
of office ends in 2007 shall serve until the next Annual Meeting of
Stockholders or until their successors are elected and qualified.
Name & Principal Occupation or Employment Age First Became a Current Board
Director Term Expires
--------------------------------------------------------------------------------------------------
Stephen V. Maroney 65 1996 2007
President, CEO, CFO, Treasurer, and Director of
the Company
Peter Pitsiokos 47 ---
COO, Secretary and Chief Compliance Officer of
the Company
Frank D'Alessandro 60 ---
Controller of the Company
Paul L. Lamb 61 1997 2009
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors of the Company
Robert H. Beyer 74 1977 2008
Consultant
Director of the Company
Philip F. Palmedo 73 1996 2007
Managing Director and Chairman of Kepler Asset
Management and Chairman of International Resources
Group
Director of the Company
Elliot H. Levine 54 2004 2008
CPA and Senior Member of Levine & Seltzer, LLP
Director of the Company
Richard B. Smith 52 2002 2009
Vice President, Commercial Banking Division,
First National Bank of L. I.
Director of the Company
Ronald J. Macklin 45 2003 2007
Assistant General Counsel for KeySpan Corporate
Services
Director of the Company
Nader G.M. Salour 48 2006 2009
Principal, Cypress Realty of Florida, LLC
Director of the Company
4
(b) Business Experience
Stephen V. Maroney, age 65, was initially engaged by the Company as an outside
consultant in June 1996 and elected to the Board of Directors in July of that
same year. Mr. Maroney is the former President of Extebank, a Long Island based
commercial bank with a presence in Nassau and Suffolk Counties and New York
City. Prior to that appointment, he served as Extebank's Chief Financial
Officer. Mr. Maroney was appointed to the position of President, CEO and
Treasurer by the Gyrodyne Board of Directors on March 14, 1999. His career on
Long Island spans a period of over 40 years and includes involvement in numerous
civic, charitable and professional organizations.
Peter Pitsiokos, age 47, joined the Company in July 1992 as its Assistant
Secretary and General Counsel and has been the Company's Chief Operating Officer
and Chief Compliance Officer since 2004. He has also been Secretary of the
Company for over five years. 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. He holds a Law degree from Villanova University and a BA degree
from the State University of New York at Stony Brook.
Frank D'Alessandro, age 60, 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.
Paul L. Lamb, age 61, has been a Director since 1997 and became Chairman of the
Board on March 14, 1999. He is a founding partner in the law firm of Lamb &
Barnosky, LLP; a past President of the Suffolk County Bar Association; and a
Dean of the Suffolk Academy of Law. He holds a B.A. from Tulane University, a
J.D. from the University of Kentucky and an LL.M. from the University of London,
England.
Robert Beyer, age 74, has been a Director of the company since November 1977. He
is also a Director of the Company's subsidiaries. He retired from the United
States Naval Reserve in 1993 with the rank of Captain. He retired from his
position as Senior Inertial Systems Engineer with the Naval Air Systems Command
in 1998. He has an electrical engineering degree from New York University and a
graduate degree in International Business from Sophia University in Tokyo,
Japan. Mr. Beyer was employed by Gyrodyne from 1962-1973. He was stationed in
Japan as a Technical Representative for the Company's remotely piloted
helicopters from 1963 to 1970.
Philip F. Palmedo, age 73, was appointed to the Board of Directors in July 1996.
Mr. Palmedo is currently Managing Director and Chairman of Kepler Asset
Management as well as Chairman of International Resources Group and former
President of the Long Island Research Institute. He has shepherded numerous
fledgling businesses into the financial and technological markets completing
several financing and joint venture technology agreements. He has M.S. and Ph.D.
degrees from M.I.T.
Elliot H. Levine, age 54, was appointed to the Board of Directors in October
2004. Mr. Levine is a founding member of the accounting firm Levine & Seltzer,
LLP Certified Public Accountants, a graduate (1975) of Queens College, City
University of New York. He became a member of the American Institute of
Certified Public Accountants in February, 1978. Mr. Levine's work experience
includes five years at Arthur Young, ten and a half years as partner and
director of taxes of Leslie Sufrin & Co. P.C., a one year tenure as senior tax
manager at Margolin, Winer & Evans CPAs and over 12 years as senior member of
Levine & Seltzer.
Richard B. Smith, age 52, was appointed to the Board of Directors in November
2002. Mr. Smith is currently a Vice President in the Commercial Banking Division
of the First National Bank of Long Island. He previously served as Senior Vice
President for Private Banking at Suffolk County National Bank until February,
2005. Previously, he worked for 10 years at Key Bank (Dime Savings Bank) and for
3 years at L.I. Trust/Apple Bank. He received an MBA in Finance from SUNY Albany
in 1983. Mr. Smith serves as the Mayor of the Incorporated Village of
Nissequogue and as a Trustee of the Smithtown Historical Society and also serves
as a Trustee for St. Catherine's Medical Center in Smithtown, NY.
Ronald J. Macklin, age 45, was appointed to the Board of Directors in June 2003.
Mr. Macklin currently serves as Assistant General Counsel for KeySpan Corporate
Services where he has held various positions within the Office of General
Counsel from 1991 to present. Previously, he was associated with the law firms
of Roseman & Colin and Cullen & Dykman. He received a B.A. degree from Stony
Brook University and his Juris Doctorate from Union University's Albany Law
School.
5
Nader G.M. Salour, age 48, was appointed to the Board of Directors in October
2006 and then elected by the shareholders at the Company's annual meeting in
December 2006. Mr. Salour has been a Principal of Cypress Realty of Florida
since 2000. He has served as President of Abacoa Development Company, from June
1996 to June 2006, and as a Director of Abacoa Partnership for Community from
December 1997 to present.
(c) Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires that the Company directors, executive
officers, and any person holding more than ten percent ("10% Holder") of
Gyrodyne Common Stock, $1.00 par value per share, file with the SEC reports of
ownership changes, and that such individuals furnish the Company with copies of
the reports.
Based solely on the Company's review of copies of Forms 3 and 4 and amendments
thereto received by it during the eight months ending December 31, 2006 and
Forms 5 and amendments thereto received by the Company with respect to the eight
month period and any written representations from certain reporting persons that
no Form 5 is required, Gyrodyne believes that none of the Company's executive
officers, directors or 10% Holders failed to file on a timely basis reports
required by section 16(a) of the Exchange Act during the eight months ended
December 31, 2006 or prior fiscal years, except that Nader G.M. Salour filed a
Form 3 nine days after the deadline for filing such Form.
(d) Audit Committee and Audit Committee Financial Expert
The Board of Directors has a separately-designated Audit Committee established
in accordance with section 3(a)(58)(a) of the Exchange Act, which currently
consists of Messrs. Smith, Levine and Macklin. All members are "financially
literate" and have been determined to be "independent" within the meaning of SEC
regulations and NASDAQ rules. The Board of Directors 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. In addition, Mr. Levine
had 10.5 years of accounting experience as a partner and director of taxes at
Leslie Sufrin & Co. P.C. as well as several other years of experience in the
field of public accounting.
(e) Code of Business Conduct and Ethics
The Company has adopted a written Code of Business Conduct and Ethics that
applies to all of its directors, officers and employees. It is available on the
Company's website at www.gyrodyne.com and any person may obtain without charge a
paper copy by writing to the Secretary at the address set forth on page 1. Any
amendments to the Code of Business Conduct and Ethics, or waiver thereof, will
be disclosed on the website promptly after such amendment or waiver.
Item 11 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
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.
6
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.
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
recommendations to the Board with respect to executive compensation for
executive officers, the Company's incentive compensation plan and any
equity-based plans that are subject to Board approval. 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
7
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. Beginning in 2006, 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.
Incentive Compensation Upon a Change-in-Control
The Company believes 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 to promote long term value
maximization. The Company established an incentive compensation plan in 1999 for
all full-time employees and members of the Board. 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, 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 incentive compensation plan with the balance being
distributable to other eligible employees (11.5%) and members of the Board of
Directors (56.5%). There are currently 110,000 units granted under the Incentive
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 considered the application of Section 409A to the
Incentive Program and expects to continue to evaluate the Incentive Plan to
determine if any changes are required to the Plan by December 31, 2007 in order
to comply with the provisions of Section 409A of the Internal Revenue Code.
In the event of death, the beneficiary of a participant in the incentive
compensation plan is entitled to exercise a deceased participant's vested
benefit. The decedent's benefit would be paid to the beneficiary, or if there is
no beneficiary, to the personal representative of the decedent's estate. Upon
death, payments can be made even without a change-in-control. Otherwise, upon a
termination of employment, benefits are lost and disability or death would have
no impact on vesting or payment under the incentive compensation plan.
Payments under the Incentive Plan can result in a deferral of compensation to
the extent any employees or directors have been granted units at a discount,
after October 4, 2004. However, no actual deferral of compensation is intended
to exist under the Incentive Plan since immediate payment is required upon a
Change in Control, whether or not any other adverse employment or other events
occur.
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. However, the executives continue to
benefit from any appreciation of, and distributions with respect to, shares
issued to them upon exercise of previously granted options which serves to
strengthen their alignment with shareholder interests. 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.
8
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. 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 in the event of a
Change-In-Control. 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:
o The executive, spouse and dependents receive medical, hospitalization,
dental, 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 1 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.
9
Cash Severance and Change in Control Payments
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 or Change in Control assuming the
executive officers were terminated on December 31, 2006:
Cash Severance and Change in Control Payments
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
========== ==========
Nonqualified Deferred Compensation Benefits
The executive officers are not entitled to any deferred compensation benefits
other than pursuant to the incentive compensation plan, which results in a
deferral of certain compensation and benefits until a change-in-control or death
occurs.
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.
Equity Ownership Guideline
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 11.50% of the Company's outstanding shares.
10
(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 $100,000 in such capacity. The following table sets
forth the total compensation paid or accrued by the Company for services
rendered during the aforementioned periods to each of the Company's Chief
Executive Officer and Chief Operating Officer:
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------------------------
Change in
Non-equity pension value
Name and principal Salary Bonus Stock Option incentive and nonqualified All other Total
position Year ($) ($) awards awards plan deferred compensation ($)
($) ($) compensation compensation ($)
($) earnings
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
------------------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney 2006(C) 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 (A) 307,334
2005 209,500 0 0 0 0 66,938 29,688 (A) 306,126
2004 209,500 0 0 295,225(D) 0 84,800 49,628 (A) 639,153
------------------------------------------------------------------------------------------------------------------------------------
Peter Pitsiokos 2006(C) 108,224 0 0 0 0 48,322 0 156,546
COO and Secretary 2006 155,370 8,290 0 0 0 12,565 0 176,225
2005 152,500 10,000 0 0 0 47,632 0 210,132
2004 152,500 0 0 227,745(D) 0 80,798 70,188 (B) 531,231
------------------------------------------------------------------------------------------------------------------------------------
(A) In FY 06 and in FY 05, 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 FY 04, 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 amounts of perquisites and other personal benefits,
securities or property to any of the current executives does not exceed the
lesser of $50,000 or 10% of the total of annual salary and bonuses reported
above for such 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 04, Mr. Pitsiokos exercised 6,600 options with SAR's and received
2,922 shares with a value of $70,188.
(C) Eight months ended December 31, 2006.
(D) Represents intrinsic value of 17,500 and 13,500 stock options at $16.87 per
share for Messrs. Maroney and Pitsiokos, respectively.
During the eight months ended December 31, 2006, there were no Option/SAR Grants
issued to any directors or officers.
OUTSTANDING EQUITY AWARDS AT 2006 YEAR-END
The following table sets forth information regarding each unexercised option
held by each of our named executive officers as of December 31, 2006:
-------------------------------------------------------------------------------------------------
Number of Number of Option Option
securities securities exercise expiration
underlying underlying price date
unexercised unexercised ($)
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
-------------------------------------------------------------------------------------------------
11
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 of Payments During
Credited Service (#) Accumulated Last FY
Benefit ($)
($)(A)
(a) (b) (c) (d) (e)
-----------------------------------------------------------------------------------------------------
Stephen V. Maroney Gyrodyne Company 7 346,539 0
of America, Inc.
Pension Plan
-----------------------------------------------------------------------------------------------------
Peter Pitsiokos Gyrodyne Company 13 266,348 0
of America, Inc.
Pension Plan
-----------------------------------------------------------------------------------------------------
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 of Payments During
Credited Service (#) Accumulated Last FY
Benefit ($)
($)(A)
(a) (b) (c) (d) (e)
-----------------------------------------------------------------------------------------------------
Stephen V. Maroney Gyrodyne Company 6 272,212 0
of America, Inc.
Pension Plan
-----------------------------------------------------------------------------------------------------------
Peter Pitsiokos Gyrodyne Company 12 218,026 0
of America, Inc.
Pension Plan
-----------------------------------------------------------------------------------------------------------
(A) The amounts presented in this column reflect the present value of each named
executive officer's accumulated benefits under the 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.
(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 $24,000 a year which
commenced in September, 2004. The Company continued its policy which states that
Directors who are also employees of the Company do not receive any additional
compensation for their services as Directors.
The following table shows the compensation earned by each of our non-officer
directors for the eight months ended December 31, 2006:
----------------------------------------------------------------------------------------------------------------
Name Fees Earned Stock Option Non-Equity Change in All Other Total
or Paid in Awards Awards Incentive Plan Value and Compensation ($)
Cash ($) ($) Compensation Nonqualified ($)
($) ($) Deferred
Compensation
Earnings
(a) (b) (c) (d) (e) (f) (g) (h)
------------------------------------------------------------------------------------------------------------------
A Paul L. Lamb 32,000 0 0 0 0 0 32,000
------------------------------------------------------------------------------------------------------------------
12
------------------------------------------------------------------------------------------------------------------
B Robert H. Beyer 17,500 0 0 0 0 0 17,500
------------------------------------------------------------------------------------------------------------------
C Philip F. Palmedo 16,500 0 0 0 0 0 16,500
------------------------------------------------------------------------------------------------------------------
D Elliot H. Levine 16,500 0 0 0 0 0 16,500
------------------------------------------------------------------------------------------------------------------
E Richard B. Smith 20,500 0 0 0 0 0 20,500
------------------------------------------------------------------------------------------------------------------
F Ronald J. Macklin 20,000 0 0 0 0 0 20,000
------------------------------------------------------------------------------------------------------------------
G Nader G.M. Salour 7,000 0 0 0 0 0 7,000
------------------------------------------------------------------------------------------------------------------
The following table shows the compensation earned by each of our non-officer
directors for the twelve months ended April 30, 2006:
----------------------------------------------------------------------------------------------------------------
Name Fees Earned Stock Option Non-Equity Change in All Other Total
or Paid in Awards Awards Incentive Plan Value and Compensation ($)
Cash ($) ($) 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 FY 06, the above named directors exercised 1,375 director options with a
value of $41,685.
(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) Report of the Compensation Committee
The Compensation Committee of the Board of Directors has reviewed and discussed
the Compensation Discussion and Analysis section of this Transition Report on
Form 10-K/A 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 Transition Report on
Form 10-K/A.
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.
13
Item 12 Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
(a) The following table sets forth certain information as of April 10, 2007
regarding the beneficial ownership of the Company's common shares by (i) each
person who the Company believes to be beneficial owner of more than 5% of its
outstanding common shares, (ii) each present director, (iii) each person listed
in the Summary Compensation Table under "Executive Compensation," and (iv) all
of the Company's present executive officers and directors as a group.
Amount and Percent of
Nature of Class (9)
Name and Address Beneficial
Of Beneficial Owner Ownership
Common Stock $1 Par Value More Than 5% Shareholders
--------------------------------------------------------------------------------------------------------------
Bulldog Investors/Goldstein/Dakos 214,581(1) 16.64
60 Heritage Drive
Pleasantville, NY 10570
Gerard Scollan 91,095(2) 7.06
80 Browns River Road
Sayville, NY 11782
River Road Asset Management, LLC 79,497(3) 6.16
462 South Fourth Street, Suite 1600
Louisville, KY 40207
Directors and Executive Officers
--------------------------------------------------------------------------------------------------------------
Stephen V. Maroney 81,087(4) 6.29
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
Peter Pitsiokos 16,175(5) 1.25
c/o Gyrodyne Company of America, Inc.
1 Flowerfield, Suite 24
St. James, NY 11780
Paul L. Lamb 23,364(6) 1.81
c/o Lamb & Barnosky, LLP
534 Broadhollow Road
Melville, NY 11747
Robert H. Beyer 13,802(7) 1.07
10505 Indigo Lane
Fairfax, Virginia 22032
Philip F. Palmedo 12,749 (8)
4 Piper Lane
St. James, NY 11780
Richard B. Smith 1,000 (8)
111 Boney Lane
Nissequogue, NY 11780
14
Ronald J. Macklin 200 (8)
c/o Keyspan
175 E. Old Country Road
Hicksville, NY 11801
Elliot H. Levine 0 (8)
c/o Levine & Seltzer, LLP
150 East 52nd Street
New York, NY 10022
Nader G.M. Salour 0 (8)
c/o Cypress Realty of Florida, LLC
1200 University Boulevard, Suite 210
Jupiter, FL 33458
All executive officers and 148,377 11.50
directors as a group (9 persons)
(1) On April 2, 2007, Bulldog Investors, Phillip Goldstein and Andrew Dakos
filed a joint Schedule 13D/A with the Securities and Exchange Commission stating
that Bulldog Investors, a group of investment funds, Phillip Goldstein and
Andrew Dakos beneficially own an aggregate of 214,581 shares of Gyrodyne stock.
Power to dispose and vote securities resides either with Mr. Goldstein, Mr.
Dakos or with clients. Three thousand shares previously reported were in
accounts that are no longer managed by the reporting persons.
(2) Includes 88,840 shares of Company 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 Gyrodyne stock and the sole power to vote or direct the vote of 53,572
shares.
(4) 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.
(5) Does not include his wife's and minor children's ownership of 1,089 shares
in which he denies any beneficial interest.
(6) Includes 13,747 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.
(7) Does not include his wife's ownership of 1,301 shares in which he denies any
beneficial interest.
(8) Less than 1%.
(9) The percent of class is calculated on the basis of the number of shares
outstanding, which is 1,289,878 as of April 10, 2007.
Item 13 Certain Relationships and Related Transactions, and Director
Independence
Certain Relationships and Related Transactions
The Company had a mortgage receivable in the original amount of $1,800,000 due
from Sco Properties, Inc. which was paid in full in August, 2005. Mr. Scollan,
president of Sco Properties, Inc., is considered a principal shareholder of the
Company because he has beneficial ownership of 7.06% of the Company shares. The
terms of the mortgage are described in greater detail in Note 4 of the
consolidated financial statements. The Company believes that the terms of the
mortgage were no less favorable to the Company than could have been obtained
from an unaffiliated third party. The Company received $15,459 in interest
during fiscal year ended April 30, 2006 and $86,361 in the prior fiscal year.
Interest payments received in fiscal year ended April 30, 2006 were lower than
in fiscal 2005 as the result of the prepayment of the remainder of the
principal.
15
The Company had engaged the firm of Lamb & Barnosky, LLP as primary outside
legal counsel until December 31, 2004. Director Lamb is a partner in the firm to
which Gyrodyne incurred legal fees of $3,193, $7,309, $109,550 and $228,962 for
the eight months ended December 31, 2006 and the years ended April 30, 2006,
2005 and 2004, respectively. As of January 1, 2005 the aforementioned law firm
is no longer primary outside legal counsel.
No loans were made to any officer, director, or any member of their immediate
families during the eight months ended December 31, 2006, nor were any loan
amounts due and owing the Company or its subsidiaries from those parties at
December 31, 2006.
The Company has a policy that comprises of certain relationships and related
transactions that is set forth in the Company's Code of Business Conduct and
Ethics ("Code of Ethics"). 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. 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. Thus, in those instances
where an employee faces a potential conflict of interest the employee should
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 shall have the right to
determine in advance that any such action or transaction does not constitute a
conflict of interest in violation of this Code of Ethics.
Director Independence
As required under applicable Nasdaq Marketplace Rules, a majority of the members
of a listed company's board of directors must qualify as "independent," as
affirmatively determined by the board of directors. The Company's Board of
Directors consults with counsel to ensure that the Board of Directors'
determinations are consistent with all relevant securities and other laws and
regulations regarding the definition of "independent," including those set forth
in pertinent Nasdaq Marketplace Rules, as in effect from time to time.
The Board of Directors has three standing committees: an Audit Committee, an
Executive Compensation Committee and a Nominating Committee. The Board of
Directors has determined that each current member of each committee meets the
applicable rules and regulations regarding independence for such committee,
including those set forth in pertinent Nasdaq Marketplace Rules, and that each
member is free of any relationship that would interfere with his individual
exercise of independent judgment.
Consistent with these considerations, after review of all relevant transactions
and relationships between each director or any of his family members, and our
senior management, our independent registered public accounting firm and us, the
Board of Directors affirmatively has determined that all of the directors are
independent directors within the meaning of the applicable Nasdaq Marketplace
Rules, except for Stephen V. Maroney, our Chief Executive Officer. As required
under applicable Nasdaq Marketplace Rules, in 2006 our independent directors met
in regularly scheduled executive sessions at which only independent directors
were present.
16
Item 14 Principal Accounting Fees and Services
The following is a summary of the fees billed to the Company by Holtz Rubenstein
Reminick LLP, its independent auditors, for professional services rendered for
the eight months ended December 31, 2006 and the fiscal years ended April 30,
2006, 2005 and 2004:
Eight Months
Ended
December 31, Fiscal Years Ended April 30,
Fee Category 2006 2006 2005 2004
------------------------- ---------- ---------- ---------- ----------
Audit Fees (1) $ 69,000 $ 51,600 $ 43,100 $ 40,000
Audit-Related Fees (2) 9,217 3,500 17,444 8,800
Tax Fees (3) 25,346 29,000 22,900 13,100
All Other Fees (4) - - - -
---------- ---------- ---------- ----------
Total Fees $ 103,563 $ 84,100 $ 83,444 $ 61,900
========== ========== ========== ==========
(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, 2005 and 2004,
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 Reminick LLP, the Company's principal accountants,
other than those disclosed above.
The Audit Committee is responsible for the appointment, compensation and
oversight of the work of the independent auditors and approves in advance any
services to be performed by the independent auditors, whether audit-related or
not. The Audit Committee reviews each proposed engagement to determine whether
the provision of services is compatible with maintaining the independence of the
independent auditors. The Audit Committee has determined not to adopt any
blanket pre-approval policies or procedures. All of the fees shown above were
pre-approved by the Audit Committee.
PART IV
Item 15 Exhibits and Financial Statement Schedules
(b) Exhibits: The exhibit filed as part of this report is listed below and this
list is intended to comprise the exhibit index:
31.1* Rule 13a-14(a)/15d-14(a) Certification
* Filed as part of this Amended Report.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GYRODYNE COMPANY OF AMERICA, INC.
/S/ Stephen V. Maroney
------------------------------------------------------------------------
Stephen V. Maroney, President, Treasurer and Principal Executive Officer
Date: April 27, 2007
/S/ Frank D'Alessandro
------------------------------------------------------------------------
Frank D'Alessandro, Controller
Date: April 27, 2007
********************
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/S/ Richard B. Smith
------------------------------------------------------------------------
Richard B. Smith, Director
Date: April 27, 2007
/S/ Elliot H. Levine
------------------------------------------------------------------------
Elliot H. Levine, Director
Date: April 27, 2007
/S/ Ronald J. Macklin
------------------------------------------------------------------------
Ronald J. Macklin, Director
Date: April 27, 2007
/S/ Stephen V. Maroney
------------------------------------------------------------------------
Stephen V. Maroney, Director
Date: April 27, 2007
/S/ Paul L. Lamb
------------------------------------------------------------------------
Paul L. Lamb, Director
Date: April 27, 2007
18