SCHEDULE: Star Equity Fund and Gee Group Ink Cooperation Deal

Gee Group Inc. and Star Equity Fund have entered into a cooperation agreement to declassify the board and resolve proxy contest matters.

Summary

• Star Equity Fund, LP, along with its affiliates, has entered into a Cooperation Agreement with Gee Group Inc. (the Company) effective August 21, 2026.
• Star Equity Fund beneficially owns 6,285,065 shares of Gee Group Inc. common stock, representing approximately 5.72% of the outstanding shares.
• The agreement aims to declassify the Company's Board of Directors so that a majority is fully declassified by the 2027 annual meeting.
• This includes amending the bylaws to ensure directors elected at the 2026 meeting serve a term expiring at the 2027 meeting, and subsequent directors serve one-year terms.
• Star Equity Fund has agreed to withdraw its nomination of Richard Coleman for the 2026 annual meeting and will not present a proposal to remove directors.
• The agreement includes a voting commitment, a standstill provision, mutual non-disparagement clauses, and terminates on the opening of the advance notice period for the 2027 annual meeting or 120 days prior to the 2026 annual meeting's anniversary.
• The Company will reimburse Star Equity Fund for $50,000 in legal fees and expenses related to this matter.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive development, indicating a resolution of potential proxy contest and a move towards improved corporate governance, which is generally favorable for shareholder value.

Positives

• Resolution of a potential proxy contest, leading to a more stable governance environment.
• Agreement to declassify the board, which can lead to increased director accountability and shareholder responsiveness.
• Star Equity Fund's commitment to vote in accordance with the Board's recommendations on most matters.
• Mutual non-disparagement clause promotes a more constructive relationship between the company and the activist investor.
• The Company will reimburse Star Equity Fund $50,000 for expenses, acknowledging their role in driving governance changes.

Negatives

• The agreement requires the Company to amend its bylaws and board structure, which may involve administrative effort and potential disruption.
• Star Equity Fund's voting commitment is subject to exceptions based on ISS/Glass Lewis recommendations and extraordinary transactions, allowing for potential divergence from the Board's stance.

Risks

• Potential for future disagreements if the declassification process or subsequent board dynamics do not meet Star Equity Fund's expectations.
• The standstill provisions limit Star Equity Fund's ability to engage in certain activism for a defined period, but this could be a risk if the Company's performance deteriorates significantly.

Future Outlook

The agreement focuses on corporate governance changes, specifically the declassification of the board, with the goal of enhancing shareholder alignment and accountability. The cooperation is set to last until the lead-up to the 2027 annual meeting.

Management Comments

• The Company and Star Equity desire to enter into this Agreement regarding the Company's corporate governance and certain other matters.
• The Company, the Board and all applicable committees of the Board shall take all necessary actions to declassify the structure of the Board so that a majority of the Board is fully declassified at the 2027 Annual Meeting.

Industry Context

StockSavvy.ai notes that this type of cooperation agreement, where an activist investor and a company resolve proxy disputes through governance concessions, is a common strategy in the current corporate landscape. It often signals a move towards greater shareholder influence and a focus on long-term value creation.

Management Changes

Corporate Governance

Legal Proceedings

• Star Equity Fund withdrew its nomination letter dated June 1, 2026, and agreed not to present a business proposal to remove directors at the 2026 Annual Meeting, thereby avoiding a proxy contest.

Stakeholder Impact

• Shareholders: Potential for increased board accountability and responsiveness to shareholder interests due to board declassification.
• Management: May face increased scrutiny and pressure to perform given the declassified board structure.
• Directors: Will transition to one-year terms, potentially increasing their focus on short-term performance and shareholder sentiment.

Next Steps

• The Company will take necessary actions to declassify the Board of Directors, aiming for a majority declassification by the 2027 Annual Meeting.
• Star Equity Fund will withdraw its nomination letter and refrain from presenting a business proposal to remove directors at the 2026 Annual Meeting.
• Both parties will issue a joint press release and file necessary SEC amendments (Form 8-K for the Company, Schedule 13D Amendment for Star Equity Fund) by specified deadlines.

Key Dates

Recommendation

The agreement resolves a potential governance conflict and moves towards a more shareholder-friendly board structure. However, the long-term impact on financial performance is yet to be seen, and the company's operational execution remains a key factor. Therefore, a 'hold' recommendation is appropriate pending further developments.

Keywords

Cooperation Agreement, Board Declassification, Proxy Contest, Shareholder Nominations, Corporate Governance, Standstill Agreement, Activist Investor, Director Elections