AMENDMENTNUMBER 1 TOTHE GYRODYNECOMPANY OF AMERICA, INC. AMENDEDAND RESTATED EMPLOYMENT AGREEMENT DATED JANUARY 23, 2003 FORSTEPHEN V. MARONEY

1.

Specified Employee. The parties acknowledge that the Executive is currently a "Specified Employee" as defined under Section 5(b) below.

3.

a.

Defined. Section 3.1(F) provides that in the event of a Change in Control, the Executive may terminate the Executive's employment upon 30 days prior written notice of termination delivered not later than 3 months following a Change in Control. The Change in Control window period is revised to 90 days within any Change in Control to comply with Section 409A.

b.

Notice Provisions. Similar to a termination for Good Reason, the Executive must satisfy the provisions of Sections 2 and 3 of this Amendment in the event the Executive wishes to terminate the Executive's employment following a Change in Control.

4.

Severance Benefits. Section 3.2 provides that if the Executive's employment is terminated without cause (except in the event of death or Disability) or if the Executive's employment is terminated by the Executive for Good Reason or following a Change in Control, certain severance benefits are provided. Based upon Section 409A, the new severance benefits shall be as follows:

a.

The original Employment Agreement provides the Company would pay the Executive, on or before the date of termination, a lump sum payment equal to the sum of:

i.

The Executive's base salary and accrued vacation pay through the Termination Date (i.e., a "Separation from Service"); and

ii.

3 times the Executive's base salary.

b.

The Company previously agreed to continue to provide the Executive and his eligible spouse and dependents, for a period of 3 years, with the medical, hospitalization, dental and life insurance coverage in effect on the date of a termination. To the extent the Executive could not be provided such benefits, the Company is required to provide the economicequivalent of the benefits the Executive or the Executive's family would otherwise have been entitled to receive under such programs. However, such benefits were to be terminated on the date or dates the Executive becomes "eligible" to receive equivalent coverage or benefits under the plans and programs with a subsequent employer at an equivalent cost to the Executive (such coverage and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis). Section 409A permits certain welfare benefits to be paid following a Separation from Service, as long as such benefits are generally paid by the end of the second calendar year following a termination of employment Based upon Section 409A, the Company agrees to provide medical, hospitalization and dental coverage as permitted under COBRA or New York State continuation coverage until the expiration of the period in which such benefits may be continued. Thereafter, all benefits shall be continued as required under the Employment Agreement, with any payments being made as of the first day of each month which shall be deemed to be the applicable "fixed payment date" to avoid any deferral of compensation.

5.

Definitions. Due to the changes enacted under Section 409A of the Code, the following new definitions are added to the Employment Agreement:

a.

"Separation from Service" or Termination of Employment means the Executive is no longer employed by Gyrodyne or any Related Entities within or outside of the United States on account of a termination of employment, retirement, Disability or death. Consistent with Treasury Regulation Section 1.409A-l, or any subsequent guidance under Section 409A of the Code, no Separation from Service shall occur if the Executive continues to perform services as a consultant or an employee in accordance with the following rules:

i.

Leave of Absence. For purposes of Section 409A, the employment relationship is treated as continuing in effect while the Executive is on military leave, sick leave, or other bona fide leave of absence, as long as the period of leave does not exceed 6 months, or if longer, as long as the Executive's right to reemployment with the Employer provided either by statute or contract. Otherwise, after a 6 month leave of absence, the employment relationship if deemed terminated.

ii.

Part-Time Status. Whether or not a termination of employment occurs is determined based upon all facts and circumstances. However, in the event that services provided by the Executive are insignificant, a Separation from Service shall be deemed to have occurred. For purposes of Section 409A, if the Executive is providing services to Gyrodyne or any Related Entities at a rate that is at least equal to 20% of the services rendered, on average, during the immediately preceding 3 full calendar years of employment (or such lesser period), and the annual compensation for such services is at least 20% of the average annual compensation earned during the final 3 full calendar years of employment (or such lesser period), no termination shall be deemed to have occurred since such services are not insignificant.

iii.

Consulting Services. Where the Executive continues to provide services to Gyrodyne or any Related Entities in a capacity other than as an employee, a Separation from Service shall not be deemed to have occurred if the Executive is providing services at an annual rate that is 50% or more of the services rendered, on average, during the immediately preceding 3 full calendar years of employment. (or such lesser period) and the annual remuneration for such services is 50% or more of the annual remuneration earned during the final 3 full calendar years of employment (or such lesser period).

b. 

"Specified Employee” means a Key Employee, as defined under Section 416 of the Code, who is employed by Gyrodyne or any Related Entities which has its stock publicly traded on an established securities market. The stock of Gyrodyne Company of America, Inc., is traded on the NASDAQ Exchange. For purposes of the Agreement, the "Specified Employee Identification Date" shall be each December 31, and the "Specified Employee Effective Date" shall also be December 31. Specified Employees shall be determined by the Compensation Committee on an annual basis for purposes of all nonqualified deferred compensation plans and any other programs in accordance with the provisions of Section 409A of the Code.