<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
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 Rule 14a-11(c) or Rule 14a-12
GETTY PETROLEUM MARKETING INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
<PAGE> 2
GETTY LOGO
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 17, 1999
- --------------------------------------------------------------------------------
To the Stockholders of
GETTY PETROLEUM MARKETING INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Getty
Petroleum Marketing Inc. (hereinafter called the "Company") will be held at 270
Park Avenue, 11th Floor, Conference Room "C," New York, New York, on June 17,
1999 at 10:30 a.m., for the following purposes:
(1) To elect a Board of six 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
independent auditors for the Company for the fiscal year ended January
31, 2000.
(3) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The transfer books of the Company will not be closed, but only stockholders
of record at the close of business on April 22, 1999 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,
SAMUEL M. JONES
SAMUEL M. JONES
Vice President, General Counsel
and Corporate Secretary
Jericho, New York
April 30, 1999
- --------------------------------------------------------------------------------
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.
<PAGE> 3
GETTY PETROLEUM MARKETING INC.
125 JERICHO TURNPIKE, 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 Petroleum Marketing
Inc. (hereinafter called the "Company"), to be voted at the Annual Meeting of
Stockholders to be held at 270 Park Avenue, 11th Floor, New York, New York, on
June 17, 1999 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
for the Company, and transacting such other business as may properly come before
the meeting.
On the April 22, 1999 record date for securities entitled to vote at the
meeting, the Company had outstanding 13,945,526 shares of Common Stock. Each
outstanding common share is entitled to one vote. The presence in person or by
proxy of a majority of the outstanding common shares is required to constitute a
quorum. 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 30, 1999. The Company must receive stockholder
proposals that are intended to be presented at the next annual meeting no
earlier than March 20, 2000 and no later than April 19, 2000 in accordance with
the Company's by-laws. Stockholder proposals to be considered for inclusion in
next year's proxy statement must be received by the Company by December 31,
1999.
ELECTION OF DIRECTORS
On April 19, 1999, the Board of Directors voted to increase the size of the
Board from five to six directors. Accordingly, six directors are to be elected
at the meeting for a term of one year or until their respective successors are
elected and qualified. A plurality vote of the shares having voting power
present in person or represented by proxy at the meeting is necessary for the
election of the directors.
We intend that you use the enclosed proxy to cast your votes for the
election of the nominees named in the table set forth below. In the event that
any of the nominees should become unable or unwilling to serve as a director, we
intend that your proxy will be voted for the election of the person, if any,
that is designated by the Board of Directors. The names of, and certain
information with respect to, the persons nominated for election as directors are
as follows:
<TABLE>
<CAPTION>
NAME--AGE OFFICES HELD IN THE COMPANY AND/OR
SERVED AS DIRECTOR SINCE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------
<S> <C>
Matthew J. Chanin--44 Senior Managing Director of Prudential Capital Group since
December 1996 December 1995. Prior thereto, Mr. Chanin held senior
investment positions with Prudential Insurance Company of
America for more than five years.
Ronald E. Hall--67 Director and former Chairman of the Board of Howell Corp.
December 1996 since 1996. Prior thereto, Mr. Hall was President and Chief
Executive Officer of CITGO Petroleum Corp. for more than
five years.
Leo Liebowitz--71 Chairman and Chief Executive Officer of the Company.
May 1971 President and Chief Executive Officer of Getty Realty Corp.
Richard E. Montag--67 Real Estate Investment Consultant. Formerly Vice President
December 1996 of Real Estate Development, The Richard E. Jacobs Group, for
more than five years until 1998.
Howard Safenowitz--40 Vice President, Business Affairs, Walt Disney Pictures and
December 1998 Television, and prior thereto an attorney for Walt Disney
Company for more than five years. Director of Getty Realty
Corp. since December 1998.
</TABLE>
1
<PAGE> 4
<TABLE>
<CAPTION>
NAME--AGE OFFICES HELD IN THE COMPANY AND/OR
SERVED AS DIRECTOR SINCE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------
<S> <C>
Howard Silverman--63* Co-Chairman, First Capital Ventures, since 1996. Formerly
Chairman, President and Chief Executive Officer of Gruntal &
Co., L.L.C. for more than five years until 1995.
</TABLE>
- -------------------------
* Mr. Silverman, who is a new nominee to the Board and is not presently a
director of the Company, served as a director of Getty Petroleum Corp. (the
predecessor of Getty Realty Corp.) from 1986 to 1993.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Under the rules of the Securities and Exchange Commission (the "SEC"), a
person who directly or indirectly has or shares voting power and/or investment
power with respect to a security is considered a beneficial owner of the
security. Voting power includes the power to vote or direct the voting of
shares, and investment power includes the power to dispose of or direct the
disposition of shares.
The following table sets forth the beneficial ownership of the Company's
Common Stock based on beneficial ownership as of January 31, 1999, of (i) each
person who is a beneficial owner of more than 5% of the outstanding shares of
the Company's Common Stock, (ii) each director or nominee for director of the
Company, (iii) the Named Executive Officers (as defined below), and (iv) all
directors, the nominee for director and executive officers as a group.
<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OF CLASS
NAME BENEFICIALLY OWNED (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Matthew J. Chanin 6,708 *
Director
Ronald E. Hall 16,337 *
Director
Leo Liebowitz 2,392,902(2) 17.16%
Director, Chairman and
Chief Executive Officer
c/o Getty Petroleum Marketing Inc.
125 Jericho Turnpike
Jericho, New York 11753
Richard E. Montag 36,986(3) *
Director
Howard Safenowitz 2,361,281(4) 16.93%
Director
21767 Los Alimos Street
Chatsworth, CA 91311
Howard Silverman 27,000 *
Nominee for Director
Vincent J. DeLaurentis 25,688(5) *
President and
Chief Operating Officer
A.R. Charnes 20,896(6) *
Vice President of Marketing
Samuel M. Jones 87,472(7)(9) *
Vice President, General Counsel
and Secretary
Michael K. Hantman 82,631(8)(9) *
Vice President and Corporate Controller
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OF CLASS
NAME BENEFICIALLY OWNED (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Directors, Nominees and Executive 5,057,901 36.27%
Officers as a group (10 persons)
Milton Cooper 1,056,309 7.57%
c/o Kimco Realty Corporation
3333 New Hyde Park Road
Suite 100
New Hyde Park, New York 11042
Safenowitz Partners LP(10) 1,534,601 11.00%
c/o Howard Safenowitz, President
Safenowitz Family Corp., General Partner
21767 Los Alimos Street
Chatsworth, California 91311
Dimensional Fund Advisors Inc.(11) 915,806 6.57%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
- -------------------------
* 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 3,659 shares held in the Company's Employee Stock Ownership Plan
("ESOP"), 16,788 shares held in the Company's and Getty Realty Corp.'s
retirement plans, 115,377 shares held by Mr. Liebowitz' wife as to which he
disclaims beneficial ownership and 30,724 shares held by a charitable
foundation.
(3) Includes 10,190 shares held Mr. Montag's wife as to which he disclaims
beneficial ownership and 10,100 shares held jointly with his wife.
(4) Includes 23,479 shares held as custodian for three minor children, 11,523
shares held by Mr. Safenowitz' wife as to which he disclaims beneficial
ownership, 176,118 shares in The Marilyn Safenowitz Irrevocable Trust of
which he is Co-Trustee and as to which he disclaims beneficial ownership,
and 500,000 shares held by the Safenowitz Family Partnership, LP and
1,534,601 shares held by Safenowitz Partners LP (collectively, the "Limited
Partnerships"). Mr. Safenowitz is the President of Safenowitz Family Corp.,
the General Partner of the Limited Partnerships, and he disclaims
beneficial ownership of the shares held by the Limited Partnerships except
to the extent of his pecuniary interest therein.
(5) Includes 1,607 shares held by Mr. DeLaurentis' wife as to which he
disclaims beneficial ownership, 1,007 shares held in the Company's ESOP and
3,054 shares held in the Company's retirement plan.
(6) Includes 3,576 shares held in the Company's ESOP and 14,819 shares held in
the Company's retirement plan.
(7) Includes 3,804 shares held in the Company's ESOP.
(8) Includes 3,804 shares held in the Company's ESOP and 6,171 shares held in
the Company's retirement plan.
(9) Gives effect to the vesting of outstanding Getty stock options held by
these individuals pursuant to the Change of Control Agreements (as
described below).
(10) 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 Note 4.
(11) Based on a copy of an Amendment to Schedule 13G filed with the SEC and
received by the Company on February 16, 1999. The Company has not attempted
to independently verify the accuracy of the statements set forth in the
Schedule.
3
<PAGE> 6
DIRECTORS' MEETINGS, COMMITTEES AND EXECUTIVE OFFICERS
During the fiscal year ended January 31, 1999, the Board of Directors of
the Company held four regular meetings. Except for one director who was absent
at one meeting, each director who served as a director of the Company during the
fiscal year attended all of the meetings of the Board of Directors of the
Company and of the Committees of the Board on which the director served. Mr.
Milton Safenowitz was a director until his death on October 27, 1998. At the
December 1998 Board Meeting, Mr. Howard Safenowitz, who is the late Mr. Milton
Safenowitz' son, was elected to the Board of Directors to serve until the next
Annual Meeting.
The Board of Directors of the Company has certain standing committees,
including 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. Montag (Chairman), Chanin and
Hall, met one time last year. The Committee selects the firm of independent
public accountants which audits the consolidated financial statements of the
Company and its subsidiaries, discusses the scope and the results of the audit
with the accountants and discusses the Company's financial accounting and
reporting principles. The Committee also examines the summary reports of the
internal auditor for the Company and discusses the adequacy of the Company's
financial controls with the accountants and with management.
The Nominating Committee, consisting of Messrs. Liebowitz (Chairman),
Chanin and Hall, met three times 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
stockholders upon submission in writing to the Secretary of the Company with the
names of such nominees, together with their qualifications for service as a
director of the Company.
The Compensation and Stock Option Committee (the "Compensation
Committee")**, which met once last year, consists of Messrs. Montag (Chairman),
Chanin and Hall. The Compensation Committee administers the Company's Incentive
Compensation Plan, Supplemental Retirement Plan and 1997 Stock Option Plan, and
reviews the compensation of the directors and officers of the Company.
DIRECTORS' COMPENSATION
Directors receive annual retainer fees of $12,000, and committee and board
meeting fees of $1,000 for each meeting attended. Directors who are employees of
the Company do not receive retainers or board meeting fees. Mr. Warren G.
Wintrub, who is a director of Getty Realty Corp. and is also a director of a
subsidiary of the Company, received $4,000 for attending four board meetings of
such subsidiary.
OTHER EXECUTIVE OFFICERS
Other Executive Officers during all or part of fiscal 1999 included Vincent
J. DeLaurentis, age 48, President of the Company since August 1997, and Chief
Operating Officer of the Company since June 1998; A. R. Charnes, age 54, Vice
President-Marketing since September 1998, General Manager of Marketing since
February 1998, and a regional marketing manager of the Company since 1989***;
Michael K. Hantman, age 47, Vice President of the Company since 1991 and
Corporate Controller of the Company since 1985; and Samuel M. Jones, age 62,
Vice President and General Counsel of the Company since 1986 and Corporate
Secretary of the Company since 1994. Management is not aware of any family
relationships among any of its directors, nominees or Executive Officers.
- -------------------------
** The late Milton Safenowitz served as a member of the Audit and Compensation
Committees until June 1998, at which time he resigned from the Committees
and was replaced by Mr. Hall on the Audit Committee and Mr. Chanin on the
Compensation Committee.
*** For the period prior to March 21, 1997, the date the Company was spun-off to
the stockholders of Getty Petroleum Corp., all references to "Company" are
to Getty Petroleum Corp., which after the spin off changed its name to Getty
Realty Corp.
4
<PAGE> 7
COMPENSATION
EXECUTIVE COMPENSATION
The following tables provide information about executive compensation.
SUMMARY COMPENSATION TABLE
The following tables set forth information about the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company (the "Named Executive Officers") for services
in all capacities to the Company and its subsidiaries (prior to March 21, 1997,
Getty Petroleum Corp.) during the periods indicated.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION RESTRICTED SECURITIES
FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL YEAR ENDED SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION JANUARY 31 ($) ($) ($)(1) ($) (#) ($)(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leo Liebowitz 1999 104,521 40,000 22,028
Director, 1998 144,970 116,000 19,866
Chairman and Chief 1997 404,103 123,400 69,843
Executive Officer
Vincent J.
DeLaurentis 1999 319,308 100,000 25,000 54,225
President and Chief 1998 139,615 172,500 75,000 13,121
Operating Officer
A.R. Charnes(3) 1999 129,750 35,000 2,500 18,700
Vice President- 1998 101,915 37,500 5,000 5,935
Marketing 1997 98,735 30,000 1,250 5,590
Michael K. Hantman 1999 127,925 98,623 10,000 30,613
Vice President and 1998 124,126 137,700 20,000 27,704
Corporate Controller 1997 120,429 116,261 10,000 26,170
Samuel M. Jones 1999 189,267 93,978 10,000 37,381
Vice President, 1998 183,762 137,700 20,000 34,286
General Counsel and 1997 178,156 116,261 10,000 32,949
Corporate Secretary
</TABLE>
- -------------------------
(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
the Company's 401(k) savings plan, Company contributions to the Supplemental
Retirement Plan for executives and term life insurance premiums, all as set
forth in the table on the following page.
(3) Mr. Charnes was elected as a Vice President in September 1998. Mr. Charnes
received promotional salary increases when he was appointed General Manager
of Marketing in February 1998 and when he was elected a Vice President in
September 1998.
5
<PAGE> 8
OTHER EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
FISCAL YEAR DEFINED COMPANY SUPPLEMENTAL TERM
ENDED CONTRIBUTION MATCH RETIREMENT LIFE
JANUARY 31 RETIREMENT PLAN 401(K) PLAN PLAN INSURANCE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Leo Liebowitz 1999 $2,516 $ -- $19,512 $ --
1998 2,546 -- 17,320 --
1997 2,373 -- 65,246 2,224
Vincent J. DeLaurentis 1999 2,516 4,800 42,345 4,564
1998 -- -- 11,788 1,333
A. R. Charnes 1999 2,516 3,807 10,405 1,972
1998 2,023 3,054 -- 858
1997 1,900 2,858 -- 832
Michael K. Hantman 1999 2,516 3,829 20,765 3,503
1998 2,546 3,715 18,345 3,098
1997 2,373 3,596 17,573 2,628
Samuel M. Jones 1999 2,516 4,800 25,737 4,328
1998 2,546 4,750 23,070 3,920
1997 2,373 4,750 22,599 3,227
</TABLE>
In December 1994, Getty Petroleum Corp. entered into agreements
(collectively, the "Change of Control Agreements") with its non-director
officers and certain key employees, wherein Getty Petroleum Corp. agreed to make
certain payments under certain circumstances upon a "change of control" of Getty
Petroleum Corp. Under such circumstances, Getty Petroleum Corp. also agreed that
all Getty stock options granted to such officer or key employee would
immediately vest. In March 1996, Getty Petroleum Corp. amended the Change of
Control Agreements to treat a spinoff or similar transaction involving a
substantial portion of Getty Petroleum Corp.'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--the
date the Company was spun off to Getty Petroleum Corp.'s stockholders. On such
date the Company commenced performing Getty Petroleum Corp.'s obligations under
the Change of Control Agreements for the covered Company officers and employees.
On April 8, 1997, the Company formally confirmed to each officer and covered
employee its obligations under the Change of Control Agreements. On March 9,
1998, the Change of Control Agreements were further amended to provide that in
the event of the Company's termination of an officer or covered employee other
than for cause, or by either party following the assignment of materially less
favorable job responsibilities, then for the 24-month period after the date of
termination for officers and two key employees, and 12 months for one officer
and the other covered employees, the Company will pay to each such individual
over the applicable period an amount not less than the average annual sum of the
individual's (i) base salary, (ii) benefits under any incentive or bonus plan
and (iii) total amount of employer contributions (other than elective salary
deferrals) made to the individual's account under 401(k) and other deferred
compensation plans, based upon the three year or shorter period prior to March
21, 1997. In addition, the Company will continue to pay not less than the
foregoing guaranteed salary and benefits to each officer and covered employee as
long as he remains an employee of the Company. The compensation to be paid to an
officer or key employee pursuant to a Change of Control Agreement will be
reduced by the amount of compensation, if any, the officer or key employee
receives from any other employer during the relevant period.
Mr. DeLaurentis' rights in the event of a change of control are set forth
in an employment agreement dated July 10, 1997 and amended and restated on April
8, 1999. Under the agreement, at the time of a change in control all of Mr.
DeLaurentis' stock options will fully vest, and if he is terminated or if his
responsibilities are diminished, he will be entitled to receive as compensation
$450,000 per year for two years following the change of control, together with
customary benefits extended to Company executives. This agreement provides that
Mr. DeLaurentis' initial base salary was $300,000 per year, which subsequently
was increased by the Board of Directors to $320,000 per year. The agreement,
which was to expire on August 3, 1999, has been extended for a 12 month term and
will thereafter be extended for additional 12 month terms unless it is
6
<PAGE> 9
terminated by the Board of Directors not later than 90 days before the
commencement of any subsequent 12 month term.
The Named Executive Officers participate in the Company's Employee Stock
Ownership Plan ("ESOP"). For the ESOP year ended December 31, 1998, 134,939
shares were awarded to the eligible Named Executive Officers and employees of
the Company and its subsidiaries. There remain 402,780 shares of Common Stock in
the ESOP Trust, to be allocated to the eligible employees during the next three
ESOP plan years. The following table sets forth the ESOP shares allocated to the
Named Executive Officers:
ALLOCATION OF ESOP SHARES
<TABLE>
<CAPTION>
# SHARES
ALLOCATED TOTAL SHARES % SHARES
ON 12/31/98 ALLOCATED VESTED
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Leo Liebowitz 1,870 3,840 20%
Vincent J. DeLaurentis 1,007 1,007 --
A.R. Charnes 1,870 3,576 20%
Michael K. Hantman 1,870 3,840 20%
Samuel M. Jones 1,870 3,840 20%
</TABLE>
STOCK OPTIONS
The following table sets forth additional information with respect to the
stock options granted to the Named Executive Officers during the fiscal year
ended January 31, 1999, including the potential realizable value from the stock
options, assuming that they are exercised at the end of the option term and
assuming 5% and 10% annual rates of stock price appreciation during the option
term.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
% OF TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE
GRANTED TO AT ASSUMED ANNUAL RATES
EMPLOYEES IN OF STOCK PRICE APPRECIATION
OPTIONS FISCAL YEAR EXERCISE OR FOR OPTION TERM(1)
GRANTED ENDED BASE PRICE EXPIRATION ----------------------------
NAME (#) 1-31-99 ($/SHARE) DATE 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Leo Liebowitz -- -- -- -- -- --
Vincent J. DeLaurentis 25,000 38.9 3.25 12/16/08 51,098 129,492
A. R. Charnes 2,500 3.9 3.25 12/16/08 5,110 12,949
Michael K. Hantman 10,000 15.6 3.25 12/16/08 20,439 51,797
Samuel M. Jones 10,000 15.6 3.25 12/16/08 20,439 51,797
</TABLE>
- -------------------------
(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 the Company's
Common Stock appreciates, the value of the Company's Common Stock held by
the stockholders will also increase. For example, the market value of the
Company's Common Stock on January 31, 1999 was approximately $39,220,751,
based upon the market price on that date. If the share price of the
Company's Common Stock increases by 5% per year, the market value on January
31, 2009 of the same number of shares would be approximately $63,886,000. If
the price of the Company's
7
<PAGE> 10
Common Stock increases by 10% per year, the market value on January 31, 2009
would be approximately $101,729,000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table provides information as to the value of stock options
held by each of the Named Executive Officers at January 31, 1999 measured in
terms of the closing price of the Company's Common Stock on January 31, 1999. No
options were exercised by the Named Executive Officers during the fiscal year
ended January 31, 1999.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED(#) UNEXERCISABLE(1) UNEXERCISABLE(1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Leo Liebowitz -- -- -- --
Vincent J.
DeLaurentis -- -- 15,000 --
85,000 --
A. R. Charnes -- -- 1,313 --
6,250 --
Michael K. Hantman -- -- 72,461 13,539
25,000 --
Samuel M. Jones -- -- 80,115 15,625
25,000 --
</TABLE>
- -------------------------
(1) Except for the options granted in the last two fiscal years, pursuant to the
Change in Control Agreements all unexercisable options granted in prior
fiscal years held by Messrs. Hantman and Jones became exercisable on March
21, 1997.
STOCK OPTION PLAN
The Company's 1997 Stock Option Plan (the "Stock Option Plan"), which has
been approved by the Company's stockholders and was amended in 1998 after
approval of the stockholders, authorizes the grant to directors, officers and
other key employees of the Company and its subsidiaries of long-term incentive
share awards in the form of options ("Options") to purchase shares of the
Company's Common Stock. The Stock Option Plan is administered by a committee of
three members of the Company's Board of Directors (the "Compensation
Committee"). The maximum number of shares which may be the subject of
outstanding Options under the Stock Option Plan is 2,000,000 and is subject to
further adjustments for stock dividends and stock splits. As of January 31,
1999, 826,711 shares of the Company's Common Stock were issuable upon the
exercise of options then outstanding under the Stock Option Plan. No grants may
be made under the Stock Option Plan after March 2007. The number of shares
remaining for grant under the stock option plan at April 22, 1999 was 683,425.
The recipients, terms (including price and exercise period) and type of
Option to be granted under the Stock Option Plan is 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 the Company's 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 the Company's 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 12 months
following the grant of the Option and are exercisable in installments as are
specified in the Stock
8
<PAGE> 11
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
The Company 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 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 plan but in no event more than 3% of the employee's compensation.
The Company 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 the Company'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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As previously noted, the current members of the Compensation Committee are
Messrs. Montag, Chanin (since June 18, 1998) and Hall. The late Milton
Safenowitz, a director of Getty Realty Corp. and former officer of the
predecessor company, Getty Petroleum Corp., served on the Compensation Committee
during the past fiscal year until he resigned from the Compensation Committee on
June 18, 1998.
9
<PAGE> 12
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
To Our Stockholders:
This report addresses the Company's compensation policies with respect to
the compensation of the Chief Executive Officer and the other executive officers
during fiscal 1999. The Compensation and Stock Option Committee (the
"Compensation Committee") is responsible for setting the policies which govern
base salary compensation, the Incentive Compensation Plan, the Retirement Plan,
the Supplemental Retirement Plan, and the Stock Option Plan and for determining
amounts payable under these Plans.
Compensation of the Company's Executive Officers (with the exception of the
Chief Executive Officer) is recommended by the Chief Executive Officer to the
Compensation Committee of the Board of Directors, 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. The
Company's philosophy is that under its total compensation program the Chief
Executive Officer and other executives should: (1) have a greater portion of
compensation at risk than other employees and (2) have a significant portion of
their compensation tied directly to the performance of the business.
BASE SALARY
The base salary program is designed to provide each employee with a salary
competitive with salaries paid for similar positions in similar companies.
Besides being able to attract and retain capable people, the Company will
endeavor to ensure that each employee's compensation will be based on the
person's ability, effort and achievement. In December 1998, consistent with the
practice of the prior few years, except for Mr. DeLaurentis who received a merit
increase earlier in the year and Mr. Charnes who received a promotional increase
when he was elected a Vice President, all executive officers received a small
increase in base salary.
ANNUAL INCENTIVE AWARDS
Annual Incentive Awards are provided under the Company's Incentive
Compensation Plan ("ICP"). The purpose of the ICP is to promote the achievement
of the Company's targeted business objectives by providing competitive
incentives to those employees who can impact the Company's performance. The
total amount of cash available for annual ICP awards is approved by the Board of
Directors after it evaluates a combination of criteria, and the Company achieves
specific goals. Awards are based on a combination of Company performance,
business unit performance, and individual performance based on specific
objectives.
The Compensation Committee determined that the incentive compensation of
the Chief Executive Officer and the other Executive Officers (shown under the
caption "Bonuses" in the Summary Compensation Table) should be between 31% and
80% of the targeted amount each executive officer could have received under the
ICP for the fiscal year ended January 31, 1999.
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 the Company 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 the Company. In December 1998, options were awarded to four
officers and certain key employees and certain directors. Mr. Liebowitz, who has
not participated in the Stock Option Plan, did not receive any option grants
during the fiscal year.
10
<PAGE> 13
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 the
Company.
Section 162(m) of the Internal Revenue 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 the Company's 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 a Company
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 as an ICP
award, upon the market price of the Company's shares on the date stock options
are exercised, and the number of options exercised by an executive in any fiscal
year.
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 of 1933, as amended or under
the Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and should not
otherwise be deemed filed under such Acts.
April 30, 1999 Compensation and Stock Option
Committee:
Richard E. Montag (Chairman)
Matthew J. Chanin
Ronald E. Hall
CERTAIN TRANSACTIONS
As a result of the spinoff, Mr. Liebowitz beneficially owns approximately
the same percentage of the outstanding common stock of Getty Realty Corp.
(approximately 17%) as he owns of the Company's Common Stock, without giving
effect to the issuance of 5% of the Company's Common Stock to the ESOP. See
"Beneficial Ownership of Common Stock." Mr. Liebowitz serves as a director of
Getty Realty Corp. and is Getty Realty Corp.'s President and Chief Executive
Officer. Mr. Howard Safenowitz and members of his family, together with the two
Limited Partnerships, in the aggregate beneficially own approximately 17% of the
common stock of Getty Realty Corp. Mr. Safenowitz is also a director of Getty
Realty Corp.
In connection with the spinoff, Getty Realty Corp., as lessor, and the
Company, as lessee, entered into a Master Lease Agreement (the "Master Lease")
with respect to approximately 1,000 service station and convenience store
properties and 10 distribution terminals and bulk plants. The initial term of
the Master Lease is 15 years (or periods ranging from one to fifteen years with
respect to approximately 400 properties leased by Getty Realty Corp. from third
parties), and generally provides the Company with four ten-year renewal options
(or with respect to such leased properties, such shorter period as the
underlying lease may provide). The Master Lease is a "triple-net" lease, so the
Company is responsible for the cost of all taxes, maintenance, repair, insurance
and other operating expenses. Rent for each of the properties was set using the
fair market value of each property, assuming certain environmental conditions
for which Getty Realty Corp. is responsible. For the past fiscal year, the
Company paid net lease payments to Getty Realty Corp. aggregating approximately
$56.4 million, and estimates that it will pay $56.2 million to Getty Realty
Corp. in the current fiscal year.
The Company and Getty Realty Corp. also entered into a Services Agreement
(the "Services Agreement"), under which the Company provides certain
administrative and technical services to Getty Realty Corp. and Getty Realty
Corp. provides certain limited services to the Company. The Services Agreement
was extended for one year effective March 1, 1999, terminable in whole or in
part by either the
11
<PAGE> 14
Company or Getty Realty Corp. on 30 days' notice. The net fees paid by Getty
Realty Corp. during the past fiscal year to the Company under the Services
Agreement were $960,000. The Company presently expects that many of such
services will continue to be provided for the remainder of the current fiscal
year.
In addition, the Company and Getty Realty Corp. entered into a Trademark
License Agreement providing for an exclusive, royalty-free license to the
Company of certain Getty(R) trademarks, service marks and trade names (including
the name "Getty") used in connection with the Company's business, within the
territory specified in the agreement. The term of the agreement is 55 years, but
in the event that the Master Lease terminates before then, the license will
become non-exclusive and the Company will pay Getty Realty Corp. certain
customary signage rental and royalty fees.
The Company and Getty Realty Corp. also entered into a Tax Sharing
Agreement that defines the parties' rights and obligations with respect to
filing of returns, payments, deficiencies and refunds of federal, state and
other income, franchise or motor fuel taxes relating to the Company's business
for tax years prior to and including March 21, 1997 and with respect to certain
tax attributes of the Company after that date.
12
<PAGE> 15
STOCK PERFORMANCE GRAPH
COMPARATIVE TOTAL RETURNS
APRIL 1, 1997 THROUGH JANUARY 31, 1999*
GETTY (GPM), S&P 500, AND PEER GROUP
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the Standard & Poor's 500 Stock Index and the
Peer Group for the period from April 1, 1997 through January 31,1999.
GRAPH
<TABLE>
<CAPTION>
GETTY PETE MARKETING INC STANDARD & POORS 500 PEER GROUP
------------------------ -------------------- ----------
<S> <C> <C> <C>
'4/1/97' 100.00 100.00 100.00
'1/31/98' 133.76 131.44 138.82
'1/31/99' 58.45 173.85 85.56
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1997 1998 1999
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Getty Petroleum Marketing Inc. $100.00 $133.76 $ 58.45
- -------------------------------------------------------------------------------------------------
Standard & Poor's 500 $100.00 $131.44 $173.85
- -------------------------------------------------------------------------------------------------
Peer Group $100.00 $138.82 $ 85.56
- -------------------------------------------------------------------------------------------------
</TABLE>
Assumes $100 invested at the open of trading on 4/1/97 in the Company's Common
Stock, Standard & Poor's 500, and Peer Group. The Company commenced trading on
the New York Stock Exchange on 4/1/97.
*Cumulative total return assumes reinvestment of dividends.
The Company has chosen as its Peer Group the following companies: Crown
Central Petroleum Corp., Dairy Mart Convenience Stores, Inc., FFP Marketing Inc.
and the Uni-Marts, Inc. The Company has chosen these companies as its Peer Group
because a substantial segment of each of their businesses is petroleum marketing
and distribution.
E-Z Serve Corp. was included in the Peer Group in the Proxy Statement for
the previous fiscal year. However, E-Z Serve Corp. is no longer publicly traded
and its financial results are not available. Accordingly, E-Z Serve Corp. was
removed from the Peer Group and Uni-Marts, Inc. has been added to the Peer
Group. The Company owns 487,000 shares of Uni-Marts common stock, which the
Company believes is approximately 7% of the total number of Uni-Marts common
shares outstanding.
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 the Company specifically incorporates this graph by reference, and
should not otherwise be deemed filed under such Acts.
We cannot assure you that the Company's stock performance will continue in
the future with the same or similar trends depicted in the graph above. The
Company will not make or endorse any predictions as to future stock performance.
13
<PAGE> 16
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Pursuant to the direction of the Board of Directors, on March 23, 1999, the
Audit Committee appointed the firm of PricewaterhouseCoopers L.L.P., subject to
ratification by the stockholders at the Annual Meeting, to audit the accounts of
the Company with respect to its operations for the fiscal year ending January
31, 2000 and to perform such 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.
Representatives of the firm of PricewaterhouseCoopers L.L.P., the Company's
principal auditors for the most recently completed fiscal year, 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 the Company's independent public
auditors for the fiscal year ending January 31, 2000.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act and the rules
issued thereunder, the Company's executive officers and directors are required
to file with the Securities and Exchange Commission and the New York Stock
Exchange reports of ownership and changes in ownership of the Common Stock.
Copies of such reports are required to be furnished to the Company. Based on its
review of Forms 3 and 4 received by it during fiscal 1999 and of Forms 5
received by it with respect to fiscal 1999, the Company believes that during
fiscal 1999 all of its 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 these 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 held of record by such persons. The Company 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 the Company.
April 30, 1999 By Order of the Board of Directors,
SAMUEL M. JONES
Samuel M. Jones
Vice President, General Counsel
and Corporate Secretary
14
<PAGE> 17
-----------------------------------------
WHEN PROXY IS OKAYED PLEASE SIGN &
DATE IT ABOVE
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
GETTY PETROLEUM MARKETING INC.
JUNE 17, 1999
-PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED-
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
<S> <C> <C> <C>
WITHHOLD AUTHORITY
TO VOTE FOR ALL NOMINEES
FOR LISTED AT RIGHT
1. ELECTION OF FOR AGAINST ABSTAIN
DIRECTORS [ ] [ ] NOMINEES: M. CHANIN 2. The ratification of the appointment of [ ] [ ] [ ]
R. HALL PricewaterhouseCoopers L.L.P. as indepen-
L. LIEBOWITZ dent auditors for the Company for the fiscal
R. MONTAG year ended January 31, 2000.
H. SAFENOWITZ
H. SILVERMAN 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 January 31, 1998.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
SIGNATURE_____________________ DATE______________ SIGNATURE_____________________ DATE______________
NOTE: Please sign exactly as the name appears herein. 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 authorized officer. If a partnership, please
sign in partnership name by authorized person.
</TABLE>
<PAGE> 18
- -------------------------------------------------------------------------------
GETTY PETROLEUM MARKETING INC.
125 JERICHO TPKE., JERICHO, N.Y. 11753
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Getty Petroleum Marketing Inc. hereby
constitutes and appoints LEO LIEBOWITZ and SAMUEL M. JONES, and each of them,
the true and lawful attorneys, agents and proxies 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 meeting then that one,) all of the shares of stock of
the corporation that the undersigned would be entitled, if 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 June 17, 1999 and at any
adjournments thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
