GETTY REALTY CORP.

Charter of the Compensation Committee of the Board of Directors

Adopted February 19, 2004

 

This Compensation Committee Charter was adopted by the Board of Directors (the “Board”) of Getty Realty Corp. (the “Company”) on February 19, 2004.

 

I.          Purpose

The purpose of the Compensation Committee (the “Committee”) of the Board of the Company is (1) to discharge the Board’s responsibilities relating to compensation of the Company’s executives, including by designing (in consultation with management or the Board), recommending to the Board for approval and evaluating the compensation plans, policies and programs of the Company, and (2) to produce an annual report on executive compensation for inclusion in the Company’s proxy materials in accordance with applicable rules and regulations.  The Committee shall ensure that compensation programs are designed to encourage high performance, promote accountability and assure that employee interests are aligned with the interests of the Company’s stockholders.

In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws or otherwise permitted under Section 41 of the Maryland General Corporation Law.  The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion.  While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board.  To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.

The Committee shall determine, from time to time, the advisability of retaining a compensation consultant to assist in the evaluation of Chief Executive Officer or other executive officer compensation.  The Committee has the authority to retain, at Company expense, and terminate, a compensation consultant, including sole authority to approve the consultant's fees and other retention terms.

 

II.        Membership

The Committee shall be composed of at least three directors as determined by the Board, none of whom shall be an employee of the Company and each of whom shall (1) satisfy the independence requirements of the New York Stock Exchange, and (2) be a “non-employee director” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”).

The members of the Committee, including the Chair of the Committee, shall be appointed by the Board on the recommendation of the Nominating/Corporate Governance Committee.  Committee members may be removed from the Committee, with or without cause, by the Board. 

III.       Meetings and Procedures

The Chair (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings.  The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s bylaws that are applicable to the Committee.

The Committee shall meet on a regularly scheduled basis at least two times per year and more frequently as the Committee deems necessary or desirable. 

All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote.  The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the independent auditor, the internal auditor, any other financial personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate.  Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including but not limited to, any non-management director that is not a member of the Committee.

The Committee shall have the sole authority, as it deems appropriate, to retain and/or replace, as needed, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the Committee believes to be necessary or appropriate.  The Committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company.  The Company shall provide for appropriate funding, as determined by the Committee in its sole discretion, for payment of compensation to any such persons retained by the Committee.

The Chair shall report to the Board following meetings of the Committee and as otherwise requested by the Chairman of the Board.

IV.       Duties and Responsibilities

1.         The Committee shall, at least annually, review the compensation philosophy of the Company.

2.         The Committee shall, at least annually, review and approve corporate goals and objectives relating to the compensation of the chief executive officer, evaluate the performance of the chief executive officer in light of those goals and objectives and determine and approve the compensation of the chief executive officer based on such evaluation.  In determining any long-term incentive component of the chief executive officer’s compensation, the Committee shall consider the Company’s performance and relative stockholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards given to the Company’s chief executive officer in past years.  The Committee shall have sole authority to determine the chief executive officer’s compensation.

3.         The Committee shall, at least annually, review and approve all compensation for (x) all other officers (as such term is defined in Rule 16a-1 promulgated under the 1934 Act), and directors, and (y) all employees of the Company or its subsidiaries with a base salary greater than or equal to $150,000.

4.         The Committee shall make recommendations to the Board with respect to non-CEO compensation, incentive-compensation plans and equity-based plans and shall review and approve all officers’ employment agreements and severance arrangements.

5.         Following a review of the report to be prepared annually by senior management, the Committee will recommend to the Chairman of the Board any changes in non-management Director compensation.

6.         The Committee shall manage and annually review all annual bonus, incentive compensation, stock option and other equity-based compensation, employee pension and welfare benefit plans, and with respect to each plan shall have responsibility for:

                                          (i)            general administration;

                                        (ii)            setting performance targets under all annual bonus and long-term incentive compensation plans as appropriate and committing to writing any and all performance targets for all executive officers who may be “covered employees” under Section 162(m) of the Code within the first 90 days of the performance period to which such target relates or, if shorter, within the period provided by Section 162(m) of the Code in order for such target to be “pre-established” within the meaning of Section 162(m);

                                       (iii)            certifying that any and all performance targets used for any performance- based equity compensation plans have been met before payment of any executive bonus or compensation or exercise of any executive award granted under any such plan(s);

                                      (iv)            approving all amendments to, and terminations of, all compensation plans and any awards under such plans;

                                        (v)            granting any awards under any performance-based annual bonus, long-term incentive compensation and equity compensation plans to executive officers or current employees with the potential to become the CEO or an executive officer, including stock options and other equity rights (e.g., restricted stock, restricted stock units, stock purchase rights);

                                      (vi)            approving which executive officers are entitled to awards under the Company’s plans; and

                                     (vii)            repurchasing securities from terminated employees.

All annual plan reviews should include reviewing the plan’s administrative costs, reviewing current plan features relative to any proposed new features, and assessing the performance of the plan’s internal and external administrators if any duties have been delegated.

7.         The Committee shall establish and periodically review policies concerning perquisite benefits.

            8.         The Committee shall periodically review the need for a Company policy regarding compensation paid to the Company’s executive officers in excess of limits deductible under Section 162(m) of the Code.

9.         The Committee shall determine the Company’s policy with respect to change of control or “parachute” payments.

10.       The Committee shall manage and review executive officer and director indemnification and insurance matters.

11.       The Committee shall manage, review, and approve, and submit to the Audit Committee for approval, any employee loans in an amount equal to or greater than $25,000.

12.       The Committee shall prepare and approve the Compensation Committee report to be included as part of the Company’s annual proxy statement (the “Proxy Statement Report”).

            13.       The Committee shall evaluate its own performance on an annual basis, including its compliance with this Charter, and provide any written material with respect to such evaluation to the Board, including any recommendations for changes in procedures or policies governing the Committee.  The Committee shall conduct such evaluation and review in such manner as it deems appropriate.

14.       The Committee shall review and reassess this Charter at least annually and submit any recommended changes to the Board for its consideration.

V.        Delegation of Duties

In fulfilling its responsibilities, to the extent permitted by Maryland Law, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee, or to an officer of the Company, except that it shall not delegate its responsibilities set forth in paragraphs 3, 5 and 6 of Section IV above or for any matters that involve executive compensation or any matters where it has determined such compensation is intended to comply with Section 162(m) of the Code by virtue of being approved by a committee of “outside directors” or is intended to be exempt from Section 16(b) under the 1934 Act pursuant to Rule 16b-3 by virtue of being approved by a committee of “non-employee directors.”

 

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