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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11 or Rule 14a-12
Getty Petroleum Corp.
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(Name of Registrant as Specified In Its Charter)
Getty Petroleum Corp.
- ---------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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[ ] 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
GETTY (registered trademark)
Getty Petroleum Corp.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 15, 1995
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To the Stockholders of
GETTY PETROLEUM CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Getty Petroleum Corp. (hereinafter called the "Company" or "Getty") will be
held at 1301 Avenue of the Americas, New York, New York (2nd floor), on
June 15, 1995 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) The ratification of the appointment of Coopers & Lybrand as
independent auditors for the Company for the fiscal year ended
January 31, 1996.
(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 17, 1995 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,
Vice President, General Counsel
and Corporate Secretary
Jericho, New York
April 28, 1995
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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.
1
<PAGE>
GETTY PETROLEUM CORP.
125 JERICHO TURNPIKE, JERICHO, NEW YORK 11753
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PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
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This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Directors of Getty Petroleum
Corp. (hereinafter called the "Company" or "Getty") to be voted at the
Annual Meeting of Stockholders to be held at 1301 Avenue of the Americas,
New York, New York (2nd floor), on June 15, 1995 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 17, 1995 record date for securities entitled to vote at
the meeting, the Company had outstanding (excluding shares held in
Treasury) 12,644,904 shares of Common Stock. Each such outstanding share is
entitled to one vote. In conformity with Delaware 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 28, 1995. The date by which proposals
of security holders intended to be presented at the next annual meeting
must be received by the Company for inclusion in the proxy statement and
form of proxy for such meeting is December 30, 1995.
ELECTION OF DIRECTORS
Five directors are to be elected at the meeting for a term of one year
or until their respective successors shall be elected and qualified. The
plurality vote of the holders of a majority of the shares having voting
power present in person or represented by proxy at the meeting is necessary
for the election of the directors.
It is intended that votes will be cast pursuant to the enclosed proxy
for the election of the nominees named in the tabulation set forth below.
In the event that any of the nominees should become unable or unwilling to
serve as a director, it is intended that the proxy will be voted for the
election of such person, if any, as shall be 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:
Name -- Age Offices Held in Getty and/or Principal
Served as Director Since Occupations for Past Five Years
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Milton Cooper--66 Chairman of the Board of Kimco Realty
May 1971 Corporation, a real estate investment trust.
Served as Vice President of Getty until June,
1992. Director, Secretary and Assistant
Treasurer of CLS General Partnership Corp.,
the general partner of Power Test Investors
Limited Partnership, 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.
Leo Liebowitz--67 President and Chief Executive Officer (CEO)
May 1971 of Getty. Director, President and Treasurer
of CLS General Partnership Corp., the general
partner of Power Test Investors Limited
Partnership.
Herbert Lotman--61 Chairman of the Board and Chief Executive
September 1987 Officer of Keystone Foods Corporation, a food
manufacturer and distributor, for more than 5
years. Director of CoreStates Financial Corp.
and PCI Services.
2
<PAGE>
Name -- Age Offices Held in Getty and/or Principal
Served as Director Since Occupations for Past Five Years
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Milton Safenowitz--67 Executive Vice President of Getty until his
May 1971 retirement on February 1, 1990. Director,
Executive Vice President and Assistant
Secretary of CLS General Partnership Corp.,
the general partner of Power Test Investors
Limited Partnership.
Warren G. Wintrub--61
June 1993 Retired Partner, former member of the
Executive Committee and Chairman of the
Retirement Committee of Coopers & Lybrand, an
international professional services
organization, for more than 5 years prior to
his retirement in January 1992. Director of
Chromcraft Revington, Inc., Corporate
Property Associates 10 Incorporated and
Corporate Property Associates 11
Incorporated.
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 as 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 directors, Chief Executive Officer, nominees for director and four
other most highly compensated executive officers and all directors and
executive officers of the Company as a group beneficially owned as of
January 31, 1995 the number of shares of Getty Common Stock as set forth in
the table below. 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 SEC rules.
Shares of Percent
Common Stock of Class
Name Beneficially Owned (1)
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Milton Cooper 1,055,038 (2) 7.99%
Leo Liebowitz 2,477,270 (3) 18.76%
Herbert Lotman 40,415 *
Milton Safenowitz 2,260,195 (4) 17.11%
Warren G. Wintrub 8,750 *
James R. Craig 42,698 *
John J. Fitteron 101,991 *
Samuel M. Jones 46,249 *
Alvin A. Smith 132,535 1.00%
Directors and Executive
Officers as a group (10 persons) 6,199,316 46.94%
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* Total shares beneficially owned in all cases 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 he is a partner,
2,013 shares held by wife and 100,000 shares held by a charitable
foundation.
(3) Includes 166,410 shares held in trust for children, 230,977 shares held
by wife and 20,724 shares held by a charitable foundation.
(4) Includes 2,084,077 shares held by Irrevocable Trust for the benefit of
Milton Safenowitz and 176,118 shares held by Irrevocable Trust for the
benefit of his wife.
3
<PAGE>
With the exception of Leo Liebowitz, whose address is care of Getty
Petroleum Corp., 125 Jericho Tpke., Jericho, New York 11753 and Milton
Safenowitz, whose address is 7124 Queenferry Cr., Boca Raton, FL 33496, who
may be deemed to be control persons of Getty, and Milton Cooper, whose
address is care of Kimco Realty Corporation, 3333 New Hyde Park Road, Suite
100, New Hyde Park, New York 11042-0020, management knows of no other
person owning of record or beneficially more than 5% of the outstanding
Common Stock.
DIRECTORS' MEETINGS, COMMITTEES AND COMPENSATION
During the fiscal year ended January 31, 1995, four regular meetings
and one special meeting of the Board of Directors of the Company were held.
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 each such director served. 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. Wintrub (Chairman), Lotman
and Safenowitz, met one time 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 the internal auditors for the Company and discusses the
adequacy of Getty's financial controls with the accountants and with
management.
The Nominating Committee, consisting of Messrs. Liebowitz (Chairman),
Cooper and Safenowitz, met two 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 shareholders 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, which met one time last
year, consists of Messrs. Cooper (Chairman), Liebowitz and Safenowitz. The
Committee administers Getty's Incentive Compensation Plan, Supplemental
Retirement Plan and the Stock Option Plans, and reviews the annual
compensation of the officers of Getty.
Directors' Compensation
Directors receive annual retainer fees of $7,000, and committee and
board meeting fees of $1,000 for each meeting attended. Directors who are
employees of the Company do not receive retainers or board meeting fees.
Other Executive Officers
Other executive officers include John J. Fitteron, age 53, Senior Vice
President and Chief Financial Officer of Getty since 1986 and Treasurer of
Getty since 1994; Alvin A. Smith, age 57, Senior Vice President of Getty
since 1985 and Chief Operating Officer of Getty since 1994; James R. Craig,
age 43, Vice President of Getty since 1987; Michael K. Hantman, age 43,
Vice President of Getty since 1991 and Corporate Controller of Getty since
1985; and Samuel M. Jones, age 58, Vice President and General Counsel of
Getty since 1986 and Corporate Secretary of Getty since 1994. Management is
not aware of any family relationships between any of its directors,
nominees or executive officers.
4
<PAGE>
Executive Compensation
The following tables provide information about executive compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of
the Chief Executive Officer and each of the other four most highly
compensated executive officers of Getty Petroleum Corp. for services in all
capacities to Getty Petroleum Corp. and its subsidiaries during the periods
indicated.
<TABLE>
<CAPTION>
Annual Compensation Long Term
Fiscal Year Ended January 31 Compensation Awards
--------------------------------------- -------------------
Restricted
Other Annual Stock All Other
Salary Bonus Compensation Awards Options Compensation
Name and Principal Position Year ($) ($) ($) (1) ($) (#) ($) (2)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leo Liebowitz 1995 387,228 164,500 60,713
Director, 1994 384,860 193,950 53,564
President and Chief 1993 384,860 119,760 59,545
Executive Officer
Alvin A. Smith 1995 268,606 99,000 15,000 40,353
Senior Vice 1994 261,615 107,247 5,000 35,496
President and Chief 1993 258,200 54,600 22,500 34,739
Operating Officer
John J. Fitteron 1995 187,849 99,000 15,000 32,043
Senior Vice President, 1994 182,522 107,247 5,000 25,222
Treasurer and Chief 1993 177,000 54,600 22,500 27,599
Financial Officer
Samuel M. Jones 1995 154,646 79,000 10,000 26,616
Vice President, 1994 146,808 87,432 5,000 21,532
General Counsel and 1993 137,700 44,600 10,000 21,706
Corporate Secretary
James R. Craig 1995 137,843 79,000 10,000 24,260
Vice President 1994 122,354 87,432 5,000 18,665
1993 103,000 44,600 10,000 16,502
<FN>
- --------------
(1) None of the Executive Officers listed received perquisites or other
personal benefits that exceeded the lesser of $50,000 or 10% of the
salary and bonus for such officer.
(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 as follows:
Fiscal Year Defined Company Supplemental Term
Ended Contribution Match Retirement Life
January 31 Retirement Plan 401(k) Plan Plan Insurance
- -------------------------------------------------------------------------------
Leo Liebowitz 1995 $2,394 $ -- $56,140 $2,179
1994 4,140 -- 47,245 2,179
1993 4,022 -- 50,603 4,920
Alvin A. Smith 1995 2,394 4,620 29,859 3,480
1994 4,140 4,481 23,395 3,480
1993 4,022 4,364 23,503 2,850
5
<PAGE>
Fiscal Year Defined Company Supplemental Term
Ended Contribution Match Retirement Life
January 31 Retirement Plan 401(k) Plan Plan Insurance
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John J. Fitteron 1995 2,394 4,620 22,579 2,450
1994 3,885 4,497 14,390 2,450
1993 4,022 4,364 16,854 2,359
Samuel M. Jones 1995 2,394 4,611 17,507 2,104
1994 3,310 4,367 11,751 2,104
1993 3,257 4,131 11,675 2,100
James R. Craig 1995 2,394 3,478 16,546 1,842
1994 2,898 3,405 10,520 1,842
1993 2,385 3,090 9,227 1,800
</TABLE>
In December 1994, the Company entered into agreements with its non-
director officers and certain key employees, wherein the Company agreed
that, under certain circumstances if there is a change of control of the
Company, for the 36-month period thereafter for officers and a shorter
period of time with respect to those certain key employees, the Company
will pay to the person his/her average compensation for the requisite
period prior to the change of control.
STOCK OPTIONS
The following table sets forth as to the persons named in the Summary
Compensation Table additional information with respect to the stock options
granted during the fiscal year ended January 31, 1995, including the
potential realizable value from the stock options assuming they are
exercised at the end of the option term and assuming 5% and 10% annual
rates of stock price appreciation during the option term.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (1)
- ---------------------------------------------------------------------------------------------------------
% of Total
Options
Granted to
Employees in
Fiscal Year Exercise or
Options Ended Base Price Expiration
Name Granted (#) 1-31-95 ($/Share) Date 5% ($) 10% ($)
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<S> <C> <C> <C> <C> <C> <C>
Leo Liebowitz -- -- -- -- -- --
Alvin A. Smith 15,000 15.42% 10.875 12/9/04 102,588 259,979
John J. Fitteron 15,000 15.42% 10.875 12/9/04 102,588 259,979
Samuel M. Jones 10,000 10.28% 10.875 12/9/04 68,392 173,319
James R. Craig 10,000 10.28% 10.875 12/9/04 68,392 173,319
<FN>
- ---------------
(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
future unknown or volatile factors.
</TABLE>
6
<PAGE>
If the price of Getty Common Stock appreciates, the value of Getty
Common Stock held by the shareholders will also increase. For example, the
market value of Getty Common Stock on January 31, 1995 was approximately
$146,987,000 based upon the market price on that date. If the share price
of Getty's Common Stock increases by 5% per year, the market value on
January 31, 2005 of the same number of shares would be approximately
$239,426,000. If the price of Getty's Common Stock increases by 10% per
year, the market value on January 31, 2005 would be approximately
$381,246,000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table provides information as to options exercised by
each of the named executive officers of Getty during the fiscal year ended
January 31, 1995 and the value of options held by such officers at year end
measured in terms of the closing price of Getty Common Stock on January 31,
1995. No options were exercised by the named executive officers in the
fiscal year ended January 31, 1995, and accordingly no shares were acquired
or value realized upon the exercise of options.
Value of Unexercised
Number of Unexercised In-the-Money Options/SARs
Options at Fiscal Year End (#) at Fiscal Year End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---------------------------------------------------------------------------
Leo Liebowitz -- --
-- --
Alvin A. Smith 129,423 62,364
33,750 19,687
John J. Fitteron 101,281 30,423
33,750 19,687
Samuel M. Jones 42,776 13,268
20,375 11,250
James R. Craig 42,384 14,630
20,250 11,250
Stock Option Plans
The Company's 1985, 1988 and 1991 Stock Option Plans (the "Stock
Option Plans"), which have been approved by the Company's stockholders,
authorize 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 and, in the case of the 1985 Stock Option Plan, stock appreciation
rights ("SARs"). The Stock Option Plans are administered by a committee of
three members of the Company's Board of Directors (the "Option Committee"),
who are not eligible to participate in the Stock Option Plans while serving
on the Option Committee. The maximum number of shares of the Company's
Common Stock which may be the subject of outstanding Options and SARs under
the 1985 Stock Option Plan is 281,420 and is subject to further adjustments
for stock dividends and stock splits. No grants may be made under the 1985
Stock Option Plan after June 19, 1995. The maximum number of shares which
may be the subject of outstanding Options under the 1988 Stock Option Plan
is 303,876 and is subject to further adjustments for stock dividends and
stock splits. No grants may be made under the 1988 Stock Option Plan after
March 31, 1998. The maximum number of shares which may be the subject of
outstanding Options under the 1991 Stock Option Plan is 500,000 and is
subject to further adjustments for stock dividends and stock splits. No
grants may be made under the 1991 Stock Option Plan after March 21, 2001.
The recipients, terms (including price and exercise period) and type
of Option (and/or SAR) to be granted under the Stock Option Plans are
determined by the Option Committee; however, the Option price per share
under the Stock Option Plans generally must be at least equal to the fair
market value of a share of the Company's Common Stock (110% of such amount
in the case of Incentive Stock Options granted to any
7
<PAGE>
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 Plans 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 Option Plan or the terms of each Option. The
exercise period of an Option may not exceed 10 years following its grant.
SARs may be granted in tandem under the 1985 Stock Option Plan with Options
or separately, and are subject to similar exercise limitations.
The remaining shares available for grant under the 1985, 1988 and 1991
Stock Option Plans are 79,351, 63,156 and 112,050, respectively.
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
such employee's contribution to the plan but in no event more than 3% of
such employee's compensation.
On June 15, 1989 the Board of Directors approved the Supplemental
Retirement Plan for Executives (the "Supplemental Plan"). Under the
Supplemental Plan, which is unqualified for purposes of Section 401(a) of
the Internal Revenue Code of 1986, as amended, 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 such
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
trust shall 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 shall vest in the same manner as under the
Retirement Plan and shall be 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.
In the event of the death of Mr. Liebowitz, benefits will amount to
twelve months salary. In the event of termination of employment due to
illness or incapacity for a period of one year or longer, benefits will
amount to twenty-four months salary.
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
As previously noted, the current members of the Compensation and Stock
Option Committee are Messrs. Cooper (a former Vice President), Safenowitz
(a former Executive Vice President) and Liebowitz, the President and Chief
Executive Officer. Mr. Liebowitz did not participate in decisions with
respect to his own compensation. Messrs. Cooper, Safenowitz and Liebowitz
are also Directors and the principal stockholders of CLS General
Partnership Corp., the general partner of Power Test Investors Limited
Partnership (see "Certain Transactions").
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 CEO and the other executive officers during
fiscal 1995. The Committee is responsible for setting and administering the
policies which govern awards in the Incentive Compensation Plan, the
Retirement Plan, the Supplemental Retirement Plan, the Stock Option Plans
and annual base salary compensation.
8
<PAGE>
Compensation of the Company's executive officers (with the exception
of the CEO) is recommended by the CEO to the Compensation and Stock Option
Committee of the Board of Directors, is discussed, reviewed and approved by
the full Board, as is the compensation of the CEO. The Company's philosophy
is that under its total compensation program the CEO 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.
To assist it in performing its duties, in 1993 the Compensation
Committee retained and met with independent compensation consultants. Said
consultants were retained to perform market surveys and recommend
appropriate salary ranges for each officer position. The Committee then
established competitive salary levels for each executive officer. The
salary of the President and Chief Executive Officer was evaluated and
compared with other Chief Executive Officers of similar companies.
Base Salary
The base salary program is designed to provide each individual with a
salary competitive with salaries paid for similar positions in similar
companies. Besides being able to attract and retain capable people, Getty
will endeavor to ensure that each individual's compensation will be based
on the person's ability, effort and achievement.
In 1991, in light of the Company's financial results, the Committee
froze the base salary component of the CEO and other executive officers.
Upon the recommendation of the consultants, the freeze was lifted in June
of 1993. In December 1994 all executive officers received a small increase
in base salary, except for Alvin A. Smith who received a greater increase
to reflect his promotion to Chief Operating Officer.
Annual Incentive Awards
Annual Incentive Awards are provided under the Getty Petroleum Corp.
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 evaluating a combination of
criteria, and achievement of specific goals. Awards are based on a
combination of Company performance, business unit performance, and
individual performance based on specific objectives.
The Committee determined that the incentive compensation of the CEO
and other executive officers (shown under the caption "Bonuses" in the
Summary Compensation Table) should be decreased in light of the financial
results for the fiscal year ended January 31, 1995. The reduction resulted
in ICP awards which ranged from 57% to 75% of the maximum amount each
executive officer could have received under the ICP.
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 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 1994
options were awarded to all executive officers and certain key employees
and directors, except for Mr. Liebowitz, who has not participated in the
Stock Option Plan.
The 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 interest
through varied plans that are structured to coincide with the long term
vision of Getty.
The report of the Compensation and Stock Option Committee shall 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 (the "Securities Act") or under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), except to the extent that the
Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
April 28, 1995 Compensation and Stock Option Committee:
Milton Cooper (Chairman)
Leo Liebowitz
Milton Safenowitz
9
<PAGE>
Certain Transactions
In January 1985, Power Test Realty Company Limited Partnership (the
"Operating Partnership") was formed to acquire from Texaco Inc. and two of
its subsidiaries certain assets used in the Northeastern United States
petroleum marketing operations of Getty Oil Company. At the same time,
Power Test Investors Limited Partnership (the "Partnership") was also
formed to contribute 99% of the capital of and become the limited partner
in the Operating Partnership. On February 1, 1985, the Operating
Partnership purchased the Getty assets (including 321 service stations, 8
distribution terminals, rolling stock and marketing equipment) and leased
them to the Company (or certain of its subsidiaries) on a long-term net
lease basis. The Company does not have any ownership interest in the
Partnership or the Operating Partnership, and does not have any ownership
interest in or option to purchase the leased assets, except under certain
limited circumstances involving properties that have become uneconomical or
unsuitable for the Company's use or if there has been significant damage to
any such properties. Neither the Partnership nor the Operating Partnership
conducts any substantial activities other than those related to the
ownership and leasing to the Company of the Getty assets.
CLS General Partnership Corp., a Delaware corporation ("CLS"), is the
sole general partner of both the Partnership and the Operating Partnership.
The three stockholders of CLS, Leo Liebowitz, Milton Safenowitz and Milton
Cooper (the "Principal Holders"), are also directors, stockholders, and in
the case of Mr. Liebowitz, an officer of the Company. The Company's
stockholders of record on June 13, 1985 were offered the right to
participate in the Operating Partnership by means of a pro rata offering of
limited partnership interests in the Partnership. The offering was
completed on July 31, 1985. As of January 31, 1995, the Principal Holders
beneficially owned an aggregate of 3,105,964 (48%) of the general and
limited partnership interests in the Partnership.
During fiscal 1995, the Company made net lease payments to the
Operating Partnership of approximately $10,925,000. The Company received
payments of $624,000 from the Operating Partnership for services performed
by the Company (including the provision of office space and related
services) during fiscal 1995.
STOCK PERFORMANCE GRAPH
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
Getty Petroleum (GTY), S&P 500, Peer Group
(Performance results through 1/31/95)
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Company's Common Stock
against the cumulative total return of the Standard & Poor's 500 Stock
Index and a peer group for the period of five years ended January 31, 1995.
1990 1991 1992 1993 1994 1995
- ---------------------------------------------------------------------------
GTY $100.00 $ 79.32 $ 83.76 $ 56.93 $ 90.81 $ 63.03
S&P 500 $100.00 $108.38 $132.98 $147.28 $166.26 $167.12
Peer Group $100.00 $ 94.11 $104.77 $ 94.45 $135.11 $118.98
- ---------------------------------------------------------------------------
Assumes $100 invested at the close of trading 1/31/90 in Getty Petroleum
Corp. common stock, S&P 500 and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
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The Company has chosen, as its peer group, the following companies:
Ashland Oil, Diamond Shamrock, Inc., Horsham Corp., Repsol S.A., Sun
Company and Total Petroleum. To the Company's knowledge, other than Getty,
there are no publicly traded companies whose principal business is
petroleum marketing and distribution. The Company has chosen the
aforementioned companies as its Peer Group because a substantial segment of
each of their businesses is petroleum marketing and distribution.
The Stock Performance Graph shall 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 shall not otherwise be deemed filed under such
Acts.
There can be no assurance that the Company's stock performance will
continue into 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.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors on March 23, 1995 appointed the firm of Coopers
& Lybrand, 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 ended January 31, 1996 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.
Representatives of the firm of Coopers & Lybrand, 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 Coopers & Lybrand as the Company's independent public
auditors for the fiscal year ended January 31, 1996.
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, Getty'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 Getty. Based solely
on its review of Forms 3 and 4 and amendments thereto received by it during
fiscal 1995, Forms 5 and amendments thereto received by it with respect to
fiscal 1995, Getty believes that during fiscal 1995 all of its executive
officers and directors complied with the Section 16(a) requirements, except
that on two occasions, Forms 4 were filed late for Mr. Liebowitz due to
calendaring errors.
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, it is intended that votes will be
cast 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 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 28, 1995 By Order of the Board of Directors,
Samuel M. Jones,
Vice President, General Counsel and
Corporate Secretary
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