Gyrodyne Reaches Governance Agreement with Star Equity Fund, Reduces Board Size and Freezes Compensation

Gyrodyne, LLC has entered into an agreement with Star Equity Fund, LP that resolves potential proxy contest issues and implements several governance changes. Under the agreement, Star Equity Fund has withdrawn its slate of nominees for election at the 2025 annual shareholders meeting, and Gyrodyne will reduce its board size from five to four directors while freezing director compensation and limiting the aggregate fee paid to the Chairman to $65,000.

The agreement represents a significant development in corporate governance practices within the real estate investment sector. Richard Smith will be the sole nominee standing for election at the 2025 annual shareholders meeting as part of the board reduction. Star Equity has also agreed to certain customary standstill provisions, which typically restrict activist investors from pursuing additional proxy contests or other shareholder actions for a specified period. The full agreement will be filed in a Current Report on Form 8-K with the Securities and Exchange Commission, providing transparency to all shareholders.

This settlement reflects Gyrodyne's ongoing commitment to constructive engagement with shareholders as part of its efforts to strengthen governance, enhance transparency and drive long-term value creation. The company's approach demonstrates how real estate investment firms can work collaboratively with activist shareholders to address governance concerns while maintaining focus on strategic objectives. Gary Fitlin, Gyrodyne's President and Chief Executive Officer, stated that the company appreciates the thoughtful input from Star Equity and the broader shareholder base, noting that their perspectives have strengthened efforts to complete property sales and deliver maximum value to shareholders.

Jeff Eberwein, manager of Star Equity Fund, expressed satisfaction with the collaborative approach, stating that following constructive discussions with the company, they are pleased to have worked with the Board to enhance governance and further align with shareholders' interests. The agreement comes as Gyrodyne continues to execute its strategy of seeking value-enhancing entitlements for its properties, including a 63-acre site on Long Island and a medical office park in Cortlandt Manor, New York. Additional information about the Company may be found on its web site at https://www.gyrodyne.com.

The governance changes also mark a transition in board leadership, with Nader Salour, Chairman of Gyrodyne's Nominating Committee, expressing gratitude to Paul Lamb for his extraordinary 28 years of service to the company. Salour noted that Lamb's steady leadership and strategic vision were instrumental in guiding the company through periods of challenge and transformation, leaving behind a legacy of integrity and commitment to stakeholders. While Lamb will not stand for re-election, he will continue as a significant shareholder and valued supporter of the company's long-term success.