SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
Getty Realty Corp.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Getty Realty Corp.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
[GETTY LOGO]
--------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2002
--------------------------------------------------------------------------------
To the Stockholders of
GETTY REALTY CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Getty
Realty Corp. will be held at 270 Park Avenue, 11th Floor, New York, New York, on
May 16, 2002 at 10:30 a.m., for the following purposes:
(1) To elect a Board of five directors to hold office for the ensuing year
or until the election and qualification of their respective successors.
(2) To ratify the appointment of PricewaterhouseCoopers L.L.P. as our
independent auditors for the fiscal year ending December 31, 2002.
(3) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The transfer books will not be closed, but only stockholders of record at
the close of business on March 21, 2002 are entitled to notice of and to vote at
this meeting or any adjournments thereof.
You are cordially invited to attend the meeting. Whether or not you expect
to attend, please promptly vote, sign, date and return the enclosed proxy
instruction card in the enclosed U.S. postage-paid envelope. This will ensure
that your shares are voted in accordance with your wishes and that a quorum will
be present. Even though you have returned your proxy card, you may withdraw your
proxy at any time prior to its use and vote in person at the meeting should you
so desire.
By Order of the Board of Directors,
/s/ Randi Young Filip
RANDI YOUNG FILIP
Vice President, General Counsel and
Corporate Secretary
Jericho, New York
April 5, 2002
--------------------------------------------------------------------------------
PLEASE NOTE--IF YOU DO NOT PLAN TO ATTEND THE MEETING, IT WOULD BE APPRECIATED
IF YOU WOULD PROMPTLY SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE.
GETTY REALTY CORP.
125 JERICHO TURNPIKE, SUITE 103, JERICHO, NEW YORK 11753
--------------------------------------------------------------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
--------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Getty Realty Corp.
(hereinafter called the "Company" or "Getty"), to be voted at the Annual Meeting
of Stockholders to be held at 270 Park Avenue, 11th Floor, New York, New York,
on May 16, 2002 at 10:30 a.m., and at any adjournments thereof, for the purpose
of electing a Board of Directors, ratifying the appointment of independent
auditors and transacting such other business as may properly come before the
meeting.
On the March 21, 2002 record date for securities entitled to vote at the
meeting, 21,429,235 shares of Getty Common Stock and 2,865,768 shares of Getty
Preferred Stock (described below) were outstanding. Each outstanding common
share is entitled to one vote and each outstanding preferred share is entitled
to 1.1312 votes. The common and preferred shares vote together as a single
class. In order to constitute a quorum at the meeting, there must be present or
voting by proxy, holders of common and preferred shares holding a majority of
the outstanding common shares (including common shares issuable upon conversion
of the Getty Preferred Stock). In conformity with Maryland law, shares
abstaining from voting or not voted on certain matters will not be treated as
votes cast with respect to those matters, and, therefore, will not affect the
outcome of any such matter.
This Proxy Statement and form of proxy will be sent to stockholders in an
initial mailing on or about April 5, 2002. We must receive stockholder proposals
that are intended to be presented at the 2003 annual meeting no earlier than
February 15, 2003 and no later than March 17, 2003 in accordance with our
by-laws. Stockholder proposals to be considered for inclusion in next year's
proxy statement must be received by December 6, 2002.
GENERAL
The Company was incorporated in Maryland on December 23, 1997 in order to
acquire Power Test Investors Limited Partnership ("PTI"), which occurred on
January 30, 1998 (the "Merger"). As a result of the Merger, each share of common
stock of Getty Realty Corp., a Delaware corporation formerly known as Getty
Petroleum Corp. ("Old Getty"), was converted into the right to receive one share
of common stock of the Company ("Getty Common Stock") and PTI unitholders
received shares of the Company's Series A Participating Convertible Redeemable
Preferred Stock ("Getty Preferred Stock"). When we refer to the Company prior to
January 30, 1998, we mean Old Getty.
In December 2000, we changed our fiscal year from a January 31 to a
December 31 year end. Information for the fiscal year ended December 31, 2000 is
for the eleven month period from February 1 to December 31, 2000.
1
ELECTION OF DIRECTORS
Five directors are to be elected at the meeting for a term of one year or
until their respective successors are elected and qualified. Election of the
directors requires the plurality vote of the holders of a majority of the shares
present in person or represented by proxy at the meeting.
You may use the enclosed proxy to cast your votes for the election of the
nominees named in the table below. In the event that any of the nominees should
become unable or unwilling to serve as a director, we intend to vote your proxy
for the election of the person, if any, that is designated by the Board of
Directors. The persons nominated for election as directors are as follows:
NAME--AGE OFFICES HELD IN GETTY AND/OR
SERVED AS DIRECTOR SINCE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
-----------------------------------------------------------------------------------------------
Milton Cooper--73 Chairman of the Board of Kimco Realty Corporation, a real
May 1971 estate investment trust, for more than five years. Director,
Secretary and Assistant Treasurer of CLS General Partnership
Corp., Director of Blue Ridge Real Estate/Big Boulder
Corporation, a real estate management and land development
firm, and a Trustee of MassMutual Corporate Investors and
MassMutual Participation Investors.
Philip E. Coviello--59 Partner of Latham & Watkins, an international law firm, for
June 1996 more than five years. Latham & Watkins has performed legal
services for the Company for many years.
Leo Liebowitz--74 President and Chief Executive Officer of Getty. Served as
May 1971 Chairman, Chief Executive Officer and Director of Getty
Petroleum Marketing Inc. ("Marketing") until December 11,
2000. Director, President and Treasurer of CLS General
Partnership Corp. He is also a director of the Regional
Banking Advisory Board of J. P. Morgan Chase & Co.
Howard Safenowitz--43 Senior Vice President, Business Affairs of Buena Vista
December 1998 Motion Pictures and prior thereto Vice President, Business
Affairs of Walt Disney Pictures and Television for more than
five years. Served as Director of Marketing from December
1998 until December 11, 2000.
Warren G. Wintrub--68 Retired Partner, former member of the Executive Committee
June 1993 and former Chairman of the Retirement Committee of Coopers &
Lybrand, an international professional services
organization, for more than five years prior to his
retirement in January 1992. Director of Chromcraft
Revington, Inc., Corporate Property Associates 10 Inc.,
Corporate Property Associates 14 Inc. and Corporate Property
Associates 15 Inc.
2
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
The following table sets forth the beneficial ownership of Getty Common
Stock and Getty Preferred Stock based on beneficial ownership as of February 15,
2002, of (i) each person who is a beneficial owner of more than 5% of the
outstanding shares of Getty Common Stock or Getty Preferred Stock, (ii) each
director, (iii) the Named Executive Officers (as defined below), and (iv) all
directors and executive officers as a group. The number of shares column
includes shares as to which voting power and/or investment power may be acquired
within 60 days (such as upon exercise of outstanding stock options) because such
shares are deemed to be beneficially owned under the rules of the Securities and
Exchange Commission.
SHARES OF APPROXIMATE SHARES OF APPROXIMATE
COMMON STOCK PERCENT OF CLASS(1) PREFERRED STOCK PERCENT OF CLASS(1)
BENEFICIALLY OWNED COMMON STOCK BENEFICIALLY OWNED PREFERRED STOCK
---------------------------------------------------------------------------------------------------------------------
Milton Cooper 1,073,357(2) 5.0% 219,711(3) 7.7%
Director
c/o Kimco Realty Corporation
3333 New Hyde Park Road
New York, NY 11042
Philip E. Coviello 54,734(4) * -- --
Director
Leo Liebowitz 2,358,676(5) 11.0% 555,331(6) 19.4%
Director, President and Chief
Executive Officer
c/o Getty Realty Corp.
125 Jericho Turnpike
Suite 103
Jericho, NY 11753
Howard Safenowitz 2,278,351(7) 10.6% 369,726(8) 12.9%
Director
c/o Getty Realty Corp.
125 Jericho Turnpike
Suite 103
Jericho, NY 11753
Warren Wintrub 66,749(4) * -- --
Director
Randi Young Filip 5,170 * -- --
Vice President, General Counsel
and Corporate Secretary
Kevin C. Shea 13,369(4) * -- --
Vice President
Thomas Stirnweis 1,628 * -- --
Corporate Controller and
Treasurer
Directors and Executive Officers 5,998,322 28.0% 1,144,768 39.9%
as a group (8 persons)
Wellington Management Company, 1,146,000(9) 5.3% -- --
LLP
75 State Street
Boston, MA 02109
3
SHARES OF APPROXIMATE SHARES OF APPROXIMATE
COMMON STOCK PERCENT OF CLASS(1) PREFERRED STOCK PERCENT OF CLASS(1)
BENEFICIALLY OWNED COMMON STOCK BENEFICIALLY OWNED PREFERRED STOCK
---------------------------------------------------------------------------------------------------------------------
Safenowitz Partners, LP 1,510,801(10) 7.1% 289,156(10) 10.1%
c/o Howard Safenowitz
President of Safenowitz Family
Corp., general partner
c/o Getty Realty Corp.
125 Jericho Turnpike
Jericho, NY 11753
CLS General Partnership Corp. -- -- 665,760(11) 23.2%
c/o Leo Liebowitz, President
125 Jericho Turnpike
Jericho, NY 11753
-------------------------
* Total shares beneficially owned constitute less than one percent of the
outstanding shares.
(1) The percentage is determined by dividing the number of shares shown by the
aggregate number of shares outstanding and the shares which may be acquired
within 60 days.
(2) Includes 10,311 shares held in a partnership of which Mr. Cooper is a
partner, 2,013 shares held by his wife as to which he disclaims beneficial
ownership, 2,421 shares held in a qualified pension plan for the benefit of
Mr. Cooper, 169,000 shares held by a charitable foundation and 18,781
shares held in Getty's Retirement (401(k)) and Profit Sharing Plan.
(3) Includes 4,321 shares held by a retirement fund of which Mr. Cooper is a
beneficiary, 17,820 shares held by a charitable foundation of which he is
the president and 118,505 shares held by CLS General Partnership Corp.
Excludes 56,157 shares held by Mr. Cooper's wife and 14,720 shares held by
his children and grandchildren, as to which he disclaims beneficial
ownership.
(4) Includes with respect to Messrs. Coviello, Wintrub and Shea, options
covering 35,078, 41,365 and 9,402 shares, respectively, that are presently
exercisable or will become exercisable within 60 days.
(5) Includes 218,437 shares held by Mr. Liebowitz' wife as to which he
disclaims beneficial ownership, 40,724 shares held by a charitable
foundation and 44,205 shares held in Getty's Retirement (401(k)) and Profit
Sharing Plan.
(6) Includes 75,306 shares held by Mr. Liebowitz' wife and 274,892 shares held
by CLS General Partnership Corp. Excludes 225,515 shares held by his
children, as to which he disclaims beneficial ownership.
(7) Includes 23,479 shares held as custodian for three minor children, 98,238
shares held by The Marilyn Safenowitz Irrevocable Trust u/a/d 12/13/94 (of
which Mr. Safenowitz is a co-trustee and as to which he has no beneficial
interest), 515,000 shares held by The Safenowitz Family Partnership, LP and
1,510,801 shares held by Safenowitz Partners, LP (as to which in each case
he is the president of the general partner and as to which he disclaims
beneficial ownership except to the extent of his pecuniary interest
therein), and 11,523 shares held by Mr. Safenowitz' wife as to which he
disclaims beneficial ownership. Also includes options covering 3,750 shares
that are presently exercisable or will become exercisable within 60 days.
(8) Includes 289,156 shares held by Safenowitz Partners, LP, of which Mr.
Safenowitz is the president of the general partner and as to which he
disclaims beneficial ownership except to the extent of his pecuniary
interest therein, 26,136 shares held by The Marilyn Safenowitz Irrevocable
Trust u/a/d 12/13/94, of which he is a co-trustee and as to which he has no
beneficial interest, and 11,000 shares held by The Marilyn Safenowitz
Irrevocable Trust u/a/d 4/13/00, of which he is trustee and as to which he
has no beneficial interest.
(9) On February 19, 2002, we received a Schedule 13G dated February 14, 2002,
that was filed with the SEC in respect of ownership of an aggregate of
1,146,000 shares of Getty Common Stock by Wellington Management Company,
LLP. We have not attempted to verify independently any of the information
contained in the Schedule 13G.
4
(10) Safenowitz Partners, LP is separate and distinct from The Safenowitz Family
Partnership, LP referred to in Note 7 above. These shares are also included
in the total number of shares attributable to Howard Safenowitz as set
forth in the table above and further described in Notes 7 and 8.
(11) The shareholders of CLS General Partnership Corp. are Leo Liebowitz
(41.29%), Milton Cooper (17.80%) and Marilyn Safenowitz, Trustee of the
Non-Exempt Marital Trust created under the Milton Safenowitz Revocable
Trust u/a/d 2/6/97 (40.91%).
DIRECTORS' MEETINGS, COMMITTEES AND EXECUTIVE OFFICERS
During the fiscal year ended December 31, 2001, the Board of Directors held
four regular meetings and two telephonic special meetings. Each director
attended all of the meetings of the Board of Directors and of the Committees of
the Board on which the director served.
The Board of Directors has an Audit Committee, a Nominating Committee and a
Compensation and Stock Option Committee, the membership and functions of which
are described below.
The Audit Committee, consisting of Messrs. Coviello (Chairman), Cooper and
Wintrub, met once last year. The Committee selects the firm of independent
public accountants which audits the consolidated financial statements of Getty
and its subsidiaries, discusses the scope and the results of the audit with the
accountants and discusses Getty's financial accounting and reporting principles.
The Committee also examines the summary reports of Getty's internal auditors and
discusses the adequacy of Getty's financial controls with the accountants and
with management.
The Nominating Committee, consisting of Messrs. Liebowitz (Chairman),
Cooper, Coviello and Safenowitz, met one time last year. The Committee
recommends candidates to the Board for election as officers. The Committee
recommends nominees for election to the Board and reviews the role, composition
and structure of the Board and its committees. The Committee will consider
nominees recommended by shareholders upon submission in writing to the
Secretary, in accordance with the provisions of our Bylaws, together with the
nominee's qualifications for service as a director.
The Compensation and Stock Option Committee (the "Compensation Committee"),
which met three times last year, consists of Messrs. Wintrub (Chairman), Cooper,
Liebowitz and Safenowitz. Mr. Cooper had served as Chairman until March 2001, at
which time Mr. Wintrub became Chairman. The Compensation Committee administers
Getty's bonus plan, Supplemental Retirement Plan and 1998 Stock Option Plan, and
reviews the compensation of the directors and officers of Getty.
DIRECTORS' COMPENSATION
Directors receive annual retainer fees of $12,000, and committee and board
meeting fees of $1,000 for each meeting attended, except for telephonic meetings
for which the fee is $500. The Chairman of the Audit Committee receives $1,500
for each committee meeting, except that he receives $750 for each telephonic
meeting. Directors who are employees of Getty do not receive retainers or board
meeting fees. Messrs. Coviello, Safenowitz and Wintrub have received options
under Getty's stock option plan.
OTHER EXECUTIVE OFFICERS
Other than Mr. Liebowitz, the executive officers during fiscal 2001 were
Randi Young Filip, age 41, Vice President and General Counsel of Getty since
2001 and Corporate Secretary of Getty since 1997, Kevin C. Shea, age 42, Vice
President of Getty since 2001 and Thomas Stirnweis, age 43, Corporate Controller
and Treasurer of Getty since 2001. Management is not aware of any family
relationships between any of its directors or executive officers.
5
COMPENSATION
EXECUTIVE COMPENSATION
The following tables provide information about executive compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of the
Chief Executive Officer and each of the other Executive Officers of Getty (the
"Named Executive Officers") for services in all capacities to Getty and its
subsidiaries during the periods indicated.
LONG TERM COMPENSATION
ANNUAL COMPENSATION RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION FISCAL YEAR ENDED ($) ($) ($)(1) ($) (#) ($)(2)
--------------------------------------------------------------------------------------------------------------------
Leo Liebowitz December 31, 2001 331,100 75,000 110,351
Director, President December 31, 2000(3) 305,631 -- 36,338
and Chief January 31, 2000 322,755 -- 45,630
Executive Officer
Randi Young Filip December 31, 2001 124,273 45,000 10,000 18,289
Vice President, December 31, 2000(3) 95,377 40,000 10,000 6,376
General Counsel and January 31, 2000 100,400 20,000 5,000 6,268
Corporate Secretary
Kevin C. Shea December 31, 2001 113,149 60,000 10,000 17,224
Vice President December 31, 2000(3) 95,204 40,000 10,000 6,702
January 31, 2000 100,461 37,000 4,000 6,399
Thomas Stirnweis December 31, 2001(4) 120,673 50,000 10,000 16,618
Corporate Controller
and Treasurer
-------------------------
(1) None of the Named Executive Officers received perquisites or other personal
benefits that exceeded the lesser of $50,000 or 10% of the officer's salary
and bonus.
(2) All other compensation includes Company contributions to the defined
contribution retirement profit sharing plan, matching contributions under
Getty's 401(k) savings plan, Getty contributions to the Supplemental
Retirement Plan for executives and life insurance premiums as set forth in
the following table.
DEFINED COMPANY SUPPLEMENTAL
CONTRIBUTION MATCH RETIREMENT LIFE
FISCAL YEAR ENDED RETIREMENT PLAN 401(K) PLAN PLAN INSURANCE(5)
------------------------------------------------------------------------------------------------------
Leo Liebowitz December 31, 2001 $2,596 $ -- $30,514 $77,241(6)
December 31, 2000(3) 2,638 -- 31,500 2,200
January 31, 2000 2,474 -- 40,721 2,435
Randi Young Filip December 31, 2001 2,544 3,728 10,154 1,863
December 31, 2000(3) 1,703 3,094 7,528 1,579
January 31, 2000 1,600 3,005 -- 1,663
Kevin C. Shea December 31, 2001 2,286 3,420 9,655 1,863
December 31, 2000(3) 2,038 3,087 8,875 1,577
January 31, 2000 1,744 2,991 -- 1,644
Thomas Stirnweis December 31, 2001(4) 1,752 3,620 9,176 2,070
(3) Due to a change in our fiscal year end, the Fiscal Year Ended December 31,
2000 is an eleven month period. The prior fiscal year is a twelve month
period ending January 31, 2000.
(4) Mr. Stirnweis became an employee of the Company on January 1, 2001.
(5) All life insurance policy premiums relate to term life insurance policies
unless otherwise noted.
(6) Includes a $75,626 fixed annual premium for a 10-year universal life
insurance policy owned by Mr. Liebowitz.
6
OTHER EXECUTIVE COMPENSATION
In December 1994, we entered into agreements (collectively, the "Change of
Control Agreements") with non-director officers and certain key employees, in
which Getty agreed to make payments under certain circumstances upon a "change
of control" of Getty, and also agreed that all Getty stock options granted to
such officer or key employee would immediately vest. In March 1996, we amended
the Change of Control Agreements to treat a spinoff or similar transaction
involving a substantial portion of Getty's marketing or real estate business or
assets as a "change of control". Accordingly, a "change of control" for purposes
of the Change of Control Agreements occurred on March 21, 1997, when Marketing
was spun off to Getty shareholders. On April 8, 1997, we formally confirmed to
each covered employee our obligations under the Change of Control Agreements
including a minimum guaranteed annual compensation (the "Guaranteed Salary"). On
March 9, 1998, we further amended the Change of Control Agreements to provide
that in the event of the termination of an officer or covered employee by Getty
for other than cause, or by either party following the assignment to such
officer or covered employee of materially less favorable job responsibilities or
duties, for the 24-month period after the date of termination for officers and a
12-month period after the date of termination for the covered employees, Getty
will make payments to each such individual over the applicable period at an
annual rate of not less than the Guaranteed Salary, reduced by the amount of
compensation, if any, the officer or key employee receives from any other
employer during the covered period. In addition, Getty will continue to pay at
least the Guaranteed Salary to each covered employee as long as he or she
remains a Getty employee. Ms. Young Filip and Mr. Stirnweis are currently
covered by these arrangements with a 12-month benefit period.
In connection with John Fitteron's retirement as Senior Vice President,
Treasurer and Chief Financial Officer in January 2001, Getty agreed to pay Mr.
Fitteron a lump sum payment and bonus for fiscal 2000 and the sum of $30,500 per
year for two years commencing February 1, 2001, in lieu of what was owed to him
under his Change of Control Agreement. Mr. Fitteron also will receive certain
related benefits through October 31, 2003.
STOCK OPTIONS
The following table sets forth as to the Named Executive Officers
additional information with respect to the stock options granted during the
fiscal year ended December 31, 2001, including the potential realizable value
from the stock options assuming they are exercised at the end of the option term
and assuming 5% and 10% annual rates of stock price appreciation during the
option term.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
NUMBER OF SHARES % OF TOTAL OPTIONS AT ASSUMED ANNUAL RATES
OF COMMON STOCK GRANTED TO OF STOCK PRICE
UNDERLYING EMPLOYEES IN EXERCISE OR APPRECIATION FOR
OPTIONS FISCAL YEAR ENDED BASE PRICE EXPIRATION OPTION TERM(1)
NAME GRANTED (#) 12-31-01 ($/SHARE) DATE 5% ($) 10% ($)
--------------------------------------------------------------------------------------------------------------------
Leo Liebowitz -- -- -- -- -- --
Randi Young Filip 10,000 14.4% 16.15 09/20/11 145,500 327,500
Kevin C. Shea 10,000 14.4% 16.15 09/20/11 145,500 327,500
Thomas Stirnweis 10,000 14.4% 16.15 09/20/11 145,500 327,500
-------------------------
(1) The dollar amounts under the potential realizable value column are the
result of calculations of assumed annual compound rates of appreciation over
the ten-year life of the options in accordance with the rules of the SEC and
are not intended to forecast possible future appreciation, if any, of the
Company's Common Stock. The actual value, if any, an executive may realize
will depend on the excess of the market price of the shares over the
exercise price on the date the option is exercised. The Company did not use
an alternative formula for a grant date valuation, as the Company is not
aware of any formula which will determine with reasonable accuracy a present
value based on unknown or volatile factors. If the price of
7
Getty Common Stock appreciates, the value of Getty Common Stock held by the
Company's stockholders will also increase. For example, the aggregate market
value of Getty Common Stock on December 31, 2001 was approximately
$403,811,000, based upon the market price on that date. If the share price
of Getty's Common Stock increases by 5% per year, the aggregate market value
on December 31, 2011 of the same number of shares would be approximately
$657,765,000. If the price of Getty's Common Stock increases by 10% per
year, the aggregate market value on December 31, 2011 would be approximately
$1,047,381,000.
The following table provides information as to options exercised by each of
the Named Executive Officers of Getty during the fiscal year ended December 31,
2001 and the value of options held by such officers at year end measured in
terms of the closing price of Getty Common Stock on December 31, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------
Leo Liebowitz -- -- -- --
Randi Young Filip 4,713 153,777 --/10,000 --/27,000
Kevin C. Shea 2,000 16,010 9,402/19,500 2,396/75,075
Thomas Stirnweis 1,618 69,500 --/10,000 --/27,000
STOCK OPTION PLAN
Our 1998 Stock Option Plan, as amended (the "Stock Option Plan"), which has
been approved by our stockholders, authorizes the grant to directors, officers
and other key employees of Getty and its subsidiaries of long-term incentive
share awards in the form of options ("Options") to purchase shares of Getty
Common Stock. The Stock Option Plan is administered by a committee of four
members of the Board of Directors (the "Compensation Committee"). The maximum
number of shares which may be the subject of outstanding Options under the 1998
Stock Option Plan is 1,100,000, subject to adjustments for stock dividends and
stock splits. As of December 31, 2001, 318,349 shares of Getty Common Stock were
issuable upon the exercise of options outstanding under the Stock Option Plan.
No grants may be made under the Stock Option Plan after January 30, 2008. The
number of remaining shares available for grant under the Stock Option Plan was
715,084 at March 15, 2002.
The recipients, terms (including price and exercise period) and type of
Option to be granted under the Stock Option Plan are determined by the
Compensation Committee; however, the Option price per share under the Stock
Option Plan generally must be at least equal to the fair market value of a share
of Getty Common Stock (110% of the amount in the case of Incentive Stock Options
granted to any individual who owns stock representing more than 10% of the
voting power of Getty Common Stock) on the date the Option is granted. Subject
to certain limitations, Options granted under the Stock Option Plan may be
either Incentive Stock Options (within the meaning of Section 422(b) of the
Internal Revenue Code) or Non-Qualified Stock Options. With certain limited
exceptions, Options may not be exercised for a period of twelve months following
the grant of the Option and are exercisable in installments as are specified in
the Stock Option Plan or the terms of each Option. The exercise period of an
Option may not extend more than 10 years following its grant.
RETIREMENT PLANS
Getty has a retirement profit-sharing plan with Deferred 401(k) Savings
Plan Provisions (the "Retirement Plan") for employees meeting certain service
requirements. Under the terms of the Retirement Plan, the
8
annual discretionary contribution portion of the Retirement Plan is determined
by the Board of Directors. For the 401(k) portion of the Retirement Plan, the
Board of Directors has elected to contribute to the Retirement Plan for each
participating employee an amount equal to 50% of the employee's contribution to
the Retirement Plan but in no event more than 3% of the employee's compensation.
Getty also has a Supplemental Retirement Plan for Executives (the
"Supplemental Plan"). Under the Supplemental Plan, which is not qualified for
purposes of Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), a participating executive may receive in his trust account an amount
equal to 10% of his compensation, reduced by the amount of any contributions
allocated to the executive under the Retirement Plan. The amounts paid to the
trustee under the Supplemental Plan may be used to satisfy claims of general
creditors in the event of Getty's or any of its subsidiaries' bankruptcy. The
trustee may not cause the Supplemental Plan to be other than "unfunded" for
purposes of the Employee Retirement Income Security Act of 1974, as amended. An
executive's account vests in the same manner as under the Retirement Plan and is
paid upon termination of employment. Under the Supplemental Plan, the Board of
Directors may during any fiscal year elect not to make any payment to the
account of any or all executives.
Pursuant to a long-standing arrangement, in the event of the death of Mr.
Liebowitz, benefits in an amount equal to twelve months' salary will be paid to
his estate. In the event of termination of Mr. Liebowitz' employment due to
illness or incapacity for a period of one year or longer, benefits equal to
twenty-four months salary will be payable to Mr. Liebowitz.
Mr. Liebowitz receives an annual pension of $3,500 from a subsidiary's
defined benefit retirement plan which was terminated effective October 1, 1985.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Cooper, Liebowitz,
Safenowitz and Wintrub. Mr. Liebowitz is President and Chief Executive Officer.
Mr. Cooper was a vice president of Getty until June 1992.
9
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
To Our Stockholders:
This report addresses our compensation policies with respect to the
compensation of the Chief Executive Officer and the other executive officers
during fiscal 2001. The Compensation and Stock Option Committee of the Board of
Directors (the "Compensation Committee") is responsible for setting the policies
which govern base salary compensation, bonuses, the Retirement Plan, the
Supplemental Retirement Plan, and the Stock Option Plan, and for determining
amounts payable under these plans.
Compensation of Getty's executive officers (with the exception of the Chief
Executive Officer) is recommended by the Chief Executive Officer to the
Compensation Committee and is discussed, reviewed and approved by the full Board
of Directors. The compensation of the Chief Executive Officer is also discussed,
reviewed and approved by the full Board of Directors.
EXECUTIVE OFFICER COMPENSATION
Getty's compensation program for executive officers is designed to provide
each officer with a total compensation package competitive with amounts paid for
similar positions in similar companies. With its objective being to attract and
retain capable people, Getty endeavors to ensure that each officer's
compensation is based on his or her ability, effort and achievement. In addition
to the base salary program, Getty has a discretionary bonus plan that is
administered by the Compensation Committee in light of Getty's focus on managing
its portfolio of gasoline service stations, terminals and related properties
while minimizing expenses. Executive Officers' base salaries increased modestly
at the end of the fiscal year.
Mr. Liebowitz' bonus for fiscal 2001 was based on the Committee's
evaluation of his overall performance during the year, including his efforts in
connection with Getty's common stock public offering, substantial distributions
to shareholders (including the one-time special "earnings and profits"
distribution in August 2001) and the Company's election to be treated as a real
estate investment trust, as well as the significant increase in the Company's
stock price during fiscal 2001.
STOCK OPTIONS
Stock options are granted to encourage and facilitate personal stock
ownership by the directors, executives and certain other key employees and thus
strengthen their personal commitment to Getty and provide a longer term
perspective to their managerial responsibilities. The stock option portion of
the compensation program directly links the executive's interests with those of
the stockholders. The Compensation Committee's policy is to grant stock option
awards based on individual performance and the potential to contribute to the
future success of Getty. In September 2001, stock options were awarded to
certain key employees and directors. No options were granted to Mr. Liebowitz,
who has not, to date, participated in the Stock Option Plan.
The Compensation Committee believes that the three components described
above provide compensation that is competitive with that offered by other
corporations, and effectively links executive and stockholder interests through
varied plans that are structured to coincide with the long term vision of Getty.
Section 162(m) of the Code denies the federal income tax deduction by
publicly held corporations of compensation in excess of $1 million paid to
certain executives and highly compensated officers during a fiscal year. It is
our policy to take this rule into account in setting the compensation of its
affected executives. In addition to salaries and bonuses, compensation income
recognized upon the exercise of stock options may represent compensation subject
to the Section 162(m) limitation. Although it is possible that in any given
year, some portion of the compensation paid to an executive will not be tax
deductible under Section 162(m), the Compensation Committee believes that
portions of the affected executive's total compensation that are performance
based are excepted from application of Section 162(m). Deductibility will also
depend upon the amount of any bonus paid, upon the market price of the shares on
the date stock options are exercised, and the number of options exercised by an
executive in any fiscal year.
10
The report of the Compensation Committee should not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that Getty specifically incorporates this information by
reference, and should not otherwise be deemed filed under such Acts.
Compensation and Stock Option
Committee:
Warren Wintrub (Chairman)
Milton Cooper
Leo Liebowitz
Howard Safenowitz
11
REPORT OF THE AUDIT COMMITTEE
To Our Stockholders:
This report addresses Getty's compliance with SEC and the New York Stock
Exchange rules designed to enhance audit committee effectiveness, to improve
public disclosure about the functioning of corporate audit committees and to
enhance the reliability and credibility of financial statements of public
companies.
INDEPENDENCE
The Board of Directors has determined that each of the Audit Committee
members are "independent" as such term is defined in the NYSE Rules.
AUDIT COMMITTEE CHARTER
At the Audit Committee Meeting held on March 23, 2000, the Audit Committee
adopted a written Charter, which was approved by Getty's Board of Directors and
attached to the Company's proxy statement dated May 1, 2000.
FINANCIAL STATEMENTS
With regard to our audited financial statements, the Audit Committee has:
(1) reviewed and discussed the audited financial statements with management
and with PricewaterhouseCoopers L.L.P.;
(2) discussed with PricewaterhouseCoopers L.L.P., our independent auditors,
the matters required by SAS 61, as may be modified or supplemented;
(3) (a) received the written disclosures and the letter from
PricewaterhouseCoopers L.L.P. required by Independence Standards Board Standard
No. 1 (Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees), as modified or supplemented, (b) discussed with
PricewaterhouseCoopers L.L.P. their independence, and (c) concluded that the
provision of those services other than audit services by PricewaterhouseCoopers
L.L.P. is compatible with maintaining their independence; and
(4) based upon the review and discussions set forth in paragraphs (1)
through (3) above, recommended to Getty's Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001.
The Audit Committee Chairman and one or more of the other Audit Committee
members, prior to filing with the SEC each of the Company's quarterly reports on
Form 10-Q for the quarters ended March 31, June 30 and September 30, 2001,
reviewed with the Company's management and PricewaterhouseCoopers L.L.P. the
Company's interim financial results to be included in such report, and the
matters required to be discussed by SAS 61.
The report of the Audit Committee should not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that Getty specifically incorporates this information by
reference, and should not otherwise be deemed filed under such Acts.
Audit Committee:
Philip Coviello (Chairman)
Milton Cooper
Warren Wintrub
12
STOCK PERFORMANCE GRAPH
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
GETTY (GTY), S&P 500, AND PEER GROUP
(Performance results through 12/31/01)
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on Getty Common Stock against the
cumulative total return of the Standard & Poor's 500 Stock Index and the Peer
Group for the period of five years ended December 31, 2001.
[PERFORMANCE GRAPH]
-----------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
-----------------------------------------------------------------------------------------------------------
Getty Realty Corp. $100.00 176.36 119.40 94.25 132.14 219.22
-----------------------------------------------------------------------------------------------------------
Standard & Poor's 500 $100.00 133.24 171.07 205.77 184.90 160.79
-----------------------------------------------------------------------------------------------------------
Peer Group $100.00 120.08 116.23 95.66 110.54 150.62
-----------------------------------------------------------------------------------------------------------
Assumes $100 invested at the close of trading on 12/31/96 in Getty Common Stock,
Standard & Poor's 500, and Peer Group.
*Cumulative total return assumes reinvestment of dividends, and in the case of
Getty includes (i) a special dividend relating to the Marketing spin-off and
(ii) the special one-time earnings and profits distribution made in August
2001.
Getty has chosen as its Peer Group the following companies: Commercial Net
Lease Realty, Inc., U.S. Restaurant Properties, Inc., Realty Income Corp. and
FFP Partners, LP. We have chosen these companies as our Peer Group because a
substantial segment of each of their businesses is as a real estate company that
owns and leases commercial properties. For 2001, we have included Commercial Net
Lease Realty, Inc. in lieu of Franchise Finance Corp. of America, in our Peer
Group since FFCA was acquired by General Electric Capital Corporation during
2001.
The Stock Performance Graph should not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act or under the Exchange Act, except to the
extent that Getty specifically incorporates this graph by reference, and should
not otherwise be deemed filed under such Acts.
We cannot assure you that Getty stock performance will continue in the
future with the same or similar trends depicted in the graph above. We do not
make or endorse any predictions as to future stock performance.
13
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Pursuant to the direction of the Board of Directors, on February 28, 2002,
the Audit Committee recommended the appointment of the firm of
PricewaterhouseCoopers L.L.P., subject to ratification by the stockholders at
the Annual Meeting, to audit the accounts of Getty with respect to our
operations for the fiscal year ending December 31, 2002 and to perform other
services as may be required. Should this firm of auditors be unable to perform
these services for any reason, the Board of Directors will appoint other
independent auditors to perform these services. A majority of votes cast at the
meeting is necessary in order to ratify the appointment of the independent
auditors.
The fees paid to PricewaterhouseCoopers L.L.P., our principal auditors,
during fiscal 2001 were as follows:
Audit Fees(1) $ 94,000
Financial Information Systems Design and Implementation Fees None
All Other Fees(2) $208,500
-----------------------------------
(1) Includes the aggregate fees billed for professional services
rendered by PricewaterhouseCoopers L.L.P. for the audit of the
Company's annual financial statements for fiscal 2001 and the
reviews of the financial statements included in the Company's
Quarterly Reports on Form 10-Q for fiscal 2001.
(2) Includes the aggregate fees billed for all services rendered by
PricewaterhouseCoopers L.L.P., other than fees for the services
which must be reported under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees", during fiscal
2001, including fees for a common stock offering prospectus
supplement and the audit of the Company's Profit Sharing Plan.
Representatives of the firm of PricewaterhouseCoopers L.L.P. are expected
to be present at the Annual Meeting, will have the opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions from stockholders.
The Board of Directors recommends a vote "FOR" the proposal to ratify the
selection of PricewaterhouseCoopers L.L.P. as Getty's independent public
auditors for the fiscal year ending December 31, 2002.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Exchange Act and the rules issued
thereunder, Getty's executive officers and directors are required to file with
the SEC and the New York Stock Exchange reports of ownership and changes in
ownership of Getty equity securities. Copies of these reports are required to be
furnished to us. Based on our review of Forms 3 and 4 we received during fiscal
2001 and of Forms 5 we received with respect to fiscal 2001, Getty believes that
during fiscal 2001 all of our executive officers and directors complied with the
Section 16(a) requirements.
OTHER MATTERS
Management does not know of any matters, other than those referred to
above, to be presented at the meeting for action by the stockholders. However,
if any other matters are properly brought before the meeting, or any adjournment
or adjournments thereof, we intend to cast votes pursuant to the proxies with
respect to such matters in accordance with the best judgment of the persons
acting under the proxies.
The proxy may be revoked at any time prior to its exercise. Brokerage
houses and other custodians will be requested to forward solicitation material
to beneficial owners of stock that they hold of record. We will reimburse
brokerage houses, banks and custodians for their out-of-pocket expenses in
forwarding proxy material to the beneficial owners. The cost of this
solicitation, which will be effected by mail, will be borne by us.
April 5, 2002 By Order of the Board of Directors,
/s/ Randi Young Filip
Randi Young Filip
Vice President, General Counsel and
Corporate Secretary
14
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE GETTY REALTY CORP. WITH- FOR ALL
FOR HOLD EXCEPT
ANNUAL MEETING OF STOCKHOLDERS 1. ELECTION OF DIRECTORS. [ ] [ ] [ ]
MAY 16, 2002 C FOR all nominees listed (except
O as marked to the contrary below)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS M
The undersigned stockholder of Getty Realty Corp. hereby M NOMINEES: M. COOPER, P. COVIELLO,
constitutes and appoints LEO LIEBOWITZ and THOMAS STIRNWEIS, and O L. LIEBOWITZ, H. SAFENOWITZ,
each of them, the true and lawful attorneys, agents and proxies N W. WINTRUB
of the undersigned, each with full power of substitution, to vote
at the meeting, (or if only one shall be present and acting at the INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
meeting then that one,) all of the common shares of stock of the INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE
corporation that the undersigned would be entitled, if personally THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
present, to vote at the annual meeting of stockholders of the
corporation to be held at 270 Park Avenue, 11th Floor, New York, ---------------------------------------------------------
New York, on May 16, 2002, and at any adjournments thereof.
FOR AGAINST ABSTAIN
2. The ratification of the [ ] [ ] [ ]
appointment of
PricewaterhouseCoopers L.L.P.
as independent auditors for the
Company for the fiscal year ended
December 31, 2002.
3. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
Receipt is acknowledged of notice and proxy statement
for the foregoing meeting and of annual report to
stockholders for the fiscal year ended December 31, 2001.
------------------------------ THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
Please be sure to sign and date Date MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF
this Proxy in the box below. NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
------------------------------------------------------------------ ITEMS 1 AND 2.
----Stockholder sign above-------Co-holder (if any) sign above----
------------------------------------------------------------------------------------------------------------------------------------
* DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. *
GETTY REALTY CORP.
125 JERICHO TPKE., SUITE 103, JERICHO, NY 11753
------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name appears hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other duly authorized officer. If a partnership, please sign in partnership name by authorized
officer.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE GETTY REALTY CORP. WITH- FOR ALL
FOR HOLD EXCEPT
ANNUAL MEETING OF STOCKHOLDERS 1. ELECTION OF DIRECTORS. [ ] [ ] [ ]
MAY 16, 2002 P FOR all nominees listed (except
R as marked to the contrary below)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS E
The undersigned stockholder of Getty Realty Corp. hereby F NOMINEES: M. COOPER, P. COVIELLO,
constitutes and appoints LEO LIEBOWITZ and THOMAS STIRNWEIS, and E L. LIEBOWITZ, H. SAFENOWITZ,
each of them, the true and lawful attorneys, agents and proxies R W. WINTRUB
of the undersigned, each with full power of substitution, to vote R
at the meeting, (or if only one shall be present and acting at the E INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
meeting then that one,) all of the preferred shares of stock of D INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE
the corporation that the undersigned would be entitled, if THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
personally present, to vote at the annual meeting of stockholders
of the corporation to be held at 270 Park Avenue, 11th Floor,
New York, New York, on May 16, 2002, and at any adjournments ---------------------------------------------------------
thereof.
FOR AGAINST ABSTAIN
2. The ratification of the [ ] [ ] [ ]
appointment of
PricewaterhouseCoopers L.L.P.
as independent auditors for the
Company for the fiscal year ended
December 31, 2002.
3. In their discretion, the Proxies are authorized to
vote upon such other business as may properly
come before the meeting.
Receipt is acknowledged of notice and proxy statement
for the foregoing meeting and of annual report to
stockholders for the fiscal year ended December 31, 2001.
------------------------------ THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
Please be sure to sign and date Date MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF
this Proxy in the box below. NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
------------------------------------------------------------------ ITEMS 1 AND 2.
----Stockholder sign above-------Co-holder (if any) sign above----
------------------------------------------------------------------------------------------------------------------------------------
* DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. *
GETTY REALTY CORP.
125 JERICHO TPKE., SUITE 103, JERICHO, NY 11753
------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as your name appears hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other duly authorized officer. If a partnership, please sign in partnership name by authorized
officer.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------