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(State or other jurisdiction
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(Commission File
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(I.R.S. Employer
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of incorporation)
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Number)
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Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Liability Company Interests
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Waiver of plan benefits by directors: Director participants have agreed to waive all Bonus Plan benefits in exchange for an equivalent value of shares issuable under the Stock Plan (defined and described below), subject to shareholder approval. If the Stock Plan is approved by the shareholders, all benefits so waived by the director participants will be deemed void and not reallocated to any other participants in the Bonus Plan.
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$1,137,108 forfeited by retired directors returned to the Company: Prior to Amendment No. 5, the Bonus Plan provided that Bonus Plan benefits forfeited by retired director participants would be re-allocated among the remaining director participants pro rata. Nevertheless, under Amendment No. 5, such forfeited Bonus Plan benefits in the estimated amount of $1,137,108 have been removed from the pool and returned to the Company, irrespective of whether or not the shareholders approve the Stock Plan.
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Bonus rate: Bonus rate on property sale proceeds are modified as follows:
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For employees: 4.12% on up to $50,985,000 of net proceeds (net of commissions); 6.72% for incremental net sales above $50,985,000.
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For directors (assuming shareholders do not approve the Stock Plan): 5.30% of net proceeds (net of commissions).
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Delayed vesting: An employee participant will only vest in plan benefits triggered by property sales if he or she remains continuously employed through both the date of closing and the date of the Board’s irrevocable determination of a shareholder distribution; if employment terminates by death, disability or voluntary termination following substantial reduction in compensation (assuming no “cause” grounds for involuntary termination), however, the employee participant remains entitled to benefits only with respect to any property sales occurring within three years and yielding an internal rate of return of at least 4%.
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Benefits generally not payable until shareholders paid: Benefits not payable until liquidating cash distributions are paid to shareholders, except that employee participants will receive early payments if the cumulative amounts credited to the bonus pool bookkeeping account for employee participants equals or exceeds $500,000.
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Early sale incentive: If any property is sold on or before June 30, 2024, the bonus pool for employee participants will be funded with additional 1% of net sale price.
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Removal of price floor: Price floor hurdle for the sale of properties has been removed for all participants to eliminate the perception of any perverse incentive to avoid particular property sales that may not exceed the floor but which otherwise may be in the best interests of shareholders.
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Effective Date: If approved by the Company’s shareholders, the Stock Plan will be effective on the date of such shareholder approval and the grants set forth in Exhibit A thereto will be effective immediately upon shareholder approval of the Stock Plan. Shareholders are being asked to approve the Stock Plan at the Annual Meeting.
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Purpose: The purpose of the Stock Plan is to incentivize the current director participants in the Bonus Plan to exchange their interests in the Bonus Plan for shares in the Company issuable under the Stock Plan, which will allow for compensation plan separation between directors and employees and better alignment of interests between director participants and shareholders.
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Eligibility: Directors of the Company who were participants in the Bonus Plan are eligible to receive grants under the Stock Plan. As of the date of this proxy statement, the eligible directors are Paul Lamb, Ronald Macklin, Nader Salour and Richard Smith. All such individuals have agreed to exchange their Bonus Plan benefits for shares under the Stock Plan, subject to shareholder approval of the Stock Plan. Jan Loeb was not a participant in the Bonus Plan and will not be eligible to participate in the Stock Plan.
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Maximum Shares Available: The total number of shares authorized for issuance under the Stock Plan is 91,628 shares, or approximately 5.8% of the common shares outstanding at the Record Date after giving effect to the issuance of the Stock Plan shares.
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Administration: Pursuant to the terms of the Stock Plan, the Stock Plan will be administered and interpreted by a committee which will consist of either (i) the Board, or (ii) the President and at least two other directors appointed by the Board. The committee will have full power and authority to administer and interpret the Stock Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Stock Plan and for the conduct of its business as it deems necessary or advisable, to waive requirements relating to formalities or other matters that do not modify the substance of rights of participants or constitute a material amendment of the Stock Plan, to correct any defect or supply any omission of the Stock Plan or any grant document and to reconcile any inconsistencies in the Stock Plan or any grant document.
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Restricted Stock: Incentives under the Stock Plan will consist of grants of restricted stock. No shares issued under the Stock Plan, or any interest therein, will be transferrable by a participant, whether voluntarily or involuntarily, unless and until a liquidating distribution is made to the shareholders, except by will or by the laws of descent or distribution, and may not be subject to any voluntary or involuntary pledge, assignment, alienation, attachment, or similar encumbrance or transfer. All shares issued in connection with a grant will be subject to the terms, conditions, and restrictions set forth in the Company’s articles of organization, amended and restated limited liability company agreement, or other governing documents of the Company, as amended.
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Vesting: Vesting of shares issued under the Stock Plan occurs (i) in equal one-third tranches on each of the first three anniversaries of the grant date, and (ii) at such time as a liquidating distribution is made to the shareholders of the Company, subject to acceleration upon a liquidating distribution. Unvested Stock Plan shares will be forfeited by a participant if such participant is no longer serving on the Board at or prior to such time that liquidating distributions are paid to the shareholders other than as a result of death, disability or failure to be reelected.
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Amendments: The Board may amend, suspend or terminate the Stock Plan at any time, in its discretion, except that shareholder approval is required for any amendment that increases the number of shares available for grant, accelerates vesting or results in a material increase in benefits or a change in eligibility requirements.
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Section 409A: Section 409A of the Internal Revenue Code applies to compensation that individuals earn in one year but that is not paid until a future year, referred to as non-qualified deferred compensation. Because the shares issuable under the Stock Plan will be deemed to be issued in the same year in which they are earned, the Stock Plan and the shares issuable thereunder are not subject to Section 409A.
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Exhibit No.
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Description
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10.1
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10.2
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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GYRODYNE, LLC
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Date:September 11, 2023
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By:
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/s/ Gary Fitlin
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Name:
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Gary Fitlin
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Title:
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President, Chief Executive Officer, Chief Financial
Officer and Treasurer
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