<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 REALTY CORP.
- --------------------------------------------------------------------------------
(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)(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 (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
[Logo]
Getty Realty Corp.
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 1997
- -------------------------------------------------------------------------------
To the Stockholders of
GETTY REALTY CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Getty
Realty Corp., formerly known as Getty Petroleum Corp. (hereinafter called the
"Company" or "Getty") will be held at 270 Park Avenue, 11th Floor, New York,
New York, on June 19, 1997 at 10:45 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 L.L.P. as
independent auditors for the Company for the fiscal year ended January
31, 1998.
(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, 1997 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,
By: /s/ Randi Young Filip
--------------------------------------
RANDI YOUNG FILIP
Corporate Secretary
Jericho, New York
April 30, 1997
- ------------------------------------------------------------------------------
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 REALTY CORP.
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 Realty Corp.,
formerly known as Getty Petroleum Corp. (hereinafter called the "Company" or
"Getty"), to be voted at the Annual Meeting of Stockholders to be held at 270
Park Avenue, 11th Floor, New York, New York, on June 19, 1997 at 10:45 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, 1997 record date for securities entitled to vote at the
meeting, the Company had outstanding (excluding shares held in Treasury)
12,871,705 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 30, 1997. 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 31, 1997.
THE DISTRIBUTION
On March 21, 1997, the Company completed the spinoff of its petroleum
marketing assets and business to the Company's common stockholders. In
anticipation of the spinoff, the Company transferred such assets and business
to its subsidiary Getty Petroleum Marketing Inc. ("Marketing") on January 31,
1997. On March 21, 1997 (the "Distribution Date"), the Company distributed the
stock of Marketing to Getty common stockholders on a one-for-one basis (the
"Distribution"). In connection with the Distribution, the Company and Marketing
entered into certain lease, service, licensing and tax sharing arrangements.
See "Certain Transactions." On March 31, 1997, the Company changed its name to
Getty Realty Corp. The Company's Board of Directors believes that the
Distribution will enhance stockholder values over the long term by allowing
Realty and Marketing to concentrate on their respective businesses, by
providing each company with greater flexibility in pursuing its independent
business objectives, and by enabling the investment community to analyze more
effectively the investment characteristics, performance and future prospects of
each business, enhancing the likelihood that each will achieve appropriate
market recognition of its value.
2
<PAGE> 4
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:
<TABLE>
<CAPTION>
NAME--AGE OFFICES HELD IN GETTY AND/OR PRINCIPAL
SERVED AS DIRECTOR SINCE OCCUPATIONS FOR PAST FIVE YEARS
- -------------------------------------------------------------------------------
<S> <C>
Milton Cooper--68 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--69 President and Chief Executive Officer (CEO) of Getty.
May 1971 Chairman, Chief Executive Officer, President
and Director of Marketing. Director, President and
Treasurer of CLS General Partnership Corp., the
general partner of Power Test Investors Limited
Partnership.
Philip E. Coviello--54 Partner of Latham & Watkins, an international
June 1996 law firm, for more than 5 years. Latham & Watkins has
performed legal services for the Company for many
years.
Milton Safenowitz--69 Executive Vice President of Getty until his
May 1971 retirement on February 1, 1990. Director of
Marketing. Director, Executive Vice President and
Assistant Secretary of CLS General Partnership Corp.,
the general partner of Power Test Investors Limited
Partnership.
Warren G. Wintrub--63 Retired Partner, former member of the Executive
June 1993 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.
</TABLE>
3
<PAGE> 5
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, Named Executive Officers (as defined below) and all
directors and Executive Officers of the Company as a group beneficially owned
as of January 31, 1997 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.
<TABLE>
<CAPTION>
SHARES OF PERCENT
COMMON STOCK OF CLASS
NAME BENEFICIALLY OWNED (1)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Milton Cooper 1,055,394 (2) 7.79%
Philip E. Coviello 1,500 *
Leo Liebowitz 2,470,920 (3) 18.23%
Milton Safenowitz 2,210,719 (4) 16.31%
Warren G. Wintrub 20,000 *
James R. Craig (5) 87,968 (6) *
John J. Fitteron 170,781 (6) 1.26%
Samuel M. Jones (5) 91,664 (6) *
Alvin A. Smith (5) 191,305 (6) 1.41%
Directors and Executive
Officers as a group (10 persons) 6,378,207 47.06%
</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 10,311 shares held in a partnership of which he is a partner,
2,013 shares held by wife for which beneficial ownership is disclaimed and
160,000 shares held by a charitable foundation.
(3) Includes 166,410 shares held in trust for children, 230,977 shares held
by wife for which beneficial ownership is disclaimed and 30,724 shares
held by a charitable foundation.
(4) Includes 2,034,601 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.
(5) Effective March 21, 1997, resigned as an Executive Officer of Getty.
(6) Gives effect to the vesting of outstanding Getty stock options held by
such individual pursuant to the Change of Control Agreements (as
hereinafter defined).
With the exception of Leo Liebowitz, whose address is care of Getty Realty
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.
4
<PAGE> 6
DIRECTORS' MEETINGS, COMMITTEES AND EXECUTIVE OFFICERS
During the fiscal year ended January 31, 1997, four regular meetings 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), Coviello
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 one time last year. The Committee recommends
candidates to the Board for election as officers. The Committee recommends
nominees for election to the Board and reviews the role, composition and
structure of the Board and its committees. The Committee will consider nominees
recommended by shareholders upon submission in writing to the Secretary 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 twice last year, consists of Messrs. Cooper (Chairman),
Liebowitz and Safenowitz. The Compensation Committee administers Getty's
Incentive Compensation Plan, Supplemental Retirement Plan and the Stock Option
Plans, and reviews the compensation of the directors and officers of Getty.
DIRECTORS' COMPENSATION
Directors receive annual retainer fees of $12,000, and committee and board
meeting fees of $1,000 for each meeting attended. Directors who are employees
of the Company do not receive retainers or board meeting fees. Mr. Wintrub
received a payment of $1,000 in connection with a special assignment for the
Board of Directors.
OTHER EXECUTIVE OFFICERS
Other Executive Officers during fiscal 1997 included John J. Fitteron, age
55, Senior Vice President and Chief Financial Officer of Getty since 1986 and
Treasurer of Getty since 1994; Alvin A. Smith, age 59, Senior Vice President of
Getty since 1985 and Chief Operating Officer of Getty since 1994; James R.
Craig, age 45, Vice President of Getty since 1987; Michael K. Hantman, age 45,
Vice President of Getty since 1991 and Corporate Controller of Getty since
1985; and Samuel M. Jones, age 60, Vice President and General Counsel of Getty
since 1986 and Corporate Secretary of Getty since 1994. Management is not aware
of any family relationships between any of its directors, nominees or Executive
Officers.
Alvin A. Smith, James R. Craig, Michael K. Hantman and Samuel M. Jones
were Executive Officers of Getty during fiscal year 1997, and effective as of
January 31, 1997 in anticipation of the Distribution, became Executive Officers
of Marketing. Upon the completion of the Distribution, on March 21, 1997,
Messrs. Smith, Craig, Hantman and Jones resigned as Executive Officers of
Getty.
5
<PAGE> 7
COMPENSATION
EXECUTIVE COMPENSATION
The following tables provide information about executive compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of the
Chief Executive Officer and each of the other four most highly compensated
Executive Officers of Getty (the "Named Executive Officers") for services in
all capacities to Getty and its subsidiaries during the periods indicated.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
FISCAL YEAR ENDED JANUARY 31 COMPENSATION AWARDS
RESTRICTED
OTHER ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (1) ($) (#) ($) (2)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leo Liebowitz 1997 404,103 123,400 69,843
Director, 1996 404,103 263,000 59,886
President and Chief 1995 387,228 164,500 60,713
Executive Officer
Alvin A. Smith 1997 311,192 205,000 10,000 55,115
Senior Vice 1996 301,192 205,000 15,000 45,373
President and Chief 1995 268,606 99,000 15,000 40,353
Operating Officer
John J. Fitteron 1997 215,775 190,000 20,000 44,954
Senior Vice President, 1996 198,296 190,000 15,000 32,593
Treasurer and Chief 1995 187,849 99,000 15,000 32,043
Financial Officer
Samuel M. Jones 1997 178,156 116,261 10,000 32,949
Vice President, 1996 163,307 115,000 15,000 26,629
General Counsel and 1995 154,646 79,000 10,000 26,616
Corporate Secretary
James R. Craig 1997 158,565 125,000 10,000 31,422
Vice President 1996 145,537 125,000 15,000 24,419
1995 137,843 79,000 10,000 24,260
</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 salary
and bonus for such officer.
6
<PAGE> 8
(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:
<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 1997 $2,373 $ -- $65,246 $2,224
1996 2,388 -- 55,319 2,179
1995 2,394 -- 56,140 2,179
Alvin A. Smith 1997 2,373 4,750 43,552 4,440
1996 2,388 4,620 34,410 3,955
1995 2,394 4,620 29,859 3,480
John J. Fitteron 1997 2,373 4,750 33,871 3,960
1996 2,388 4,620 23,011 2,574
1995 2,394 4,620 22,579 2,450
Samuel M. Jones 1997 2,373 4,750 22,599 3,227
1996 2,388 4,629 17,499 2,113
1995 2,394 4,611 17,507 2,104
James R. Craig 1997 2,373 3,595 22,489 2,965
1996 2,388 3,486 16,668 1,877
1995 2,394 3,478 16,546 1,842
</TABLE>
In December 1994, the Company entered into agreements (collectively, the
"Change of Control Agreements") with its non-director officers and certain key
employees, wherein the Company agreed to make certain payments under certain
circumstances upon a "change of control" of the Company. Under such
circumstances, the Company also agreed that all Getty stock options granted to
such officer or key employee would immediately vest, and made provision to
allow such individual to exercise his or her options within three years of the
"change of control" for the officers, and a shorter period for key employees,
and to preserve the economic value of his or her options. In March 1996, the
Company amended the Change of Control Agreements to treat a spinoff or similar
transaction involving a substantial portion of the Company'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 the
Distribution Date. The Company intends to pay those officers and key employees
who remained employees of the Company at the Distribution Date, compensation at
least comparable to that which they were paid prior to the Distribution.
Marketing has advised the Company that it intends to pay those officers and key
employees who become employees of Marketing compensation at least comparable to
the compensation which the Company paid them prior to the Distribution. In the
event that the Company or Marketing, as the case may be, does not pay
comparable compensation to any such individual or any such individual does not
become an employee of either Getty or Marketing (or ceases to be an employee of
Getty or Marketing for any reason other than for cause) after the Distribution
Date, then for the 36-month period after the Distribution Date for officers,
and a shorter period of time for those certain key employees, Getty will pay to
each such individual over the applicable period an amount not less than the
average annual sum of such individual's (i) base salary, (ii) benefits under
any incentive or bonus plan and (iii) the 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
requisite period prior to the "change of control". 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, such officer or key employee
receives from the Company, Marketing or any other employer during the covered
period.
7
<PAGE> 9
STOCK OPTIONS
The following table sets forth as to the Named Executive Officers
additional information with respect to the stock options granted during the
fiscal year ended January 31, 1997, including the potential realizable value
from the stock options assuming they are exercised at the end of the option
term and assuming 5% and 10% annual rates of stock price appreciation during
the option term.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
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 (#) 1-31-97 ($/SHARE) (2) DATE (3) 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Leo Liebowitz -- -- -- -- -- --
Alvin A. Smith 10,000 9.86% 14.75 12/13/06 92,762 235,077
John J. Fitteron 20,000 19.72% 14.75 12/13/06 185,524 470,154
Samuel M. Jones 10,000 9.86% 14.75 12/13/06 92,762 235,077
James R. Craig 10,000 9.86% 14.75 12/13/06 92,762 235,077
</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
Getty Common Stock appreciates, the value of Getty Common Stock held by
the stockholders will also increase. For example, the market value of
Getty Common Stock on January 31, 1997 was approximately $225,363,000,
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,
2007 of the same number of shares would be approximately $367,093,000. If
the price of Getty's Common Stock increases by 10% per year, the market
value on January 31, 2007 would be approximately $584,534,000.
(2) In connection with the Distribution, each Getty option was reformed into
separate options for Getty Common Stock and Marketing Common Stock. The
exercise price of each reformed Getty option is 77.29% of the original
option exercise price, i.e., $11.40 per share.
(3) Pursuant to the Change in Control Agreements, all option grants in fact
expire three years after the Distribution Date, i.e., March 21, 2000.
8
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table provides information as to options exercised by each
of the Named Executive Officers of Getty during the fiscal year ended January
31, 1997 and the value of options held by such officers at year end measured in
terms of the closing price of Getty Common Stock on January 31, 1997. No
options were exercised by the Named Executive Officers in the fiscal year ended
January 31, 1997, and accordingly no shares were acquired or value realized
upon the exercise of options.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARs
OPTIONS AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE (1) UNEXERCISABLE (1)
- --------------------------------------------------------------------------------
<S> <C> <C>
Leo Liebowitz -- --
-- --
Alvin A. Smith 158,173 792,236
30,000 130,937
John J. Fitteron 130,031 587,925
40,000 160,937
Samuel M. Jones 60,651 282,241
27,500 113,750
James R.Craig 60,134 283,808
27,500 113,750
</TABLE>
- ----------------------------------
(1) Pursuant to the Change in Control Agreements, all unexercisable options
held by the Named Executive Officers became exercisable on the
Distribution Date.
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 "Compensation Committee"), who are not eligible to
participate in the Stock Option Plans while serving on the Compensation
Committee. No further grants may be made under the 1985 Stock Option Plan and
no SARs are outstanding. 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 750,000 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 Compensation 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 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 extend more than 10 years
following its grant.
9
<PAGE> 11
The number of remaining shares available for grant under the 1988 and 1991
Stock Option Plans are 19,981 and 156,900, 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.
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, 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 trustee
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.
Pursuant to a long-standing arrangement, in the event of the death of Mr.
Liebowitz, benefits in an amount equal to twelve months' salary will be paid to
his estate. In the event of termination of Mr. Liebowitz's employment due to
illness or incapacity for a period of one year or longer, benefits equal to
twenty-four months' salary will be payable to Mr. Liebowitz.
Mr. Liebowitz receives an annual pension of $3,500 from a subsidiary's
defined benefit retirement plan which was terminated effective October 1, 1985.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As previously noted, the current members of the Compensation 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, Liebowitz and Safenowitz are also the principal
stockholders of Marketing, with Messrs. Liebowitz and Safenowitz serving as
directors of Marketing. Mr. Liebowitz serves as Chief Executive Officer of
Marketing and is a member of the Nominating Committee and the Compensation
Committee of the board of directors of Marketing. The Company has certain
lease, service, licensing and tax sharing arrangements with Marketing. In
addition, Messrs. Cooper, Safenowitz and Liebowitz are also directors and the
principal stockholders of CLS General Partnership Corp., the general partner of
Power Test Realty Company Limited Partnership, with which the Company has
certain lease arrangements. See "Certain Transactions."
10
<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 1997. The Compensation and Stock Option Committee (the
"Compensation Committee") is responsible for setting and administering the
policies which govern the Incentive Compensation Plan, the Retirement Plan, the
Supplemental Retirement Plan, the Stock Option Plans and base salary
compensation and for determining amounts payable thereunder.
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, is discussed, reviewed
and approved by the full Board, as is the compensation of the Chief Executive
Officer. 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.
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 Compensation 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 Compensation
Committee froze the base salary component of the Chief Executive Officer and
other Executive Officers. Upon the recommendation of the consultants, the
freeze was lifted in June 1993. In December 1996, consistent with the practice
of the prior few years, all Executive Officers received a small increase in
base salary except that Mr. Liebowitz's base salary was not increased.
ANNUAL INCENTIVE AWARDS
Annual Incentive Awards are provided under the Getty 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 Compensation Committee determined that the incentive compensation of
the Chief Executive Officer and other Executive Officers (shown under the
caption "Bonuses" in the Summary Compensation Table) should be 46.92% of the
maximum amount each Executive Officer could have received under the ICP for the
fiscal year ended January 31, 1997. In addition thereto, pursuant to the Change
in Control Agreements the Executive Officers, except for Mr. Liebowitz,
received an additional amount so that their total bonus would not be less than
the maximum award they could have received under the ICP which was in effect
for the previous fiscal year.
STOCK OPTIONS
Stock options are granted to encourage and facilitate personal stock
ownership by the directors, executives and certain other key employees and thus
strengthen their personal commitment to Getty and provide a longer term
perspective to their managerial responsibilities. The stock option portion of
the Compensation Program directly links the executive's interests with those of
the stockholders. The Compensation Committee's policy is to grant stock option
awards based on individual performance and the potential to contribute to the
future success of the Company. In December 1996 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 Plans.
11
<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 interest through
varied plans that are structured to coincide with the long term vision of
Getty.
During 1993, the Internal Revenue Code was amended to add Section 162(m)
denying 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 one taxable 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 some future 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 one taxable year.
The report of the Compensation 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 30, 1997 Compensation and Stock Option Committee:
Milton Cooper (Chairman)
Leo Liebowitz
Milton Safenowitz
CERTAIN TRANSACTIONS
POWER TEST INVESTORS LIMITED PARTNERSHIP
In 1985, Power Test Investors Limited Partnership (the "Partnership") was
formed as a public master limited partnership and capitalized by a rights
offering to all Getty stockholders. The Partnership is the limited partner in
Power Test Realty Company Limited Partnership (the "Operating Partnership"),
which was also formed in 1985 and which purchased the Northeast and
Mid-Atlantic petroleum marketing assets of Getty Oil Company from Texaco Inc.
The operating Partnership leased these assets to Getty on a long-term net lease
basis.
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. As of January 31, 1997, the Principal
Holders beneficially owned an aggregate of 3,104,431 (48%) of the general and
limited partnership interests in the Partnership.
During fiscal 1997, the Company made net lease payments to the Operating
Partnership of approximately $10,061,000 and an additional sum of $580,470 was
paid to the Operating Partnership by Getty for properties purchased. The
Company received payments of $672,000 from the Operating Partnership for
services performed by the Company (including the provision of office space and
related services) during fiscal 1997.
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.
12
<PAGE> 14
GETTY PETROLEUM MARKETING INC.
As a result of the Distribution, Messrs. Liebowitz, Safenowitz and Cooper
each beneficially owns approximately the same percentage of the outstanding
common stock of Marketing as he owns of the Company's common stock, without
giving effect to the issuance of 5% of Marketing's common stock to an Employee
Stock Ownership Plan. See "Beneficial Ownership of Common Stock." Messrs.
Liebowitz and Safenowitz serve as directors of Marketing, and Mr. Liebowitz
serves as Marketing's Chief Executive Officer.
In connection with the Distribution, the Company and Marketing 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 (including those properties leased by
the Company from the Operating Partnership). 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 from third parties other than the
Operating Partnership), and generally provides Marketing 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 Marketing 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 such property, assuming certain
environmental conditions for which the Company is responsible. The Company
anticipates that it will receive, on an annual basis, net lease payments from
Marketing aggregating approximately $57 million commencing in the fiscal year
beginning February 1, 1997.
The Company and Marketing also entered into a Services Agreement (the
"Services Agreement"), under which the Company will receive certain
administrative and technical services from Marketing and will provide certain
limited services to Marketing. The term of the Services Agreement is two years,
except that it may be earlier terminated in whole or in part by either party
upon 120 days' notice. The net fees estimated to be paid by the Company to
Marketing under the Services Agreement will initially be approximately $80,000
per month and will decline as the services performed decrease. The Company
presently expects that most of such services will be provided by Marketing for
approximately one year.
In addition, the Company and Marketing entered into a Trademark License
Agreement providing for an exclusive, royalty-free license to Marketing of
certain Getty trademarks, service marks and trade names (including the name
"Getty") used in connection with Marketing'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 prior thereto, the license will become
non-exclusive and Marketing will pay to the Company certain customary signage
rental and royalty fees.
In connection with the Distribution, the Company and Marketing also
entered into a Tax Sharing Agreement that defined 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 the
Distribution and with respect to certain tax attributes of the Company after
the Distribution.
13
<PAGE> 15
STOCK PERFORMANCE GRAPH
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
GETTY (GTY), S&P 500, PEER GROUP
(Performance results through 1/31/97)
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, 1997.
[LINE GRAPH]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GTY $100.00 $ 67.97 $108.42 $ 75.25 $ 86.15 $116.36
S&P 500 $100.00 $110.75 $125.31 $126.03 $170.76 $216.15
Peer Group $100.00 $ 89.66 $127.23 $111.63 $132.05 $153.41
</TABLE>
Assumes $100 invested at the close of trading 1/31/92 in Getty common stock,
Standard & Poor's 500, and Peer Group.
*Cumulative total return assumes reinvestment of dividends.
The Company has chosen, as its Peer Group, the following companies:
Ashland Oil, Repsol S.A., Sun Company, Total Petroleum, E-Z Serve Corporation
and FFP Partners, L.P. Diamond Shamrock, Inc. and Horsham Corp. were removed
from the Company's Peer Group because each company was involved in a
significant corporate transaction which made the resulting company no longer
comparable for purposes of the Peer Group and in lieu thereof E-Z Serve
Corporation and FFP Partners, L.P. were added to the Company's Peer Group. The
results for the peer group in the 1996 Proxy Statement are not materially
different from those shown above for the Peer Group. 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.
14
<PAGE> 16
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Pursuant to the direction of the Board of Directors, on April 28, 1997 the
Audit Committee appointed the firm of Coopers & Lybrand 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, 1998 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 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 Coopers & Lybrand L.L.P. as the Company's independent public
auditors for the fiscal year ending January 31, 1998.
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 on its review of Forms
3 and 4 received by it during fiscal 1997 and of Form 5 received by it with
respect to fiscal 1997, Getty believes that during fiscal 1997 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, 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 30, 1997 By Order of the Board of Directors,
By: /s/ Randi Young Filip
--------------------------------------
Randi Young Filip
Corporate Secretary
15
<PAGE> 17
GETTY REALTY CORP.
125 JERICHO TPKE., JERICHO, N. Y. 11753
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Getty Realty Corp. hereby constitutes and
appoints LEO LIEBOWITZ and MILTON SAFENOWITZ, 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 19, 1997 and at any
adjournments thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
A[X] Please mark your
votes as in this
example.
WITHHOLD AUTHORITY Instructions: To withhold authority to vote for any individual
to vote for all nominees nominee, strike a line through the nominee's name in the list below.
FOR listed at right Nominees: M. Cooper
1. ELECTION OF [ ] [ ] P. Coviello
DIRECTORS L. Liebowitz
M. Safenowitz
FOR all nominees listed W. Wintrub
(except as marked to the contrary below)
FOR AGAINST ABSTAIN
2. The ratification of the appointment of [ ] [ ] [ ]
Coopers & Lybrand L.L.P. as independent
- ------------------------------------------- auditors for the Company for the fiscal year
ended January 31, 1998.
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, 1997.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this
proxy will be voted "FOR" Items 1, 2 and 3.
Please mark, sign, date and return the proxy card promptly using the
enclosed envelope.
SIGNATURE DATE SIGNATURE DATE
--------------------------------- ------------ --------------------------------- ------------
NOTE: Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
</TABLE>
