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Section 1: DEF 14A (DEF 14A)

DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒                              Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-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):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:

 

 

     

  2)  

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  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:

 

     

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Form, Schedule or Registration Statement No.:

 

     

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SEC 1913 (02-02)  

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

 

 


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GETTY REALTY CORP.

TWO JERICHO PLAZA, WING C, SUITE 110, JERICHO, NEW YORK 11753

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 30, 2019

To the Stockholders of GETTY REALTY CORP.:

NOTICE IS HEREBY GIVEN that the 2019 Annual Meeting of Stockholders (the “Annual Meeting”) of Getty Realty Corp., a Maryland corporation (the “Company”), will be held at the offices of Arent Fox LLP, 1301 Avenue of the Americas, New York, NY 10019 on April 30, 2019 at 3:30 p.m., for the following purposes:

 

  (1)

to elect a Board of seven directors to hold office until our 2020 annual meeting and until their successors are elected and qualified;

 

  (2)

to hold an advisory vote to approve named executive officer compensation; and

 

  (3)

to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2019.

We will also transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

The Proxy Statement accompanying this Notice more fully describes the proposals to be voted on at the Annual Meeting.

Only stockholders of record at the close of business on March 6, 2019 are entitled to notice of and to vote at this meeting or any adjournments or postponements thereof.

On or about March 15, 2019, for the holders of record and beneficial owners of our common stock as of the close of business on the record date, we will either send (i) a copy of our Proxy Statement, including this Notice of Annual Meeting, the accompanying proxy card and our Annual Report or (ii) a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”). The Notice of Internet Availability instructs you how to access and review this Proxy Statement and our Annual Report beginning on March 15, 2019. The Notice of Internet Availability also instructs you how you may submit your proxy over the internet.

 

        By Order of the Board of Directors,  
        /s/ Joshua Dicker  
        Joshua Dicker  
  Jericho, New York       Executive Vice President, General Counsel and  
  March 12, 2019       Secretary  

 

 


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WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE READ THE PROXY STATEMENT AND COMPLETE A PROXY FOR YOUR SHARES AS SOON AS POSSIBLE. YOU MAY VIA THE INTERNET AUTHORIZE A PROXY HOLDER TO VOTE YOUR SHARES BY FOLLOWING THE INSTRUCTIONS ON THE WEBSITE INDICATED IN THE NOTICE MAILED TO YOU REGARDING THE AVAILABILITY OF PROXY MATERIALS. IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, NOMINEE OR OTHER INSTITUTION, YOU SHOULD PROVIDE INSTRUCTIONS TO YOUR BROKER, BANK, NOMINEE OR OTHER INSTITUTION ON HOW TO VOTE YOUR SHARES. YOU MAY ALSO REQUEST A PAPER PROXY CARD TO SUBMIT YOUR VOTE BY MAIL. IF YOU ATTEND THE MEETING AND VOTE IN PERSON, THAT VOTE WILL REVOKE ANY PROXY YOU MAY HAVE PREVIOUSLY SUBMITTED. IF YOU HOLD SHARES IN THE NAME OF A BROKERAGE FIRM, BANK, NOMINEE OR OTHER INSTITUTION, THEN, IN ORDER TO VOTE YOUR SHARES AT THE MEETING, YOU MUST PROVIDE A LEGAL PROXY FROM THAT INSTITUTION.

YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN.


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    Page  

GETTY REALTY CORP. PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

    1  

Record Date, Voting Rights, Outstanding Shares and Quorum

    1  

Voting Requirements

    1  

Vote Required

    1  

Broker Non-Votes

    2  

Solicitation of Proxies

    2  

Notice Regarding the Availability of Proxy Materials

    2  

PROPOSAL NO. 1 ELECTION OF DIRECTORS (Item No. 1 on the Proxy Card)

    4  

Nominees for Election at the Annual Meeting

    4  

CORPORATE GOVERNANCE AND RELATED MATTERS

    8  

Board of Directors and Board Leadership Structure

    8  

Role of Board of Directors in Risk Oversight

    9  

Independence of Directors

    9  

Directors’ Meetings

    10  

Committees

    10  

Contacting the Board of Directors

    14  

Executive Officers

    14  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF SHARES

    15  

EXECUTIVE COMPENSATION

    17  

Compensation Discussion and Analysis

    17  

2018 Company Performance Highlights

    17  

Base Salary

    20  

Incentive Compensation

    21  

Retirement Plans

    22  

Anti-Hedging and Anti-Pledging Policy

    22  

Compensation Committee Report

    23  

Summary Compensation Table

    24  

2018 Compensation Disclosure Ratio of the Median Annual Total Compensation of All Company Employees to the Annual Total Compensation of the Company’s Chief Executive Officer

    25  

2018 Grants of Plan Based Awards

    25  

2018 Option Exercises and Stock Vested

    27  

Nonqualified Deferred Compensation

    28  

Potential Payments upon Termination or Change in Control

    28  

Equity Compensation Plans

    30  

Director Compensation

    30  

Compensation Committee Interlocks and Insider Participation

    31  
PROPOSAL NO. 2 ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY) (Item No. 2 on the Proxy Card)     32  

Background

    32  

REPORT OF THE AUDIT COMMITTEE

    33  

Oversight Responsibilities

    33  

Independence/Qualifications

    33  

Sarbanes-Oxley Act Compliance

    33  

Financial Statements

    33  

 

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PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Item No. 3 on the Proxy Card)      35  
DEADLINES FOR SUBMITTING STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING      36  

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     36  

OTHER MATTERS

     36  

 

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GETTY REALTY CORP.

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is furnished in connection with the solicitation of proxies by and on behalf of the Board of Directors of Getty Realty Corp. (hereinafter called the “Company” or “Getty”), to be voted at the Company’s Annual Meeting to be held at the offices of Arent Fox LLP, 1301 Avenue of the Americas, New York, NY 10019 on April 30, 2019 at 3:30 p.m., and at any adjournments or postponements thereof (the “Annual Meeting”), for the purposes of (1) electing a Board of Directors; (2) holding an advisory vote to approve named executive officer compensation; and (3) ratifying the appointment of independent auditors. We will also transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Record Date, Voting Rights, Outstanding Shares and Quorum

At the close of business on March 6, 2019, the record date for stockholders entitled to vote at the Annual Meeting, there were 40,866,854 shares of Getty common stock outstanding. Each outstanding share of common stock is entitled to one vote. The common shares vote as a single class. In order to constitute a quorum at the Annual Meeting, there must be present, or voting by proxy, holders of a majority of the outstanding common stock.

Under Maryland law, shares represented by proxies that reflect abstentions or “broker non-votes” (i.e., shares held by a broker or nominee which are represented at the Annual Meeting, but with respect to which such broker or nominee is not empowered by the beneficial owner of the stock to vote on a particular proposal) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

Voting Requirements

If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record on how to vote your shares. You must follow the instructions of the holder of record in order for your shares to be voted. If your shares are not registered in your own name and you plan to vote your shares in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it with you to the Annual Meeting in order to vote.

All valid proxies received before the Annual Meeting will be exercised. All shares represented by a proxy will be voted, and where a proxy specifies a stockholder’s choice with respect to any matter to be acted upon, the shares will be voted in accordance with that specification. If no choice is indicated on the proxy with respect to any one or more of the proposals, the shares will be voted in favor of such proposal(s). At the discretion of the persons named in the enclosed proxy card or vote instruction form, such proxy holder may also vote on any other matter that may properly come before the Annual Meeting or any adjournments or postponements thereof.

Vote Required

If a quorum is achieved at the Annual Meeting, the following voting requirements will apply:

 

  1.

Board Elections. The affirmative vote of a plurality of all votes cast at the Annual Meeting is required for the election of each nominee to our Board of Directors. With respect to each director nominee, you may vote “for” such nominee or “withhold” your vote as to such nominee. Director nominees with the most votes cast “for” such nominee’s election will be elected to our Board of Directors.

 

   

For purposes of the election of directors, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote.

 

  2.

Advisory vote to approve named executive officer compensation. The affirmative vote of a majority of the votes cast at the Annual Meeting will be necessary to approve the advisory vote on executive compensation.

 

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For purposes of the advisory vote to approve the named executive officer compensation, abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of this proposal.

 

  3.

Ratify the appointment of PricewaterhouseCoopers LLP. The affirmative vote of a majority of the votes cast at the Annual Meeting will be necessary to ratify the appointment of the independent registered public accounting firm.

 

   

For purposes of the appointment of PricewaterhouseCoopers LLP, abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of this proposal.

Broker Non-Votes

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank or other nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker, bank or other nominee can still vote the shares with respect to matters that are considered to be “routine,” but cannot vote the shares with respect to “non-routine” matters. With respect to the three proposals set forth in this Proxy Statement, only Proposal 3 – Ratification of the Appointment of PricewaterhouseCoopers LLP – is considered to be “routine” and brokers, banks or other nominees generally have discretionary voting power with respect to such proposal. We encourage you to provide instructions to your broker regarding the voting of your shares. See “Vote Required” section above for the treatment of broker non-votes with respect to each of the three proposals.

If you vote by proxy, the individuals named on the proxy card (your “proxies” or “proxy holders”) will vote your shares in the manner you indicate.

Solicitation of Proxies

We will bear the cost of soliciting proxies. In addition to soliciting stockholders by mail through our employees, we will request banks, brokers and other custodians, nominees and fiduciaries to solicit customers for whom they hold our stock and we will reimburse them for their reasonable, out-of-pocket costs. We may also use the services of our officers, directors and others to solicit proxies personally or by telephone, without additional compensation.

Notice Regarding the Availability of Proxy Materials

From the date of mailing of the Notice of Internet Availability through the conclusion of the Annual Meeting, stockholders will be able to access all of the proxy materials on the internet at www.proxyvote.com. The proxy materials will be available free of charge. The Notice of Internet Availability will instruct you as to how you may access and review all of the important information contained in the proxy materials (including our Annual Report to stockholders) over the internet or through other methods specified at the website designated in the Notice of Internet Availability. The designated website contains instructions as to how to vote your shares over the internet or by telephone. The Notice of Internet Availability also instructs you as to how you may request a paper or email copy of the proxy card. If you received a Notice of Internet Availability and would like to receive a printed copy of the proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.

The rules and regulations adopted by the Securities and Exchange Commission (the “SEC”) permit us to deliver a single Notice of Internet Availability or set of Annual Meeting materials to one address shared by two or more of our stockholders. We have delivered only one copy of the Notice of Internet Availability or set of Annual Meeting materials to multiple stockholders who share the same address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We will promptly deliver, upon written or oral request, a separate copy of the Notice of Internet Availability or set of Annual Meeting materials to any stockholder at the shared address

 

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to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Notice of Internet Availability or sets of Annual Meeting materials, contact Broadridge Financial Solutions, Inc. at 1-800-542-1061, or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future Notices of Internet Availability or set of Annual Meeting materials for your household, please contact Broadridge at the above phone number or address.

The Notice of Internet Availability or Annual Meeting materials will be sent to stockholders on, and will be available on the internet on or about, March 15, 2019.

 

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

(Item No.  1 on the Proxy Card)

Nominees for Election at the Annual Meeting

Getty’s directors are elected at each annual meeting of stockholders and hold office for a term of one year and until their respective successors are elected and qualified. The Board of Directors has nominated seven candidates for election as directors for a one-year term ending at the 2020 annual meeting of the Company’s stockholders or when their successors are duly elected and qualified.

The affirmative vote of a plurality of all votes cast at the Annual Meeting is required for the election of each nominee to our Board of Directors. With respect to each director nominee, you may vote “for” such nominee or “withhold” your vote as to such nominee. Director nominees with the most votes cast “for” such nominee’s election will be elected to our Board of Directors. For purposes of the election of directors, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote.

You may use the proxy card furnished to you to cast your votes for the election of the director nominees named in the table below. In the event that any of the nominees should become unable or unwilling to serve as a director prior to the 2019 Annual Meeting, we intend to vote your proxy “for” the election of the substitute nominee, if any, who is designated by the Board of Directors. For additional information about how we identify and evaluate nominees for director, see “Committees – Nominating/Corporate Governance Committee” at page 11 of this Proxy Statement.

Set forth below is information regarding the directors nominated for election at the Annual Meeting, including background information and information regarding the specific experience, qualifications, attributes and skills that support the conclusion that these nominees should serve as directors of Getty.

 

  Name and Age   Information Regarding Nominees
  Leo Liebowitz – 91  

Mr. Liebowitz has served as Chairman of the Board of Getty since 1971 and served as the Chief Executive Officer of Getty from 1985 until 2010. Mr. Liebowitz served as President of Getty from 1971 until 2004. In 1955, Mr. Liebowitz co-founded the predecessor business that became our Company, and he is our largest individual stockholder.

 

Mr. Liebowitz also served as Chairman, Chief Executive Officer and a director of Getty Petroleum Marketing Inc. from 1996 until 2000, and as a director of the Regional Banking Advisory Board of JPMorgan Chase & Co. from 1975 to 2013.

 

As our co-founder and one of our largest stockholders since the Company’s inception, Mr. Liebowitz possesses a deep understanding and appreciation of all aspects of Getty, its history and its business. He is highly qualified to serve on and lead our Board.

  Milton Cooper – 90  

Mr. Cooper has served as a director of Getty since 1971 and as Chairman of the Compensation Committee since 2006. He also has served as a member of the Nominating/Corporate Governance Committee since before 1993.

 

Mr. Cooper is the Executive Chairman of the Board of Directors for Kimco Realty Corporation (“Kimco”), a New York Stock Exchange listed real estate investment trust, which is one of the nation’s largest owners and operators of neighborhood and community shopping centers. Mr. Cooper has served as the Chairman of the Board of

 

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  Name and Age   Information Regarding Nominees
 

Directors and Chief Executive Officer of Kimco from its initial public offering in 1991 to 2009, and was a director and President of Kimco prior thereto. In 1956, Mr. Cooper co-founded the predecessor business that became Kimco.

 

Mr. Cooper is a nationally recognized leader of the modern REIT industry. He has received the National Association of Real Estate Investment Trusts Industry Leadership Award for his significant and lasting contribution to the REIT industry. From 1983 through April 2012, he was also a director of Blue Ridge Real Estate/Big Boulder Corporation, a real estate management and land development firm. Mr. Cooper has also served as a member of the Executive Committee of the Board of Governors of the National Association of Real Estate Investment Trusts.

 

Along with Mr. Liebowitz, Mr. Cooper is the longest-serving member of our Board, and also one of our largest individual stockholders. Mr. Cooper is a trusted advisor and highly qualified for our Board.

  Philip E. Coviello – 76  

Mr. Coviello has served as a director of Getty since 1996 and as Chairman of the Audit Committee since 2000. Mr. Coviello also has served on the Compensation Committee since 2007 and on the Nominating/Corporate Governance Committee since 1999.

 

Mr. Coviello has served as a director of Kimco since 2008, serves as Chairman of Kimco’s Audit Committee, and also serves on Kimco’s Executive Compensation Committee and Nominating/Corporate Governance Committee. Mr. Coviello was a partner in Latham & Watkins LLP, an international law firm, until his retirement from the firm as of December 31, 2003.

 

Mr. Coviello’s qualifications to serve on our Board include his many years of legal experience counseling Boards of Directors and senior management of public and private companies on a wide range of corporate and securities law issues, including mergers and acquisitions, securities offerings and corporate governance, regulatory compliance and other matters.

  Christopher J. Constant – 40  

Mr. Constant has served as a director of Getty since January 1, 2016, concurrent with his appointment as President and Chief Executive Officer of the Company effective at that time. Mr. Constant joined the Company in November 2010 as Director of Planning and Corporate Development and advanced within the Company to Treasurer in May 2012, Vice President in May 2013, Chief Financial Officer in December 2013, and President and Chief Executive Officer as of January 1, 2016.

 

Prior to joining Getty, Mr. Constant was a Vice President in the corporate finance department of Morgan Joseph & Co. Inc. and began his career in the corporate finance department at ING Barings.

 

Mr. Constant’s qualifications to serve on our Board include his past experience in investment banking, totaling over ten years, including his past leadership role as Vice President in the investment banking firm

 

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  Name and Age   Information Regarding Nominees
 

Morgan Joseph & Co. Inc., and his diverse knowledge of financial and capital markets and corporate development strategies, specifically as they relate to the real estate industry and REITs. In addition, Mr. Constant has gained extensive knowledge of the Company’s business strategies, finances and operations in various executive capacities with the Company since 2010, and has been a driving force behind the execution of numerous specialized and strategic projects during his tenure. His knowledge of our business, finances, operations and compliance requirements, and his demonstrated effective leadership within the Company, qualify Mr. Constant as a valuable member of our Board of Directors.

  Mary Lou Malanoski – 62  

Ms. Malanoski was appointed to serve as a director of Getty in October 2018 to fill a vacancy created by the expansion of our Board from six to seven directors. Immediately subsequent to such appointment, the Board appointed Ms. Malanoski to the Audit Committee.

 

Ms. Malanoski is currently Chief Financial Officer of Colony S2K Holdings. Previously, she was the Chief Operating Officer at Morgan Joseph TriArtisan, an investment bank focused on the mid-market, where she also had served as Head of Banking and Chief Financial Officer. Prior to Morgan Joseph TriArtisan, she was a founder and principal of New Street Advisors, a boutique broker-dealer, and New Street Investments, a firm focused primarily on non-control investments in private companies. Prior to New Street Advisors, she was a senior team member at New Street Capital, a private investment firm which managed the assets of the reorganized Drexel Burnham Lambert. Ms. Malanoski began her career as an investment banker at Drexel Burnham Lambert. She also is a member of the Board of Directors for Phibro Animal Health Corporation and Morgan Joseph TriArtisan.

 

Ms. Malanoski’s qualifications to serve on our Board include her over 30 years of experience on Wall Street in various roles. Ms. Malanoski is an accomplished leader and an experienced board member who brings a unique and independent perspective to our Board.

  Richard E. Montag – 86  

Mr. Montag has served as a director of Getty since 2010. He also has served as a member of the Compensation Committee since 2010 and as a member of the Audit Committee since 2010.

 

He was a director of FNC Realty Corporation (f/k/a Frank’s Nursery & Crafts, Inc.) from 2004 until 2005; Enterprise Asset Management, Inc. from 2003 until 2004; Hills Stores Company from 1997 to 1998, and Getty Petroleum Marketing Inc. from 1996 until 2000. From 1982 until 1998, Mr. Montag was the Vice President of Real Estate Development for The Richard E. Jacobs Group, Inc.

 

Mr. Montag’s qualifications to serve on our Board include his demonstrated leadership and management experience and strong understanding of public company governance and operations through his prior service on three public company boards. Mr. Montag also possesses experience as a director of Getty Petroleum Marketing Inc. from October 1996 until December 2000 and as a senior executive in the real estate industry, including his prior position as Vice President with The Richard E. Jacob Group, Inc., one of the nation’s most

 

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  Name and Age   Information Regarding Nominees
 

established and respected owners, developers, and managers of commercial real estate.

  Howard B. Safenowitz – 60  

Mr. Safenowitz has served as a director of Getty since December 1998 and as Lead Independent Director of Getty since February 2010. He also has served as Chairman of the Nominating/Corporate Governance Committee since 2005. In addition, Mr. Safenowitz has served on the Compensation Committee since 1999 and on the Audit Committee since 2005.

 

Together with attributed family interests, Mr. Safenowitz is also one of the Company’s largest stockholders. Mr. Safenowitz is the President of Safenowitz Family Corp., an investment firm, since 1997. From 1990 to 2003, he was employed by The Walt Disney Company where he served as Senior Vice President, Business Affairs of Buena Vista Motion Pictures from March 2001 until April 2003 and prior thereto as Vice President, Business Affairs of Walt Disney Pictures and Television from 1996 until 2001. Mr. Safenowitz practiced corporate and transactional law in New York and California from 1983 until joining The Walt Disney Company in 1990. He also served as a director of Getty Petroleum Marketing Inc. from December 1998 until December 2000.

 

Mr. Safenowitz’s qualifications to serve on our Board include his significant experience with and knowledge of Getty, along with his prior service as a director of Getty Petroleum Marketing Inc. until December 2000, which together provide him with a valuable perspective on core business matters that face our Company. In addition, his experience as a corporate lawyer, as well as his position as the president of Safenowitz Family Corp. and his past leadership experience at The Walt Disney Company, have provided Mr. Safenowitz demonstrated leadership and management skills contributing to his value as an advisor to our Company.

Recommendation

The Board of Directors unanimously recommends that you vote “for” the election of each nominee for director.

 

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CORPORATE GOVERNANCE AND RELATED MATTERS

Board of Directors and Board Leadership Structure

Our Board of Directors is currently comprised of Christopher J. Constant, Milton Cooper, Philip E. Coviello, Leo Liebowitz, Mary Lou Malanoski, Richard E. Montag, and Howard B. Safenowitz. Our Board is elected by the stockholders to oversee the performance of the Company’s business affairs and to set broad strategy for the Company’s growth. The Board of Directors acts as an advisor to senior management and monitors its performance. It also oversees the Company’s compliance efforts. To help discharge its responsibilities, the Board of Directors has adopted Corporate Governance Guidelines on significant corporate governance issues. The Corporate Governance Guidelines address, among other things, the size and composition of the Board of Directors, director independence, committee membership and structure, meetings and executive sessions, and director selection and training.

The Charters for each of the committees of the Board of Directors, the Corporate Governance Guidelines, and Getty’s Business Conduct Guidelines (which serve as our code of ethics under the Sarbanes-Oxley Act of 2002 and our code of business conduct and ethics under the New York Stock Exchange (“NYSE”) rules, and covers officers, employees and directors), may all be accessed through the Getty website at www.gettyrealty.com by clicking on “Investors/Corporate Governance”. The Board of Directors and the Nominating/Corporate Governance Committee are committed to the needs of the Board and, in evaluating possible director candidates, have historically considered the knowledge and judgment, and breadth of skills, experience and attributes, of a candidate with a goal of identifying the most suitable person based on merit, without regard to gender, race, color, religion or national origin. From time to time, the Board of Directors and the Nominating/Corporate Governance Committee have re-evaluated their policies regarding diversity among the Board of Directors, specifically including gender and racial diversity. In February 2018, the Board of Directors determined to revise the Director Qualification Standards section of the Company’s Corporate Governance Guidelines to reaffirm the potential benefits of diversity among the Board of Directors, by specifically stating that (i) diversity (based on factors commonly associated with diversity such as race, gender, national origin, religion, or sexual orientation or identity, as well as on broader principles such as diversity of perspective and experience) would be one of the elements to be considered in evaluating any particular director candidate, and (ii) in carrying out its duties, the Nominating/Corporate Governance Committee shall be responsible for assessing the appropriate balance of skills and characteristics required of members of the Board of Directors and would actively seek to broaden the diversity composition of the Board of Directors. In furtherance thereof, in the summer of 2018, the Nominating/Corporate Governance Committee sought input from, and solicited recommendations from, management and other members of the Board of Directors regarding possible director nominee candidates. In connection therewith, Mr. Constant reached out to his direct contacts, other REIT executives, senior investment bankers, PricewaterhouseCoopers LLP and the Company’s investor relations firm for suggestions for diverse candidates whose expertise and personal characteristics would align with the Company’s long-term business strategy. After personally interviewing approximately ten recommended candidates, Mr. Constant recommended three candidates from this group to the Nominating/Corporate Governance Committee, each of whom was personally interviewed and evaluated by the Nominating/Corporate Governance Committee. In October 2018, after the Nominating/Corporate Governance Committee considered, among other criteria, Ms. Malanoski’s (i) personal and professional integrity, ethics and values, (ii) educational and professional background, (iii) experience in corporate management, (iv) experience as a board member, (v) “independence,” as defined by the New York Stock Exchange listing standards, (vi) financial literacy and (vii) ability to foster a diversity of backgrounds and views and to compliment the Board’s existing strengths, the Nominating/Corporate Governance Committee recommended to the Board of Directors that it increase the number of authorized directors constituting the Board from six to seven and appoint Ms. Malanoski to fill the vacancy created thereby. In October 2018, in furtherance of the implementation of its revised Corporate Governance Guidelines and its desire to broaden the diversity of its membership, the Board of Directors so acted. (For additional information on this issue, see “Nominating/Corporate Governance Committee” discussion on page 11 of this Proxy Statement.)

In addition to our website availability, copies of any of the Charters for each of the committees of the Board of Directors, the Corporate Governance Guidelines, and/or Getty’s Business Conduct Guidelines may also be obtained by submitting a written request to Mr. Joshua Dicker, Executive Vice President, General Counsel and Secretary, at the address for Getty’s executive offices provided in this Proxy Statement. The Business Conduct Guidelines apply to all employees, officers and directors of the Company and waivers of the Business Conduct Guidelines for directors or

 

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executive officers, if any, will be disclosed as required by the rules and regulations of the SEC. There were no such waivers in 2018.

For the year ended December 31, 2018, our Board of Directors had seven members. The Board of Directors has nominated seven candidates for election as directors for a one-year term ending at the 2020 annual meeting of the Company’s stockholders and when their successors are duly elected and qualified.

The Board does not have a policy regarding the separation of the roles of Chief Executive Officer (“CEO”) and Chairman of the Board, as the Board believes it is in the best interests of the Company for the Board to have the flexibility to make the determination whether the same person should serve as both the CEO and Chairman of the Board at any given point in time, or whether the roles should be separate, depending on, among other factors, the position and direction of the Company and the membership of the Board. The Board believes that its current leadership structure, with separate Chairman and CEO positions, is appropriate for the Company because it separates the leadership of the Board from the day to day leadership of the Company. The Board believes that, in addition to the Lead Independent Director, separating the position of Chairman from the CEO better positions the Board to evaluate the performance of management and enables the Chairman to provide guidance to the CEO.

In his role as Chairman of the Board, Mr. Liebowitz is responsible for enhancing Board effectiveness, in particular by ensuring that the Board works as a cohesive team; ensuring that the Board has adequate resources and that there is a process in place to assure that the Board is presented with full, timely and relevant information; ensuring that there is a process in place to monitor best practices that relate to the responsibilities of the Board; and assessing the effectiveness of the overall Board and individual directors on a regular basis. He is also responsible for Board management, in particular by providing oversight on the agendas for Board meetings; consulting with the CEO regarding the membership and the chairs for Board committees; ensuring that the independent directors meet regularly without management present to discuss the effectiveness of the CEO and the Board; and by chairing Board meetings.

In his role as the CEO, Mr. Constant is responsible for setting a strategic vision for the Company and seeking to align the Company, internally and externally, with that strategic vision. In addition, Mr. Constant, as CEO, is responsible for day to day leadership of the Company, promoting Company performance through his leadership, and leading the Company in the execution of its business plan. Our CEO also serves on our Board, which we believe helps the CEO to serve as a bridge between management and the Board of Directors, ensuring that both groups act with a common purpose. We believe that the CEO’s presence on the Board enhances his ability to provide insight and direction on important strategic initiatives to both management and the independent directors and, at the same time, ensures that the appropriate level of independent oversight is applied to all decisions by the Board.

Role of Board of Directors in Risk Oversight

It is management’s responsibility to assess and manage the various risks the Company faces and the Board’s responsibility to oversee management in this effort. In exercising its oversight, the Board has delegated primary responsibility for risk assessment and risk management oversight to the Audit Committee. Under its Charter, the Audit Committee’s responsibilities include discussing with management the Company’s policies with respect to risk assessment and risk management and the Company’s material financial risk exposures and the actions management has taken to limit, monitor or control such exposures. The Audit Committee receives quarterly reports from management on the Company’s enterprise risk management practices and risk mitigation efforts. The Audit Committee also oversees the Company’s legal and regulatory compliance programs and internal audit function. Our full Board regularly reviews the Company’s strategic plans and objectives, including the risks that may affect the achievement of these strategic plans and objectives.

Independence of Directors

The Board of Directors has determined that Ms. Malanoski and Messrs. Cooper, Coviello, Montag and Safenowitz are “independent” as defined in the listing standards of the NYSE. In making these determinations, the Board of Directors considered all relevant facts and circumstances, including the independence standards set forth in Section 303A.02 of the rules of the NYSE. The Board of Directors affirmatively determined that none of the directors, or any of their respective family members, other than Mr. Liebowitz and Mr. Constant, has had any relationship with Getty (either directly or as a partner, stockholder or officer of an organization that has a relationship with Getty), other

 

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than as a stockholder and director of Getty. Accordingly, the Board of Directors has affirmatively determined that each of the directors, other than Mr. Liebowitz and Mr. Constant, is “independent.”

It has been and will continue to be the practice of the Board of Directors to meet at least quarterly each year and have Mr. Liebowitz, as Chairman, chair such meetings. Additionally, it has been the practice of the independent directors to meet in executive session at least quarterly each year, and to have Mr. Safenowitz, who has served since February 25, 2010 as the Company’s Lead Independent Director, chair such sessions.

Directors’ Meetings

During the year ended December 31, 2018, the Board of Directors held five (5) meetings. Each of the directors nominated for election at the Annual Meeting attended all of the 2018 meetings of the Board of Directors during the period in which he or she was eligible to attend, and all of the 2018 meetings of Committees of the Board on which such director served in 2018. Each of the directors nominated for election at the Annual Meeting also attended the annual meeting of stockholders in May 2018, except for Ms. Malanoski, who was not appointed as a director until October 2018.

Committees

The Board of Directors has an Audit Committee, a Nominating/Corporate Governance Committee and a Compensation Committee, the membership and functions of which are described below.

Audit Committee

The Audit Committee met four (4) times in 2018. The Audit Committee consisted of Messrs. Coviello (Chairman), Montag and Safenowitz and, effective as of her appointment in October 2018, Ms. Malanoski. The Audit Committee selects the independent registered public accounting firm that audits the consolidated financial statements of Getty and its subsidiaries, discusses the scope and the results of the audit with our independent registered public accounting firm, and monitors Getty’s financial accounting and reporting practices. The Audit Committee also examines and discusses the adequacy of Getty’s internal control over financial reporting with the independent registered public accounting firm, our internal auditors, and with management. The Board has designated the Audit Committee to take the lead in overseeing our risk assessment and risk management, along with overseeing compliance with our Business Conduct Guidelines. In addition to regular meetings, at least one Audit Committee member meets telephonically with management and Getty’s independent auditors to review the Company’s quarterly reports and other reports, as appropriate, prior to their full presentation to the Audit Committee and subsequent filing with the SEC. The Audit Committee met with management and Getty’s independent auditors to review the Company’s audited financial statements for the year ended December 31, 2018 and recommended to the Board of Directors that the financial statements be included in the Company’s Annual Report on Form 10-K for such year. See “Role of Board of Directors in Risk Oversight” on page 9 of this Proxy Statement for a discussion of the Audit Committee’s role in risk assessment and risk management oversight. Additionally, the Audit Committee reviews and discusses with management management’s specific disclosures contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Please also see the Audit Committee Report included at page 33 in this Proxy Statement.

The Board of Directors determined that for the year ended December 31, 2018, each member of the Audit Committee (a) was (1) “independent” and (2) “financially literate” as such terms are defined in the listing standards of the NYSE and (b) met the independence tests set forth in Section 301 of the Sarbanes-Oxley Act of 2002 and regulations promulgated thereunder by the SEC. The Board of Directors also determined that for the year ended December 31, 2018, Ms. Malanoski, Mr. Coviello and Mr. Montag each qualified as an “audit committee financial expert” under the relevant rules of the SEC, and that each of Ms. Malanoski, Mr. Coviello and Mr. Montag have the requisite accounting/financial management expertise required by the listing standards of the NYSE.

The Charter of the Audit Committee provides that members of the Audit Committee may not be members of the audit committee of more than two other public companies unless such other memberships have been disclosed to the Board and the Board has determined that such simultaneous service does not impair the ability of such member to

 

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serve effectively on the Audit Committee. None of the Audit Committee members served on the audit committee of more than two other public companies during 2018.

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee met three (3) times in 2018. The Nominating/Corporate Governance Committee consisted of Messrs. Safenowitz (Chairman), Cooper, and Coviello. The Nominating/Corporate Governance Committee recommends nominees for election to the Board and reviews the role, composition and structure of the Board and its committees. As part of this review, the Committee evaluates (i) whether to have a Lead Independent Director, (ii) the responsibilities of the positions of Chairman of the Board and Lead Independent Director, and (iii) the qualifications for those positions, including whether the position of Chairman of the Board of Directors should be held by the Chief Executive Officer, an independent director, or a non-independent director other than the Chief Executive Officer. The Nominating/Corporate Governance Committee also recommends candidates to the Board for election as officers.

For a discussion of the specific experience, qualifications, attributes or skills of the nominees for election to the Board, see the “Nominees for Election at the Annual Meeting” section on page 4 of this Proxy Statement.

Historically, consistent with its Charter, the Nominating/Corporate Governance Committee considered general principles of diversity in the broadest sense (including diversity of skills and perspectives) when identifying director nominees for the Board, however, the Committee did not have a formal policy with regard to the consideration of diversity specifically based on factors such as race, gender, national origin, religion, or sexual orientation or identity, in identifying director nominees. As noted above, in February 2018, the Board of Directors determined to revise the Director Qualification Standards section of the Company’s Corporate Governance Guidelines to reaffirm the potential benefits of diversity among the Board of Directors, by specifically stating that (i) diversity (based on factors commonly associated with diversity such as race, gender, national origin, religion, or sexual orientation or identity, as well as on broader principles such as diversity of perspective and experience) would be one of the elements to be considered in evaluating any particular director candidate, and (ii) in carrying out its duties, the Nominating/Corporate Governance Committee shall be responsible for assessing the appropriate balance of skills and characteristics required of members of the Board of Directors and will actively seek to broaden the diversity composition of the Board of Directors. In addition, at its regular meeting held in February 2018, the Board of Directors unanimously confirmed its intention to expand the Board of Directors by at least one new member after the 2018 annual meeting and prior to the 2019 Annual Meeting, and to seek to appoint a qualified candidate to the newly-created position who can meet the needs of the Board of Directors, including by broadening the diversity composition of the Board of Directors. Throughout the summer and early fall of 2018, the Nominating/Corporate Governance Committee supported the objective of the Board of Directors by conducting a search for qualified candidates consistent with the Company’s Corporate Governance Guidelines for the proposed vacancy. In October 2018, the Nominating/Corporate Governance Committee recommended to the Board that it increase the number of authorized directors constituting the Board from six to seven and nominated Ms. Malanoski for appointment to fill the vacancy created thereby. After due consideration of Ms. Malanoski’s education and experience, the Board of Directors voted to increase the size of the Board from six directors to seven directors and, effective immediately thereafter, appointed Ms. Malanoski to the Board to fill the newly-created directorship.

The Company’s Corporate Governance Guidelines do not include mandatory retirement ages or term limits applicable to directors. The Nominating/Corporate Governance Committee annually reviews the performance and qualifications of each current director and considers the results of such evaluation when determining whether or not to recommend the nomination of such director for an additional term. In addition, although the Nominating/Corporate Governance Committee considers length of service when recommending candidates for re-election, the Board does not believe that adopting a set term limit for directors serves the interests of the Company. Such limits may result in the loss of contributions from directors who have been able to develop, over a period of time, increasing insight into the Company, its operations and its strategic direction. The Nominating/Corporate Governance Committee reviews these policies as part of its annual governance review and will consider modifications to these policies as deemed necessary and in the best interests of the Company and its stockholders.

The Board of Directors has determined that each member of the Nominating/Corporate Governance Committee is “independent” as such term is defined in the listing standards of the NYSE. The Nominating/Corporate

 

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Governance Committee Charter includes policies with regard to stockholder recommendations of nominees to the Board of Directors.

Stockholders wishing to recommend candidates for election to the Board must supply information in writing regarding the candidate to Mr. Joshua Dicker, Executive Vice President, General Counsel and Secretary of the Company, at the Company’s executive offices. This information should include the candidate’s name, biographical data and an analysis of the candidate based on the director candidate criteria described below. The recommendation must also include all information relating to the proposed director nominee that would be required to be disclosed in a solicitation of proxies for election of directors in an election contest under applicable securities law. Stockholders wishing to nominate a candidate must comply with the advance notice requirements in our Bylaws. Please refer to our Bylaws for more specific information. Our Bylaws were publicly filed with the Securities and Exchange Commission (“SEC”) on November 14, 2011, as amended February 26, 2019 and publicly filed with the SEC on February 27, 2019. Additional information regarding any proposed nominees may be requested by the Nominating/Corporate Governance Committee.

Each nominee must possess fundamental qualities of intelligence, honesty, good judgment, and high standards of ethics, integrity, fairness and responsibility. The Nominating/Corporate Governance Committee also will consider the following criteria in addition to other criteria the Committee deems appropriate, including the specific needs of the Board at the time:

 

   

experience in corporate management, such as serving as an officer or former officer of a publicly held company, and a general understanding of marketing, finance and other elements relevant to the success of a publicly traded company in today’s business environment;

 

   

the director’s past attendance at meetings and participation in and contributions to the activities of the Board (if applicable);

 

   

experience in our industry and with relevant social policy concerns;

 

   

understanding of our business on a technical level;

 

   

educational and professional background and/or academic experience in an area of our operations;

 

   

experience as a board member of another publicly held company;

 

   

practical and mature business judgment, including ability to make independent analytical inquiries;

 

   

“independence,” as defined by the NYSE listing standards;

 

   

financial literacy;

 

   

standing in the community;

 

   

diversity based on factors commonly associated with diversity such as race, gender national origin, religion, or sexual orientation or identity, as well as on broader principles such as diversity of perspective and experience; and

 

   

ability to complement the Board’s existing strengths.

In reviewing prospective nominees, the Nominating/Corporate Governance Committee also reviews the number of public company boards on which a director nominee serves to determine if the nominee will have the ability to devote adequate time to the work of the Board of Directors and its committees. The Company’s Corporate Governance Guidelines and the Company’s Audit Committee Charter provide that members of the Audit Committee may not be members of the audit committee of more than two other public companies unless such other memberships

 

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have been disclosed to the Board of Directors and the Board of Directors has determined that such simultaneous service does not impair the ability of such member to effectively serve on the Company’s Audit Committee. In addition, effective February 26, 2019, the Board of Directors revised the Company’s Corporate Governance Guidelines to provide that directors may not serve on more than four other boards of public companies.

On the basis of the information gathered in this process, the Nominating/Corporate Governance Committee will determine which nominees to recommend to the Board. Recommendations and related information received prior to any Nominating/Corporate Governance Committee meeting where director nominees are to be considered will be considered at that meeting. The Nominating/Corporate Governance Committee uses the same process for evaluating all nominees, regardless of the source of the recommendation. This process includes, among other things, personal interviews, discussions with professional references, background checks, credit checks and resume verification.

The Nominating/Corporate Governance Committee has not received any recommendation for a director nominee for the Annual Meeting from any stockholder or group of stockholders.

Compensation Committee

The Compensation Committee met two (2) times in 2018. The Compensation Committee consisted of Messrs. Cooper (Chairman), Coviello, Montag and Safenowitz. The Compensation Committee is responsible for developing and, with the approval of the Board, implementing the compensation plans, policies and programs of the Company and producing an annual report on executive compensation for inclusion in the Company’s proxy materials in accordance with applicable rules and regulations. It is the Compensation Committee’s responsibility to ensure that compensation programs are designed to encourage high performance and promote accountability and assure that employee interests are aligned with the interests of the Company’s stockholders. The Board has determined that each member of the Compensation Committee is “independent” as such term is defined in the listing standards of the NYSE.

The Compensation Committee also administers the Supplemental Retirement Plan for Executives of Getty Realty Corp. and Participating Subsidiaries (the “Supplemental Retirement Plan”) and the Getty Realty Corp. Second Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “2004 Plan”) and reviews, and recommends to the Board for its approval, the compensation of the directors and each of the named executive officers of Getty.

The Compensation Committee’s Charter provides that the Committee may delegate any or all of its responsibilities, except that the Committee may not delegate its responsibilities with respect to:

 

   

its annual review and approval of compensation for officers, directors and certain highly compensated employees;

 

   

its recommendation to the Chairman of the Board of any changes in non-management director compensation;

 

   

its management and annual review of, and responsibilities with respect to, all bonuses, incentive compensation, equity-based compensation, and employee pension and welfare benefit plans; or

 

   

any other matters that involve executive compensation.

The compensation of Getty’s named executive officers is recommended by the CEO to the Compensation Committee. The CEO reviews the performance of each executive officer (other than his own) with the Compensation Committee. The Compensation Committee considers the CEO’s recommendations, evaluates the CEO’s individual performance and establishes the compensation for each named executive officer, including the CEO. The CEO does not play any role in the Compensation Committee’s deliberation of matters impacting his own compensation. No executive officer other than the CEO plays a role in determining or recommending the amount or form of executive compensation.

 

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Contacting the Board of Directors

Stockholders and other interested parties who wish to communicate with the Board of Directors may do so by sending written communications to the Board of Directors at the following address: Board of Directors, Getty Realty Corp., Two Jericho Plaza, Wing C, Suite 110, Jericho, New York 11753. Stockholders and other interested parties who wish to direct communications to only the independent (non-management) directors of Getty may do so by sending written communications to the following address: Independent Directors, c/o Getty Realty Corp., Two Jericho Plaza, Wing C, Suite 110, Jericho, New York 11753. Concerns relating to accounting, internal controls or auditing matters are handled in accordance with procedures established by the Audit Committee with respect to such matters.

Executive Officers

The Company’s executive officers are as follows:

 

   

Mr. Christopher J. Constant, age 40, President and Chief Executive Officer since January 1, 2016. Mr. Constant is also a Director of the Company. Mr. Constant joined the Company in November 2010 as Director of Planning and Corporate Development and was later promoted to Treasurer in May 2012 and Vice President in May 2013. In December 2013, he was promoted to Chief Financial Officer of the Company. Prior to joining Getty, Mr. Constant was a Vice President in the corporate finance department of Morgan Joseph & Co. Inc. and began his career in the corporate finance department at ING Barings.

 

   

Mr. Mark J. Olear, age 54, Executive Vice President and Chief Investment Officer of Getty since May 2014 and Chief Operating Officer of Getty since May 2015. Prior to joining Getty, Mr. Olear held various positions in real estate with TD Bank, Home Depot, Toys “R” Us and A&P.

 

   

Mr. Joshua Dicker, age 58, Executive Vice President, General Counsel and Secretary of Getty (Executive Vice President since May 2017, Senior Vice President since May 2012, Vice President since February 2009, General Counsel and Secretary since February 2008). Mr. Dicker joined Getty in February 2008. Prior to joining Getty, he was a partner in the law firm Arent Fox LLP, resident in its New York City office, specializing in corporate and transactional matters.

 

   

Mr. Danion Fielding, age 47, Vice President, Chief Financial Officer and Treasurer. Mr. Fielding joined the Company in February 2016. Prior to joining the Company, Mr. Fielding held various positions in commercial real estate and finance with Wilbraham Capital, Inc., The Moinian Group, Nationwide Health Properties, Inc., and J.P. Morgan Securities Inc.

There are no family relationships between any of the Company’s directors or executive officers.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT OF SHARES

The following table sets forth the beneficial ownership of Getty common stock as of March 6, 2019 of (i) each person who is a beneficial owner of more than 5% of the outstanding shares of Getty common stock, (ii) each director, (iii) the Named Executive Officers (as defined below), and (iv) all directors and executive officers as a group. The number of shares column includes shares as to which voting power and/or investment power may be acquired within 60 days of March 6, 2019 (inclusive of vested Restricted Stock Units (“RSUs”) – see footnote 2 below).

 

Name and Address of Beneficial Owner(1)   Shares of Common Stock
Beneficially Owned
   

Approximate
Percent of Class (2)    

 

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

    5,835,318 (3)       14.40      

The Vanguard Group, Inc.

100 Vanguard Boulevard

Malvern, PA 19355

    5,188,510 (4)       12.80      

Renaissance Technologies LLC

Renaissance Technologies Holdings Corporation

800 Third Avenue

New York, NY 10022

    2,541,886 (5)       6.27      

Leo Liebowitz, Chairman of the Board

    3,182,677 (6)       7.78      

Howard B. Safenowitz, Director

Includes shares attributable to:

Safenowitz Family Corp. - 2,455,747 (7) shares (6.01%)

    3,026,853 (8)       7.40      

Milton Cooper, Director

c/o Kimco Realty Corporation

3333 New Hyde Park Road

New York, NY 11042

    1,357,680 (9)       3.32      

Philip E. Coviello, Director

    95,335 (10)        *      

Mary Lou Malanoski, Director

    0 (11)        *      

Richard E. Montag, Director

    98,708 (12)        *      

Christopher J. Constant, Director, CEO and President

    41,449 (13)        *      

Mark J. Olear, Executive Vice President and Chief Operating Officer

    23,070 (14)       *      

Joshua Dicker, Executive Vice President, General Counsel and Secretary

    52,661 (15)        *      

Danion Fielding, Vice President, Chief Financial Officer and Treasurer

    7,052 (16)        *      

Directors and executive officers as a group (10 persons)

    7,885,485       19.30      

* Total shares beneficially owned constitute less than one percent of the outstanding shares.

 

       

 

(1)

Unless otherwise indicated, the address of each of the named individuals is c/o Getty Realty Corp., Two Jericho Plaza, Wing C, Suite 110, Jericho, NY 11753.

 

(2)

The percentage is determined for each stockholder listed by dividing (A) the number of shares shown for such stockholder, by (B) the aggregate number of shares outstanding as of March 6, 2019 plus shares subject to RSUs granted under our 2004 Plan that are vested as of March 6, 2019. No additional RSUs will vest for any individual stockholder named above within 60 days of March 6, 2019. Pursuant to the terms of the RSU award agreements in effect from and after 2009, settlement of vested RSUs is deferred until the earlier of the tenth anniversary of the grant date (or the tenth anniversary of the first vesting date, for RSUs granted in 2016-2018) or termination of service. Settlement of RSUs granted prior to 2009 is deferred until termination of service pursuant to the terms of the award agreements in effect prior to 2009.

 

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(3)

The information is derived from a Schedule 13G filed by BlackRock, Inc. on January 28, 2019. BlackRock, Inc. has sole power to vote or to direct the vote of 5,742,498 shares and sole power to dispose or to direct the disposition of 5,835,318 shares.

 

(4)

The information is derived from a Schedule 13G filed by The Vanguard Group, Inc. (“Vanguard”) on February 11, 2019. Vanguard has sole power to vote or direct to vote 60,026 shares; shared power to vote or direct to vote 50,965 shares; sole power to dispose of or to direct the disposition of 5,108,511 shares; shared power to dispose or to direct the disposition of 79,999 shares.

 

(5)

The information is derived from a Schedule 13G filed jointly by Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation (together, “Renaissance”) on February 12, 2019. Renaissance has sole power to vote or direct to vote 2,541,012 shares; sole power to dispose of or to direct the disposition of 2,541,012 shares; shared power to dispose or to direct the disposition of 874 shares.

 

(6)

Includes 463,632 shares held by Mr. Liebowitz’s wife as to which he disclaims beneficial ownership, 56,434 shares held by a charitable foundation of which Mr. Liebowitz is a co-trustee, 480 shares held in the Getty Realty Corp. Retirement and Profit Sharing Plan, 439,691 shares held by Liebowitz Realty, LLC, of which Mr. Liebowitz is co-grantor and manager, 607,652 shares held by Liebowitz Realty II LLC, of which Mr. Liebowitz is the sole member/manager, 310,957 of the shares held by CLS General Partnership Corp., of which Mr. Liebowitz is a stockholder, 81,648 shares held by Liebowitz 2015 Family Trust, of which Mr. Liebowitz is not a beneficiary and his spouse is the sole trustee, and 33,200 vested RSUs. Of the shares reported as beneficially owned by Mr. Liebowitz, 1,000,000 shares are pledged as collateral for an $8.5 million loan.

 

(7)

Includes 1,848,092 shares held by Safenowitz Partners, LP, 517,857 shares held by Safenowitz Family Partnership, LP, and 89,798 shares held by Safenowitz Investment Partners. Safenowitz Family Corp. is the general partner of each of Safenowitz Partners, LP, Safenowitz Family Partnership, LP and Safenowitz Investment Partners. Mr. Safenowitz is the president of Safenowitz Family Corp.

 

(8)

Includes 2,455,747 shares attributable to Safenowitz Family Corp. (see footnote 7 above). Also includes 40,249 shares which are held as custodian for his three adult children, as to which Mr. Safenowitz disclaims beneficial ownership, 11,586 shares held by Mr. Safenowitz’s wife, as to which Mr. Safenowitz disclaims beneficial ownership, and 324,537 shares beneficially owned by The Marilyn Safenowitz Irrevocable Trust u/a/d 4/13/00, of which Mr. Safenowitz is the trustee (which Trust shares include 308,097 shares held by CLS General Partnership Corp., of which the Trust is a stockholder). Also includes 33,200 vested RSUs.

 

(9)

Includes 77,354 shares held by Mr. Cooper’s wife as to which he disclaims beneficial ownership, 31,360 shares held by a charitable foundation of which Mr. Cooper is the president, 134,052 of the shares held by CLS General Partnership Corp., of which Mr. Cooper is a stockholder and 1,051,137 shares beneficially owned by the Milton Cooper 2013 Revocable Trust u/a/d of which Mr. Cooper is the sole trustee. Also includes 33,200 vested RSUs.

 

(10)

Includes 25,983 shares held by a charitable remainder trust of which Mr. Coviello is the trustee, 33,200 vested RSUs, and 942 shares in a testamentary trust formed under Mr. Coviello’s father’s will for the benefit of Mr. Coviello and his children, of which he is a co-trustee.

 

(11)

Ms. Malanoski was appointed to the Board of Directors on October 23, 2018.

 

(12)

Includes 20,446 shares held by Mr. Montag’s wife as to which he disclaims beneficial ownership and 30,700 vested RSUs.

 

(13)

Includes 40,750 vested RSUs.

 

(14)

Includes 23,000 vested RSUs.

 

(15)

Includes 52,500 vested RSUs.

 

(16)

Includes 7,000 vested RSUs.

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Compensation Committee is responsible for setting and administering the compensation policies and practices for the executive officers of the Company. The Company’s executive compensation program consists primarily of the following elements: base salary, cash incentive compensation, equity compensation and retirement plans. We do not utilize compensation policies or practices that create risks which are reasonably likely to have a material adverse effect on the Company.

This “Compensation Discussion and Analysis” section describes generally the compensation policies and practices that the Company applies to our Chief Executive Officer (“CEO”), Christopher J. Constant, Chief Operating Officer and Chief Investment Officer, Mark J. Olear, General Counsel, Joshua Dicker, and Chief Financial Officer (“CFO”), Danion Fielding (each of the foregoing, a “Named Executive Officer” or “NEO”). For additional details about our NEOs for 2018, see “Executive Officers” at page 19 of this Proxy Statement and “Summary Compensation Table” at page 24 of this Proxy Statement.

2018 Company Performance Highlights

The following presents a summary of certain financial and operational highlights achieved by the Company in 2018 which, among other factors, were considered by the Compensation Committee in reaching its determinations regarding the performance and compensation of our Named Executive Officers. (See our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2018, for additional details regarding each of these highlights.)

 

 

Strong Financial Performance.  2018 was a highly productive year for the Company, as its performance and market position yielded strong returns. The Company delivered on key financial objectives, including meeting its published 2018 adjusted funds from operations (“AFFO”) guidance. The Company increased its annual dividend rate by 9.4% and generated total annual stockholder returns of 13.8% for the calendar year. For the year ended December 31, 2018, the Company declared $53.6 million of dividends, or $1.31 per share, as compared to $43.7 million of dividends, or $1.16 per share, in the prior year, representing an increase of 12.9% on a per share basis. For the year ended December 31, 2018, the Company reported net earnings of $47.7 million, or $1.17 per share, as compared to net earnings of $47.2 million, or $1.26 per share, in the prior year; funds from operations (“FFO”) of $73.6 million, or $1.80 per share, as compared to FFO of $74.6 million, or $2.00 per share, in the prior year; and AFFO of $69.7 million, or $1.71 per share, as compared to AFFO of $62.0 million, or $1.66 per share, in the prior year.1

 

 

Expanded and Enhanced Real Estate Portfolio.  During the year ended December 31, 2018, the Company acquired fee simple interests in 41 convenience store and gasoline station or other automotive-related properties for an aggregate purchase price of $78.0 million. The leases associated with these acquisitions have a weighted average initial term of 14.1 years and are expected to produce attractive returns. As a result of these transactions, the Company added a number of high-quality tenants and properties, diversified its tenant base, and expanded its geographic presence in the Southeastern and Southwestern United States. In addition, the Company advanced its portfolio management objectives during the year by selling 10 properties (generating $7.25 million of gross proceeds).

 

 

Broadened Redevelopment Program.  In 2018, the Company continued to advance and enlarge its redevelopment program, which seeks to unlock embedded value within its existing net lease portfolio by taking certain convenience store and gasoline station properties and redeveloping them into either a new convenience

 

 

1 AFFO and FFO are non-GAAP measures. For a description of how Getty calculates AFFO and FFO and for a reconciliation of these non-GAAP measures to the nearest comparable GAAP measure, see Item 6 (Selected Financial Data) in the Annual Report on our Form 10-K for the year ended December 31, 2018.

 

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and gasoline use or an alternative single-tenant net-lease retail use with higher returns. In 2018, rent commenced on six redevelopment projects, and, as of December 31, 2018, the Company had six of its properties under active redevelopment for alternative uses. In addition to the six properties currently classified as redevelopment, the Company is in various stages of feasibility and planning for the recapture of select properties from its net lease portfolio that are suitable for redevelopment to either a new convenience and gas use or for alternative single-tenant net lease retail uses. As of December 31, 2018, the Company had signed leases on seven properties that are currently part of its net lease portfolio, which will be recaptured and transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.

 

 

Strengthened the Company’s Balance Sheet for Growth Initiatives. In 2018, the Company undertook several actions to optimize its balance sheet for future growth, including:

 

  o

maintaining strong credit metrics, such as a Fixed Charge Coverage Ratio of 3.4x* and a Net Debt to EBITDA Ratio of 4.0x*;

 

  o

in March 2018, entering into an amended and restated credit agreement (the “Restated Credit Agreement”) amending and restating its prior credit agreement. Pursuant to the Restated Credit Agreement, the Company (i) increased its borrowing capacity under its unsecured revolving credit facility (the “Revolving Facility”) from $175.0 million to $250.0 million, (ii) extended the maturity date of the Revolving Facility from June 2018 to March 2022, (iii) extended the maturity date of its unsecured term loan (the “Term Loan”) from June 2020 to March 2023 and (iv) amended certain financial covenants and provisions. The Restated Credit Agreement also reflects reductions in the interest rate spreads for borrowings under each of the Revolving Facility and the Term Loan;

 

  o

also in March 2018, establishing a new at-the-market equity offering program (the “ATM Program”), pursuant to which the Company is able to issue and sell shares of its common stock with an aggregate sales price of up to $125.0 million through a consortium of banks acting as agents. During the year ended December 31, 2018, the Company utilized the ATM Program to issue 1.1 million shares, raising net proceeds of $30.1 million;

 

  o

in May 2018, receiving an investment grade rating of BBB- from Fitch Ratings, which is expected to lead to greater access to debt capital and positions the Company to achieve a lower cost of capital over time; and

 

  o

in June 2018, issuing $100.0 million of senior unsecured notes maturing in 2028 bearing interest at a fixed rate of 5.47%. The senior unsecured notes were issued in a private placement with The Prudential Insurance Company of America and certain of its affiliates (collectively, “Prudential”) and the Metropolitan Life Insurance Company and certain of its affiliates and are subject to substantially similar terms and conditions as the Company’s existing senior unsecured notes with Prudential.

Getty’s Compensation Program

Getty’s compensation program for executive officers is designed to effectively manage the Company’s aggregate annual compensation expense while providing executive officers with a total compensation package that is adequate to retain them, encourage and motivate their high performance and promote their accountability. Getty’s compensation policies are also designed to promote increased stockholder value by aligning the financial interests of Getty’s executive officers with those of its stockholders. The Compensation Committee believes that its current policies, plans and programs are adequate for these purposes.

Getty’s executive compensation program involves a combination of annual cash compensation, discretionary incentive compensation (cash incentive awards and equity incentive awards such as RSUs with dividend equivalents),

 

 

* Capitalized terms are as defined in the Company’s Restated Credit Agreement, Third Restated Prudential Note Purchase Agreement and MetLife Note Purchase Agreement. Calculations are as of December 31, 2018.

 

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retirement and other plans, and perquisites and other benefits. Although the Compensation Committee has not adopted any formal policies for allocating compensation among the foregoing compensation components, in conducting its review and rendering its determinations, the Compensation Committee evaluates whether each Named Executive Officer is provided with a total compensation opportunity that achieves the key objectives of the compensation program while maintaining an appropriate cost structure.

Base salary levels for NEOs are, in combination with other compensation components, considered by the Compensation Committee to be sufficient to achieve the objectives of Getty’s compensation program. Total compensation, including discretionary annual cash incentive awards and RSU grants (including dividend equivalents paid with respect to such RSUs), are in aggregate amounts which the Compensation Committee considers sufficient to retain the NEOs and to align their interests with those of Getty’s stockholders.

In making executive compensation determinations, the Compensation Committee has also considered the results of the non-binding, advisory stockholder votes on the Company’s executive compensation program. Our stockholders have approved the Company’s executive compensation program each year since the advisory vote was first sought, most recently approving it by 97% of votes cast on the say-on-pay proposal in our 2018 Proxy Statement. The Compensation Committee was mindful of our stockholders’ endorsement of the Compensation Committee’s decisions and policies and has maintained its general approach to executive compensation for decisions made to date. The Compensation Committee will continue to consider the results from this year’s and future advisory stockholder votes regarding the executive compensation program.

Total compensation determinations by the Compensation Committee for each NEO are influenced in part by the particular responsibilities of the applicable executive position with additional consideration given to such NEO’s individual performance. Our CEO reviews the performance of each NEO (other than himself) and provides compensation recommendations for all NEOs (including himself) to the Compensation Committee with respect to base salary amounts, cash bonuses and grants of equity based awards under the 2004 Plan consisting of RSUs (including dividend equivalents with respect to such RSUs). The Compensation Committee reviews and deliberates upon the CEO recommendations, evaluates the CEO’s and each of the NEO’s individual performances, and establishes the compensation for each NEO. The CEO does not play any role in the Compensation Committee’s deliberation of matters impacting his own compensation. Although the Compensation Committee takes the CEO’s recommendations under advisement, it independently evaluates the compensation recommendations for each NEO and in all instances exercises its discretion in making final compensation decisions in accordance with its authority and formal responsibilities set forth in its Charter. The Compensation Committee has direct knowledge of the performance of each of the NEOs through regular and special reports by these executives to the Board of Directors and Board Committees and through other interactions with these executives related to the Company’s operations and performance. In reaching the executive compensation decisions described below, the Compensation Committee recognized the individual contributions that each NEO made towards the Company’s operational and financial achievements highlighted above, while also recognizing each of their individual efforts, including the following notable accomplishments for each NEO:

 

NEO    2018 Individual Performance Highlights

Mr. Christopher J. Constant

President and Chief Executive Officer

  

●   Successfully led the Company’s growth platform, advanced the Company’s revenue and geographic diversity goals, and advanced the Company’s redevelopment program;

  

●   Delivered increased value to stockholders by increasing the Company’s AFFO per share by 3% and increasing the Company’s annual dividend rate by 9.4%;

  

●   Provided strategic oversight over the Company’s capital markets initiatives;

  

●   Recruited a new director, which resulted in Ms. Malanoski joining the Board of Directors, and broadened the diversity composition of the Board of Directors; and

  

●   Led the Company’s rating process, which resulted in the Company receiving an investment grade rating of BBB- from Fitch Ratings.

 

 

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Mr. Mark J. Olear
Executive Vice President, Chief Investment Officer and Chief Operating Officer
  

●   Identified numerous actionable acquisition opportunities, resulting in the closing of $78 million in acquisitions in the aggregate;

  

●   Successfully advanced the Company’s redevelopment program by completing six projects and ending 2018 with 13 signed leases for redevelopment projects;

  

●   Grew the Company’s pipeline of potential acquisition targets;

  

●   Oversaw the Company’s environmental remediation program, resulting in a reduction in our reported environmental liability of $3.7 million; and

  

●   Effectively managed the Company’s assets, including disposing of 10 properties (generating proceeds of $7.25 million), and completing a portfolio-wide site inspection and information gathering initiative.

 

Mr. Joshua Dicker

Executive Vice President, General

Counsel and Secretary

  

●   Successfully led the Company’s legal compliance, regulatory affairs and tenant compliance programs;

  

●   Effectively structured, negotiated and documented the Company’s real estate transactions, including for completed acquisitions and significant lease amendments;

  

●   Effectively managed the Company’s litigation portfolio;

  

●   Effectively managed the Company’s insurance programs; and

  

●   Provided effective corporate governance oversight and advice to the Company’s Board of Directors.

 

Mr. Danion Fielding

Vice President, Chief Financial

Officer and Treasurer

  

●   Successfully led the Company’s capital markets initiatives, including closing of the Amended and Restated Credit Agreement, the establishment of the ATM Program, the issuance of $100.0 million of senior unsecured notes, and the receipt of an investment grade rating of BBB- from Fitch Ratings;

  

●   Enhanced investors relations by increasing the Company’s equity research coverage; and

  

●   Advanced the Company’s information technology initiatives, including through the implementation of several hardware and software infrastructure and network upgrades.

 

The compensation of the CEO is discussed, deliberated upon and approved solely by the Compensation Committee.

The Compensation Committee may periodically engage outside professional firms to assist in understanding compensation levels and programs in the broader marketplace and to provide advice on executive compensation. In 2018, the Compensation Committee did not engage the services of a compensation consultant and did not benchmark compensation elements against a peer group.

The primary elements of compensation for our NEOs are the following:

   

Base salary;

 

   

Incentive compensation (discretionary annual cash incentive awards and equity incentive awards like RSUs with dividend equivalents);

 

   

Retirement and other plans; and

 

   

Perquisites and other benefits.

Base Salary

The Compensation Committee examines whether each NEO’s base salary is competitive and appropriate in view of such person’s role, level of responsibility, experience and value to the Company, and relative to achieving the

 

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overall goals of the compensation program for all NEOs. The Compensation Committee reviews base salaries annually and in the interim if an executive officer’s position or responsibilities change or if the Committee believes it is otherwise necessary or appropriate to do so. Salaries are not automatically increased on an annual basis if the Committee believes that a raise is not warranted by either individual or Company performance, or that other forms of compensation are more appropriate to advance compensation program objectives.

As part of its process and in order to achieve the overall goals of Getty’s executive compensation program, the Compensation Committee determined to increase base salaries in 2019 from those in effect in 2018 by the following amounts for the following NEOs: Mr. Constant’s base salary for 2019 was increased by 3.0%, and base salaries for 2019 for each of Messrs. Olear, Dicker and Fielding were increased by 3.0%, 3.4% and 3.8%, respectively.

Incentive Compensation

Cash Bonus

The Compensation Committee believes that discretionary cash bonuses are useful on a case by case basis to motivate and reward executives for their contribution to annual operating results and Company achievements that help create value for our stockholders. Cash bonuses for NEOs are not guaranteed but have been awarded at the discretion of the Compensation Committee. In deciding whether to award discretionary cash bonuses, the Compensation Committee makes its determinations as described above, based upon (i) recommendations from the Company’s CEO, (ii) its review with the CEO of the performance of each NEO (other than the CEO himself), (iii) its evaluation of the CEO’s individual performance, (iv) its informed judgment, in view of the Company’s financial and operational performance, of each NEO’s responsibilities and efforts, such NEO’s contribution to the Company’s overall performance and success, and the complexity or difficulty of the objectives that have been achieved by such NEO, (v) the relative significance of a cash bonus award toward meeting the overall goals of Getty’s compensation program, and (vi) other relevant considerations. These factors are considered subjectively and no one factor is accorded any specific weight. In February 2019, the Compensation Committee awarded discretionary cash bonuses as reflected in the Summary Compensation Table for 2018. Specifically, Mr. Constant was paid a cash bonus of $340,000, Mr. Olear and Mr. Dicker were each paid a cash bonus of $235,000 and Mr. Fielding was paid a cash bonus of $180,000.

Equity Incentive Awards

The Company maintains the stockholder-approved 2004 Plan for officers and other valued employees of the Company and its subsidiaries, and members of the Board. The 2004 Plan allows for the grant of various types of stock-based awards, other than stock options, to eligible individuals. The 2004 Plan is administered by the Compensation Committee, which has the power to determine eligibility, the types and sizes of awards, the price and timing of awards, terms of vesting, the acceleration or waiver of any vesting restriction and the timing and manner of settling vested awards.

Generally, to better align the interests of the Company’s NEOs with the interests of the Company’s stockholders and to promote performance that will have a positive long-term impact on total stockholder return, the Compensation Committee annually grants equity-based awards under the 2004 Plan to the Company’s NEOs, consisting of RSUs (including dividend equivalents paid with respect to such RSUs). These RSU awards vest over a five-year period subject to continued employment through the vesting date and, for all such RSU awards granted from and after 2009, are settled, in the discretion of the Compensation Committee, in cash or in shares of the Company’s common stock upon the earlier of ten years after the grant date (or the first vesting date for RSU awards granted in 2016, 2017 and 2018) or termination of employment. Settlement of vested RSUs granted prior to 2009 is deferred until termination of service pursuant to the award agreements in effect prior to 2009. All award agreements also provide for vesting of unvested RSUs in the discretion of, and subject to approval by, the Compensation Committee, in the event of the “Retirement” (as defined in the award agreement) of the subject executive officer.

The Compensation Committee’s determination in February 2019 to grant RSUs under the annual equity grant program to each NEO was in keeping with its annual practice of using RSUs as part of the compensation program and was based on the Committee’s determination that an annual grant of RSUs fosters the equivalent of stock ownership by the Company’s executive officers, thereby aligning their personal interests with the long-term interests of the Company’s stockholders, and also encourages executive retention because the awards vest over a five-year period.

 

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The size of the annual equity award granted to each NEO is commensurate with the role and responsibilities of such NEO and with historical trends.

In February 2019, the Compensation Committee approved RSU grants to the NEOs in accordance with its annual equity grant program, based on each NEO’s individual performance during 2018 and in furtherance of the overall goals of Getty’s executive compensation program as described above, in the following amounts: 22,500 RSUs to Mr. Constant, 16,500 RSUs to Mr. Olear, 16,500 RSUs to Mr. Dicker, and 11,000 RSUs to Mr. Fielding. These RSU grants will be reflected in the “2019 Grants of Plan-Based Awards” table that will be included in our Proxy Statement for the annual meeting of stockholders to be held in 2020. All such RSU grants include related dividend equivalents.

Retirement Plans

Getty has a retirement and profit sharing plan with 401(k) deferred savings plan provisions (the “Retirement Plan”) for employees, including our NEOs, meeting certain service requirements. An annual discretionary profit sharing contribution to the Retirement Plan is determined by the Board of Directors. The contribution is calculated as a percentage of the sum of (i) the employee’s compensation (as defined in the Retirement Plan) up to the maximum allowed under Internal Revenue Service regulations, and (ii) the excess of that amount over the social security taxable wage base. For 2018, the Board of Directors elected to contribute 1% of that sum for each eligible employee. This percentage was consistent with prior years. Under the terms of the Retirement Plan, the Company matches 50% of each participating employee’s elective contribution to the Retirement Plan, but in no event more than 3% of the employee’s compensation. The Company’s contributions to the Retirement Plan vest in accordance with a six-year vesting schedule and are paid upon retirement, death, disability, or termination of employment, as described more fully in the Retirement Plan.

Getty also has the Supplemental Retirement Plan for NEOs and other senior management employees. The Board of Directors has sole discretion to select annually the eligible employees for whom contributions will be made. Under the Supplemental Retirement Plan, which is not qualified for purposes of Section 401(a) of the Internal Revenue Code, a participating employee may receive in his trust account an amount equal to 10% of his compensation (as defined in the Supplemental Retirement Plan), reduced by the amount of any contributions allocated to the employee by the Company under the Retirement Plan. The amounts held in trust under the Supplemental Retirement Plan may be used to satisfy claims of general creditors in the event of bankruptcy of Getty or any of its subsidiaries. An employee’s account vests in the same manner as under the Retirement Plan and is paid upon separation of service from the Company. Under the Supplemental Retirement Plan, during any year, the Board of Directors may elect not to make any payment to the account of any or all eligible employees.

Anti-Hedging and Anti-Pledging Policy

Effective as of February 26, 2019, the Company has adopted an Anti-Hedging and Anti-Pledging Policy (the “Policy”) that prohibits employees (including our executive officers) and directors from (i) engaging in any short sales (including short sales “against the box”), transactions in puts, calls or other derivative securities involving the Company’s securities, on an exchange or in any other organized market, or hedging transactions and (ii) holding Company securities in a margin account or pledging Company securities as collateral for a loan. The only exception to the Policy is the currently outstanding pledge by Mr. Liebowitz of 1,000,000 shares of the Company’s common stock as security for an $8.5 million loan with UBS, which was excepted from the Policy after consideration by the Board of Directors because such pledge existed prior to the adoption of the Policy.

 

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Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management as required by Item 402(b) of Regulation S-K, and based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with the SEC and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Compensation Committee:

Milton Cooper (Chairman)

Philip E. Coviello

Richard E. Montag

Howard B. Safenowitz

 

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Summary Compensation Table

The following table sets forth information about the compensation of the CEO and each of the other Named Executive Officers for services in all capacities to Getty and its subsidiaries during the periods indicated.

 

Name and

Principal Position

     Year        Salary        Bonus        Stock
Awards(1)
       Option
Awards
     Non
Equity
Incentive
Plan
Compen-
sation
     Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
     All Other
Compen-
sation(2)
       Total
Compen-
sation
 
                ($)        ($)        ($)        ($)      ($)      ($)      ($)        ($)  

    Christopher J. Constant

       2018          493,654          340,000          435,225        0      0      0        65,072          1,333,951    

    President and Chief

       2017          484,615          300,000          395,400        0      0      0        62,207          1,242,222    

    Executive Officer

       2016          467,308          225,000          275,400        0      0      0        59,605          1,027,313    

    Mark J. Olear,

       2018          410,385          235,000          323,310        0      0      0        52,372          1,021,067    

    Executive Vice

       2017          404,808          200,000          289,960        0      0      0        50,257          945,025    

    President, Chief

    Investment Officer

                                            
       2016          386,731          170,000          183,600        0      0      0        48,257          788,588    

    and Chief Operating

                                            

    Officer

                                            

    Joshua Dicker

       2018          365,385          235,000          323,310        0      0      0        47,872          971,567    

    Executive Vice

       2017          356,731          200,000          289,960        0      0      0        45,757          892,448    

    President, General

                                            

    Counsel and

       2016          330,769          170,000          183,600        0      0      0        43,140          727,509    

    Secretary

                                            

    Danion Fielding

       2018          261,538          180,000          198,960        0      0      0        37,060          677,558    

    Vice President, Chief

       2017          256,923          150,000          158,160        0      0      0        35,464          600,547    

    Financial Officer and Treasurer

       2016          221,539          120,000          91,800        0      0      0        33,655          466,994    

 

(1) 

Stock awards are in the form of restricted stock units (RSUs). The amount reflected is the grant date fair value computed in accordance with FASB ASC Topic 718. The value of future dividends is assumed to be reflected in the closing per share price of the common stock, and, consequently, in the fair value of each award. Therefore, the dividend equivalents paid on RSUs are not shown separately in this table. The Company pays dividend equivalents on RSUs only to the extent dividends are declared on shares of its common stock.

(2) 

All Other Compensation includes (a) profit sharing and Company matching contributions under the Retirement Plan, (b) contributions under the Supplemental Retirement Plan, (c) life insurance premiums, and (d) perquisites and other personal benefits received by the NEOs that exceeded $10,000 in the aggregate for the year, which consist only of automobile allowances. See “All Other Compensation” table, below.

All Other Compensation

The following table sets forth information about amounts included in the All Other Compensation column of the Summary Compensation Table.

 

          Name      Year        Profit Sharing
Contribution
     Company
Match
Under
401(k)
Provisions
       Supplemental
Retirement
Plan
     Life
Insurance(1)
     Perquisites
and Other
Personal
Benefits (2)
       Total All Other
Compensation
                ($)      ($)        ($)      ($)      ($)        ($)

    Christopher

       2018        4,216        8,250          37,534      1,872          13,200          65,072

    J. Constant

       2017        4,128        8,100          35,022      1,757          13,200          62,207
       2016        4,115        7,950          32,935      1,405          13,200          59,605

    Mark J.

       2018        4,216        8,250          29,034      1,872          9,000          52,372

    Olear

       2017        4,128        8,100          27,272      1,757          9,000          50,257
       2016        4,115        7,950          25,435      1,757          9,000          48,257

    Joshua

       2018        4,216        8,250          24,534      1,872          9,000          47,872

    Dicker

       2017        4,128        8,100          22,772      1,757          9,000          45,757
       2016        4,115        7,950          20,435      1,640          9,000          43,140

    Danion

       2018        4,216        8,250          14,034      1,560          9,000          37,060

    Fielding

       2017        4,128        8,100          12,772      1,464          9,000          35,464
        

 

2016

 

 

 

     3,247

 

      

 

6,648  

 

 

 

     14,105

 

     1,405  

 

      

 

8,250  

 

 

 

     33,655

 

 

(1) 

All life insurance policy premiums relate to term life insurance policies.

(2) 

Perquisites and Other Personal Benefits consist only of an automobile allowance.

 

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2018 Compensation Disclosure Ratio of the Median Annual Total Compensation of All Company Employees to the Annual Total Compensation of the Company’s Chief Executive Officer

Mr. Christopher J. Constant, who serves as the Company’s President and Chief Executive Officer, had fiscal 2018 total compensation of $1,333,951, as reflected in the Summary Compensation Table included in this Proxy Statement. We estimate that the median annual compensation for all employees of the Company, excluding our Chief Executive Officer, was $191,473 for 2018. As a result, Mr. Constant’s 2018 annual compensation was approximately seven (7) times that of the median annual compensation for all employees.

To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments, and estimates that we used were as follows:

(1) We determined that, as of December 31, 2018, our employee population consisted of 29 individuals other than Mr. Constant. We selected December 31, 2018, which is within the last three months of 2018, as the date upon which we would identify the “median employee.”

(2) We identified our median employee based on the annual total compensation paid during the fiscal year ended December 31, 2018, calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K. We note that the median employee is the same individual we identified for the fiscal year ended December 31, 2017. In addition, for purposes of reporting the ratio of annual total compensation of the Chief Executive Officer to the median employee, both the Chief Executive Officer and the median employee’s total compensation paid during the fiscal year ended December 31, 2018 were calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K. The Company has not made any of the adjustments permissible by the SEC, nor have any material assumptions or estimates been made to identify the median employee or to determine annual total compensation. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculating the pay ratio, as permitted by SEC rules.

2018 Grants of Plan Based Awards

 

    Name    Board
Action
Date
     Grant
Date
    

Estimated Future

Payouts Under Non

Equity Incentive Plan Awards

  

Estimated Future

Payouts Under

Equity Incentive Plan Awards

   All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(1)
    

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(#)

  

Grant Date
Fair Value
  of Stock and  
Option
Awards

($)(2)

                   Threshold    Target    Maximum    Threshold    Target    Maximum                 
                   ($)    ($)    ($)    (#)    (#)    (#)                 

    Christopher

     3/1/18        3/1/18      0    0    0    0    0    0      17,500      0    $435,225    

    J. Constant

    Mark J.

     3/1/18        3/1/18      0    0    0    0    0    0      13,000      0      323,310    

    Olear

    Joshua

     3/1/18        3/1/18      0    0    0    0    0    0      13,000      0      323,310    

    Dicker

    Danion

     3/1/18        3/1/18      0    0    0    0    0    0      8,000      0      198,960    

    Fielding

 

(1) 

Stock awards are in the form of RSUs that vest over a five-year period on the anniversary of the grant date with accelerated vesting in the event of death or termination of service by the Company without cause.

(2)

Grant date fair value is computed in accordance with FASB ASC Topic 718.

 

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2018 Outstanding Equity Awards at Year-End

The following table provides information as to outstanding Stock Options and RSUs held by each of the NEOs at December 31, 2018.

 

            Option Awards(1)                           Stock Awards                
Name    Number of
Securities
Underlying
Unexercised
Options
     Number of
Securities
Underlying
Unexercised
Options
     Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
     Option
Exercise
Price
     Option
Expiration
Date
     Grant Date      Number
of
Shares
or Units
of Stock
That
Have
Not
Vested (2)
     Market
Value
of
Shares
or Units
of Stock
That
Have
Not
Vested
     Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
     Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
 
    

(#)

Exercisable

     (#)
Unexercisable
     (#)      ($)                    (#)      ($)      (#)      ($)  
                             

Christopher J

                    3/1/18        17,500        514,675        

Constant

                    3/1/17        12,000        352,920        
                    3/9/16        9,000        264,690        
                    3/1/15        3,000        88,230        
                    3/1/14        1,200        35,292        

Mark J.

                    3/1/18        13,000        382,330        

Olear

                    3/1/17        8,800        258,808        
                    3/9/16        6,000        176,460        
                    3/1/15        3,000        88,230        
                    5/13/14        1,000        29,410        

Joshua

                    3/1/18        13,000        382,330        

Dicker

                    3/1/17        8,800        258,808        
                    3/9/16        6,000        176,460        
                    3/1/15        3,000        88,230        
                    3/1/14        1,200        35,292        

Danion

                    3/1/18        8,000        235,280        

Fielding

                    3/1/17        4,800        141,168        
                    3/9/16        3,000        88,230        

(1) The term of the Company’s Stock Option Plan expired in 2008. Stock Options may no longer be granted pursuant to the Stock Option Plan. There are no stock options outstanding under the Stock Option Plan.

(2) RSUs vest at the rate of 20% per year on the first five anniversaries of the grant date and vest earlier upon death or termination of employment by the Company without cause.

 

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2018 Option Exercises and Stock Vested

The following Option Exercises and Stock Vested table provides additional information about the stock awards that vested during the year ended December 31, 2018.

 

   

Option Awards(1)

  

Stock Awards

    Name   Number of Shares
Acquired on
Exercise
(#)
   Value Realized on
Exercise
($)
   Number of Shares
Acquired on
Vesting
(#)(2)
  Value Realized on
Vesting
($)(3)

Christopher J. Constant

  N/A    N/A    9,300   231,291

Mark J. Olear

  N/A    N/A    6,700   166,629

Joshua Dicker

  N/A    N/A    7,900   196,473

Danion Fielding

  N/A    N/A    2,200     54,714

 

(1) 

The term of the Company’s Stock Option Plan expired in 2008. Stock options may no longer be granted pursuant to the Stock Option Plan. There are no stock options outstanding under the Stock Option Plan.

(2) 

Reflects the number of RSUs that vested during 2018.

(3)

Reflects an amount equal to the number of RSUs that vested in 2018 multiplied by the closing price of the underlying shares of Getty common stock on the applicable vesting date. Settlement of these vested RSUs is deferred pursuant to the terms of the RSU award agreement until the earlier of the tenth anniversary of the grant date (or the tenth anniversary of the first vesting date, for RSUs granted in 2016-2018), or the NEO’s termination of service. Settlement of vested RSUs granted prior to 2009 is deferred until termination of service pursuant to the award agreements in effect prior to 2009. The Value Realized on Vesting for all NEOs is included as Registrant Contributions in the Nonqualified Deferred Compensation table, below.

 

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Nonqualified Deferred Compensation

 

  Name    Executive
Contributions
in Last FY
     Registrant
Contributions in
Last FY(1)
     Aggregate
Earnings (Loss)
in Last FY(2)
    Aggregate
Withdrawals/
Distributions
     Aggregate
Balance at Last
FYE(3)
 
     ($)      ($)      ($)     ($)      ($)  

  Christopher J. Constant

             

  Supplemental Retirement Plan

     0        35,022        (5,393     0        149,501  

  Vested RSUs

     0        231,291        85,535       0        839,656  

  Total

     0        266,313        80,142       0        989,157  

  Mark J. Olear

             

  Supplemental Retirement Plan

     0        27,272        (386     0        98,549  

  Vested RSUs

     0        166,629        48,418       0        432,327  

  Total

 

    

 

0

 

 

 

    

 

193,901

 

 

 

    

 

48,032

 

 

 

   

 

0

 

 

 

    

 

530,876

 

 

 

  Joshua Dicker

             

  Supplemental Retirement Plan

     0        22,772        (5,497     0        230,722  

  Vested RSUs

     0        196,473        120,466       0        1,338,155  

  Total

     0        219,245        114,969       0        1,568,877  

  Danion Fielding

             

  Supplemental Retirement Plan

     0        12,772        (173     0        28,743  

  Vested RSUs

     0        54,714        12,238       0        94,112  

  Total

     0        67,486        12,065       0        122,855  

 

(1) 

The amount reported for each executive in the column “Registrant Contributions in Last FY” for the Supplemental Retirement Plan represents the respective amount reported for each executive for the prior year, 2017, in the column “Supplemental Retirement Plan” in the All Other Compensation Table above, and the amount reported for Vested RSUs is equal to the Value Realized on Vesting reflected in the 2018 Option Exercises and Stock Vested table above.

(2)

For RSUs, the aggregate earnings (loss) reflect the change in value of the shares of Getty common stock subject to the RSUs calculated based on the change in the closing price from December 31, 2017 to December 31, 2018, for RSUs that vested prior to 2018, and the change in the closing price from the vesting date to December 31, 2018 for RSUs that vested in 2018. Settlement of vested RSUs is deferred pursuant to the terms of the RSU award agreement until the earlier of the tenth anniversary of the grant date (or the tenth anniversary of the first vesting date, for RSUs granted in 2016-2018), or the NEO’s termination of service. Settlement of vested RSUs granted prior to 2009 is deferred until termination of service pursuant to the award agreements in effect prior to 2009.

(3) 

The Aggregate Balance includes the balances accumulated under the Supplemental Retirement Plan and the aggregate value of all vested RSUs for which settlement has been deferred based on $29.41 per share, the closing price of Getty common stock on December 31, 2018.

Getty maintains the Supplemental Retirement Plan for NEOs and other senior management employees. The Board of Directors has sole discretion to select annually the eligible employees for whom contributions will be made. Under the Supplemental Retirement Plan, which is not qualified for purposes of Section 401(a) of the Internal Revenue Code, a participating employee may receive in his or her trust account an amount equal to 10% of such employee’s compensation (as defined in the Supplemental Retirement Plan), reduced by the amount of any contributions allocated to the employee by the Company under the Retirement Plan. Amounts contributed by the Company for 2018 to the Supplemental Retirement Plan for our NEOs were based upon an amended definition of eligible compensation in the Supplemental Retirement Plan adopted by the Compensation Committee in 2012 so as to exclude anything other than base salary as the basis for computation of eligible compensation. The amounts held in trust under the Supplemental Retirement Plan may be used to satisfy claims of general creditors in the event of Getty’s or any of its subsidiaries’ bankruptcy. An employee’s account vests in the same manner as under the Retirement Plan and is paid upon separation of service from the Company. Under the Supplemental Retirement Plan, during any year the Board of Directors may elect not to make any payment to the account of any or all eligible employees.

Potential Payments upon Termination or Change in Control

Each of the award agreements for outstanding RSUs granted to our employees, including our NEOs, contains a provision that causes the unvested RSUs to vest upon the NEO’s death or termination of the NEO’s employment without cause. The award agreements also provide for optional vesting of unvested RSUs in the event of the “Retirement” (as defined in the award agreement) of the subject employee, including our NEOs, if approved by the Compensation Committee in its discretion. In the event of a termination of employment without cause, the value as of December 31, 2018 of RSUs that would vest upon such termination would be as follows: Mr. Constant - $1,255,807; Mr. Olear - $935,238; Mr. Dicker - $941,120; and Mr. Fielding - $464,678.

 

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We do not provide any compensation or benefits to any of our NEOs solely on account of the occurrence of a change in control of the Company. The RSU award agreements do not provide for accelerated vesting upon the occurrence of a change in control.

 

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Equity Compensation Plans

The following chart presents information regarding Getty’s equity compensation plans as of December 31, 2018:

 

  Plan Category   Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
  Weighted average
exercise price of
outstanding
options, warrants
and rights
  Number of
securities
remaining
available for future
issuance under
equity
compensation
plans (excluding
securities reflected
in the first column
of this chart)

  Equity Compensation Plans approved by

  stockholders: - the 2004 Plan

  573,575(1)
  $0.00   810,246(2)
  Equity Compensation Plans not approved by   stockholders   N/A   N/A   N/A

  Total

  573,575       810,246

 

(1)

Represents shares underlying outstanding vested and unvested RSUs that are settleable, in the discretion of the Compensation Committee, in cash or in shares of the Company’s common stock.

(2)

The 2004 Plan permits awards of restricted stock, RSUs, cash, stock or other performance awards, dividend equivalents, deferred stock awards, stock payments and stock awards. At the annual meeting of stockholders held on May 4, 2017, the Company’s stockholders approved an amendment to the 2004 Plan to increase the aggregate number of shares that the Company may issue under awards under the 2004 Plan by 500,000.

Director Compensation

The following text and table discuss the compensation paid to each of our non-employee directors for 2018:

For 2018, (i) all non-employee directors other than Ms. Malanoski received an annual director fee of $30,000, which included attendance at all meetings of our Board of Directors; (ii) Ms. Malanoski received a director fee of $7,500, which included attendance at the one meeting of our Board of Directors that she was eligible to attend; (ii) Members of our Audit Committee received an annual fee of $12,500, except for (a) the Chairman of the Audit Committee, who received an annual fee of $20,000, and (b) Ms. Malanoski, who received a pro-rated annual fee of $3,125, each of which included attendance at all meetings of our Audit Committee that he or she was eligible to attend; (iii) Members of our Compensation Committee received an annual fee of $5,000, except for the Chairman of the Compensation Committee, who received an annual fee of $7,500, which included attendance at all meetings of our Compensation Committee; and (iv) Members of our Nominating/Corporate Governance Committee received an annual fee of $5,000, except for the Chairman of the Nominating/Corporate Governance Committee, who received an annual fee of $7,500, which included attendance at all meetings of our Nominating/Corporate Governance Committee. In addition, Mr. Safenowitz received a fee of $50,000 for his services as Lead Independent Director. All annual fees payable to directors are paid in four equal quarterly installments.

Non-employee directors are also reimbursed for travel and other expenses related to Company business.

Mr. Liebowitz has served as our Chairman of the Board since 1971 and continues to do so. Mr. Liebowitz retired as an employee of the Company on June 28, 2013. For 2018, Mr. Liebowitz received an annual fee of $125,000 (paid quarterly) for his services as Chairman of the Board, in addition to the annual director fee of $30,000 paid to all directors, as noted above. Mr. Constant is not separately compensated for his services on the Board; his compensation for services as an employee is discussed in the “Compensation Discussion and Analysis” section on page 17 of this Proxy Statement.

 

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Generally, to better align the interests of our non-employee directors with the interests of the Company’s stockholders, the Compensation Committee grants equity-based awards under the 2004 Plan to the Company’s non-employee directors consisting of RSUs (including dividend equivalents paid with respect to such RSUs). RSU awards vest over a five-year period. RSUs granted before 2009 provide for settlement upon termination of service as a director and RSUs granted in 2009 and thereafter provide for settlement upon the earlier of the tenth anniversary of the grant date (or the tenth anniversary of the first vesting date, for RSUs granted in 2016-2018), or upon termination of service as a director. The award agreements also provide for optional vesting of a director’s RSUs in the event of the “Retirement” (as defined in the award agreement) of the subject non-employee director, if approved by the Compensation Committee in its discretion.

In February 2018, the Compensation Committee approved a grant of 6,000 RSUs to each of the non-employee directors. The Compensation Committee’s determination to award RSUs was in order to further align the interests of directors with the Company’s stockholders and also to provide additional value to directors for their contributions to the Company. In connection with her appointment as a director of the Company in October 2018, the Compensation Committee granted 3,000 RSUs to Ms. Malanoski.

 

Name   Fees
  Earned  
or Paid
    in Cash    
($)
  Stock
  Awards(1)    
($)
  Option
  Awards  
($)
  Non Equity
Incentive Plan
  Compensation  
($)
  Change in
  Pension Value  
and
Nonqualified
Deferred
Compensation
  All Other
  Compensatio  
n ($)
    Total  
($)

Leo Liebowitz

  155,000   149,220                   304,220

Milton Cooper

  42,500   149,220               191,720

Philip E. Coviello

  60,000   149,220                   209,220

Mary Lou

Malanoski

  10,625   81,000                   91,625

Richard E.

Montag

  47,500   149,220               196,720

Howard B.

Safenowitz

  105,000   149,220                   254,220

 

(1)

The Company granted 6,000 RSUs to each non-employee director in 2018, except for Ms. Malanoski, who was granted 3,000 RSUs in connection with her appointment as a director in October 2018. The fair value of these RSUs was determined based on the closing market price of Getty’s stock on the date of grant without consideration of the five-year vesting period of the restricted stock award. These RSUs provide for settlement, to the extent vested, upon the earlier of the tenth anniversary of the date of grant (or the tenth anniversary of the first vesting date, for RSUs granted in 2016-2018), or the termination of service from the Board of Directors. At December 31, 2018, Messrs. Cooper, Coviello, Liebowitz and Safenowitz each had 30,500 vested and 16,000 unvested RSUs outstanding, of which, in each case, 4,800 RSUs vested during the year ended December 31, 2018. At December 31, 2018, Mr. Montag had 25,500 vested and 16,000 unvested RSUs outstanding, of which 4,800 RSUs vested during the year ended December 31, 2018. At December 31, 2018, Ms. Malanoski had 3,000 unvested RSUs outstanding.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee for calendar year 2018 were Messrs. Cooper, Coviello, Montag and Safenowitz. There were no Compensation Committee interlocks to report in 2018.

 

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PROPOSAL NO. 2

ADVISORY (NON-BINDING) VOTE

ON EXECUTIVE COMPENSATION (SAY-ON-PAY)

(Item No.  2 on the Proxy Card)

Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, requires that our stockholders have the opportunity to cast an advisory (non-binding) vote on executive compensation, commonly referred to as a “Say-on-Pay” vote.

The affirmative vote of a majority of the votes cast at the Annual Meeting will be necessary to approve the advisory vote on executive compensation. For purposes of the advisory vote to approve the Named Executive Officer compensation, abstentions and broker non-votes are not considered votes cast and will have no effect on the outcome of this proposal.

The advisory vote on executive compensation is a non-binding vote on the compensation of our NEOs as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, set forth in this Proxy Statement. The Compensation Discussion and Analysis section starts on page 17 of this Proxy Statement. Please read the Compensation Discussion and Analysis section which provides a detailed discussion of our executive compensation program and compensation philosophy, including information about 2018 compensation of our NEOs. This advisory vote on executive compensation is not a vote on our general compensation policies, the compensation of our Board, or our compensation policies as they relate to risk management.

The vote solicited by this Proposal No. 2 is advisory and, therefore, is not binding on the Company, our Board or our Compensation Committee. The outcome of the vote will not require the Company, our Board or our Compensation Committee to take any action and will not be construed as overruling any decision by the Company, our Board or our Compensation Committee. Furthermore, because this non-binding, advisory vote primarily relates to the compensation of our NEOs that has already been paid or contractually committed, there is generally no opportunity for us to revisit these decisions. However, our Board, including our Compensation Committee, values the opinions of our stockholders, and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and evaluate what actions, if any, may be appropriate to address those concerns. Stockholders will be asked at the Annual Meeting to approve the following resolution pursuant to this Proposal No. 2:

RESOLVED, that the stockholders of Getty Realty Corp. approve, on an advisory basis, the Named Executive Officer compensation.

Recommendation

The Board of Directors unanimously recommends a vote “for” approval of the foregoing resolution. Proxies will be so voted unless stockholders specify otherwise in their proxies.

 

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REPORT OF THE AUDIT COMMITTEE

To Our Stockholders:

This report addresses our compliance with rules of the Securities and Exchange Commission (the “SEC”) and the listing standards of the New York Stock Exchange (the “NYSE”) designed to enhance audit committee effectiveness to improve public disclosure about the functioning of corporate audit committees and to enhance the reliability and credibility of financial statements of public companies.

Oversight Responsibilities

The Audit Committee of the Board of Directors of Getty Realty Corp., a Maryland corporation (the “Company”), is responsible for providing objective oversight of the Company’s financial accounting and reporting functions, system of internal control and audit process. The Audit Committee operates under a written charter adopted by the Board of Directors. A copy of the Audit Committee’s Charter is available on the Company’s website located at www.gettyrealty.com and is available in print to any shareholder who requests it.

The Company’s management is responsible for the Company’s system of internal control and its financial reporting process. The independent registered public accountants, PricewaterhouseCoopers LLP, are responsible for performing an independent integrated audit of the Company’s consolidated financial statements and its internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and to issue a report thereon. The Audit Committee is responsible for the monitoring and oversight of these processes.

Independence/Qualifications

The Board of Directors determined that for the year ended December 31, 2018 each member of the Audit Committee was “independent”, as such term is defined in the listing standards of the NYSE, and that each member who served on the Audit Committee for 2018 is “financially literate”, as such term is defined in the listing standards of the NYSE. The Board also determined that for the year ended December 31, 2018, Ms. Malanoski and Messrs. Coviello and Montag each qualified as an “audit committee financial expert” under the relevant rules of the SEC and each had the requisite accounting/financial management expertise required by the listing standards of the NYSE.

Sarbanes-Oxley Act Compliance

During the past year, the Audit Committee met regularly with management to assure that the Company’s internal control over financial reporting continued to meet applicable standards under the Sarbanes-Oxley Act and are compliant with the listing standards of the NYSE. The Company’s internal control over financial reporting was reviewed and tested by PricewaterhouseCoopers LLP, our independent auditors. Their report is included in our Annual Report on Form 10-K for the year ended December 31, 2018. At the Audit Committee meeting held on February 26, 2019, the Committee reviewed the Company’s internal control over financial reporting with management and PricewaterhouseCoopers LLP and determined that the Company is in compliance with the requirements applicable to it.

Financial Statements

With regard to our audited financial statements, the Audit Committee has:

(1) reviewed and discussed the audited financial statements with management and with PricewaterhouseCoopers LLP;

(2) discussed with PricewaterhouseCoopers LLP those matters required to be discussed under PCAOB standards, including those required by Auditing Standard No. 1301 (Communications with Audit Committees);

 

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(3) (a) received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence, and (b) discussed with PricewaterhouseCoopers LLP their independence; and

(4) based upon the review and discussions set forth in paragraphs (1) through (3) above, it was recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.

Prior to the filing with the SEC of each of the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2018, the Audit Committee Chairman or another member of the Audit Committee reviewed with the Company’s management and PricewaterhouseCoopers LLP the Company’s interim financial results to be included in such reports and the matters required to be discussed by Auditing Standard No. 1301.

The report of the Audit Committee should not be deemed incorporated by reference by any general statement incorporating this Proxy Statement by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or 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 should not otherwise be deemed filed under the Securities Act or the Exchange Act.

 

 

   

Audit Committee:

 
     

Philip E. Coviello (Chairman)

     

Mary Lou Malanoski

     

Richard E. Montag

     

Howard B. Safenowitz

 

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PROPOSAL NO. 3

RATIFICATION OF APPOINTMENT

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

(Item No. 3 on the Proxy Card)

On February 26, 2019, the Audit Committee appointed the firm of PricewaterhouseCoopers LLP (“PwC”), subject to ratification by the stockholders at the Annual Meeting, to audit the accounts of Getty with respect to our operations for the year ending December 31, 2019 and to perform such other services as may be required. Should PwC be unable to perform these services for any reason, the Audit Committee will appoint another independent registered public accounting firm to perform these services. As long as a quorum is present, a majority of votes cast at the Annual Meeting is necessary to ratify the appointment of the independent registered public accounting firm.

The Audit Committee’s Pre-Approval Policy requires pre-approval of services to be provided by PwC. The policy authorizes the Audit Committee to delegate to one or more of its members, and the Audit Committee has delegated to each of its members, authority to pre-approve non-audit services. Each member is required to report any pre-approval decisions to the Audit Committee at its next scheduled meeting. All of the non-audit services performed by PwC in 2017 and 2018 were pre-approved by the Audit Committee.

The fees payable to PwC, our independent registered public accounting firm, related to services provided for the years ended December 31, 2017 and 2018 were as follows:

 

         

2017

 

    

2018

 

 

  (a)

 

  

  Audit Fees(1)

    

 

$856,000

 

 

 

    

 

$880,000

 

 

 

  (b)

  

  Audit Related Fees (assurance and related services reasonably related to audit

     $166,000        $158,000  

  or review of financial statements not reported under (a)) (2)

     

  (c)

  

  Tax Fees (professional services for tax compliance, advice and planning)(3)

     $313,500        $290,000  

 

  (1)

Includes the aggregate fees and expenses estimated or billed for professional services rendered by PwC for the integrated audit of the Company’s annual consolidated financial statements for the year and of its internal control over financial reporting as of year-end and the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for the year.

 

  (2)

Represents fees for professional services rendered by PwC related to the comfort letters and other audit related services.

 

  (3)

Represents fees for federal and state tax compliance, planning and tax research.

Representatives of the firm of PwC 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.

Recommendation

The Board of Directors recommends that you vote “for” the proposal to ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019.

 

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DEADLINES FOR SUBMITTING STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER

STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING

Stockholder proposals to be considered for inclusion in next year’s Proxy Statement pursuant to Rule 14a-8 under the Exchange Act must be received by November 15, 2019. Any stockholder proposal or director nomination to be presented at the 2020 annual meeting that is not intended to be included in next year’s Proxy Statement will be considered untimely if we receive it before January 31, 2020 or after March 1, 2020. Such proposals and nominations also must be made in accordance with our Bylaws. An untimely proposal may be excluded from consideration at the 2020 annual meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16(a) of the Exchange Act and the rules issued thereunder, Getty’s officers and directors are required to file reports of ownership and changes in ownership of Getty equity securities with the SEC and the NYSE. As a matter of practice, our administrative staff assists our executive officers and directors in preparing initial ownership reports and reporting ownership changes, and typically files those reports on their behalf. Based solely on a review of the Forms 3, 4 and 5 filed with the SEC during 2018 and written representations provided by our directors and officers, Getty believes that during 2018 all of our 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 or postponements thereof, we intend to cast votes pursuant to the proxies with respect to such matters in accordance with the best judgment of the persons acting under the proxies.

Record holders may vote by returning the enclosed proxy card by mail or by attending the meeting and voting in person. The Notice of Internet Availability also instructs you how you may submit your proxy over the internet. If your shares are held in “street name”, which means they are held for your benefit in the name of a broker, bank or other intermediary, you will receive instructions from your broker, bank or other intermediary on how you can indicate the votes you wish to cast with respect to your shares. Please be aware that beneficial owners of shares held in “street name” may not vote their shares in person at the meeting unless they first obtain a written authorization to do so from their broker, bank or other intermediary and produce same at the Annual Meeting. Your proxy may be revoked at any time prior to it being exercised. Record holders may revoke their proxy by voting at the meeting or by submitting a new proxy, dated after the date of the proxy to be revoked, to the Secretary of the Company at the address on the first page of this Proxy Statement, prior to the Annual Meeting. If your shares are held in “street name”, you must contact your broker, bank or other intermediary for instructions on revoking your proxy. Brokerage houses and other custodians will be requested to forward solicitation material to beneficial owners of stock that they hold of record. We will reimburse brokerage houses, banks and custodians for their out of pocket expenses in forwarding proxy material to the beneficial owners. The cost of this solicitation, which will be effected by mail, will be borne by us.

 

  March 12, 2019

    
  

By Order of the Board of Directors,

  

/s/ JOSHUA DICKER        

  

Joshua Dicker

  

Executive Vice President, Secretary and General Counsel

 

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GETTY REALTY CORP.

ATTN: CHRISTOPHER J. CONSTANT

TWO JERICHO PLAZA

WING C, SUITE 110

JERICHO, NEW YORK 11753

  

VOTE BY INTERNET - www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on April 29, 2019 for shares held directly and by 11:59 P.M. Eastern Time on April 25, 2019 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

 

  

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

 

  

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on April 29, 2019 for shares held directly and by 11:59 P.M. Eastern Time on April 25, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.

 

  

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E65687-P21645                KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.            DETACH AND RETURN THIS PORTION ONLY

 

    

 

 

GETTY REALTY CORP.

 

                                                      
    The Board of Directors recommends you vote FOR the
election of each of the following nominees:
              
     
    1.    

  Election of Directors

 

                                  
       

Nominees

 

      

For

 

  

Withhold

 

                          
            

1a.  Christopher J. Constant

  

      The Board of Directors recommends you vote FOR
proposals 2 and 3.
    For     Against       Abstain       
   
       

1b.  Milton Cooper

        

2.    

 

  

ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY).

                    
   
       

1c.  Philip E. Coviello

         3.       

RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019.

                    
       

1d.  Leo Liebowitz

                  
   
       

1e.  Mary Lou Malanoski

         Note: And such other business as may properly come before the meeting or any adjournment thereof.             
   
       

1f.   Richard E. Montag

                        
   
       

1g.  Howard B. Safenowitz

                        
                                
   
   

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate

or partnership name by authorized officer.

                          
   
                                        
                   
                                                         
   
    Signature [PLEASE SIGN WITHIN BOX]       Date               Signature (Joint Owners)   Date         
                                                                                                      


Table of Contents

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

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E65688-P21645    

 

  

 

GETTY REALTY CORP.

Annual Meeting of Stockholders

April 30, 2019 3:30 PM

This proxy is solicited by the Board of Directors

 

The undersigned stockholder of Getty Realty Corp. hereby constitutes and appoints CHRISTOPHER J. CONSTANT and DANION FIELDING, and each of them, the true and lawful attorneys, agents and proxies of the undersigned, each with full power of substitution, to vote on all matters which may properly come before the 2019 Annual Meeting of Stockholders (or if only one shall be present and acting at the meeting then that one), all of the common 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 the offices of Arent Fox LLP, 1301 Avenue of the Americas, New York, New York 10019, on April 30, 2019 at 3:30 p.m., and any adjournment or postponement thereof.

 

This proxy will vote as the Board of Directors recommends where a choice is not specified.

       
  

 

 

Continued and to be signed on reverse side

 

    
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