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Corporate Governance Guidelines of the Board of Directors

Adopted February 19, 2004


The Board of Directors (the “Board”) of Getty Realty Corp. (the “Company”) has adopted the following Corporate Governance Guidelines (the “Guidelines”) to assist the Board in the exercise of its responsibilities and to serve the interests of the Company and its stockholders.  These Guidelines should be interpreted in the context of all applicable laws and the Company’s Articles of Incorporation, Bylaws and other corporate governance documents.  These Guidelines acknowledge the leadership exercised by the Board’s standing committees and their chairs and are intended to serve as a flexible framework within which the Board may conduct its business and not as a set of legally binding obligations.  Subject to applicable laws and regulations, the Guidelines are subject to modification from time to time by the Board as the Board may deem appropriate in the best interests of the Company and its stockholders or as required by applicable laws and regulations. 


These Guidelines are available on the Company’s website at “www.gettyrealty.com” and to any stockholder who otherwise requests a copy. The Company’s Annual Report on Form 10-K will state the foregoing. 


The Board


Size of the Board


The Company’s Articles of Incorporation and Bylaws provide that the number of directors will be fixed from time to time by the Board, but in no event will be less than the number required by the Maryland General Corporation Law nor more than fifteen (15).  The Board currently has five (5) members.  The Board believes that five (5) directors is an appropriate size based on the Company’s present circumstances.  The Nominating/Corporate Governance Committee will periodically review the size of the Board, and determine the size that is most effective in relation to future operations.


Independence of the Board


The Board will be comprised of a majority of directors who qualify as independent directors (the “Independent Directors”) under the listing standards of the New York Stock Exchange (the “NYSE”).  No more than two (2) management executives who are employed by the Company or who were employed by the Company in the previous three (3) years may serve on the Board at the same time.


The Nominating/Corporate Governance Committee will review annually the relationships that each director has with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).  Following such annual review, only those directors who the Board affirmatively determines have no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) will be considered Independent Directors, subject to additional qualifications prescribed under the listing standards of the NYSE.  The basis for any determination that a relationship is not material will be published in the Company’s annual proxy statement or, if the Company does not file an annual proxy statement, in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission.


Separate Sessions of Non-Management Directors and Independent Directors


The non-management Directors will meet in executive session without management directors or management present on a periodic basis, but no less than two (2) times a year.  The Audit Committee chair, unless and until otherwise disclosed in the Company’s annual proxy statement, will chair such meetings.  The name of the chair of such meetings will be disclosed in the Company’s annual proxy statement along with a means for stockholders to communicate with the non-management Directors.  The non-management Directors will review the Company’s implementation of and compliance with its Guidelines and consider such matters as they may deem appropriate at such meetings.  Non-management Directors are all Directors who are not company officers (as that term is defined in Rule 16a-1(f) under the Securities Act of 1933), including such Directors who are not independent by virtue of a material relationship, former status or family membership, or for any other reason. 


In addition, if the non-management Directors include Directors who are not also Independent Directors, the Independent Directors shall also meet separately at least once per year in executive session.


Director Qualification Standards


The Nominating/Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the appropriate characteristics, skills and experience required for the Board as a whole and its individual members.  In evaluating the suitability of individual candidates (both new candidates and current Board members), the Nominating/Corporate Governance Committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, take into account many factors, including ability to make independent analytical inquiries, general understanding of marketing, finance and other elements relevant to the success of a publicly-traded company in today’s business environment, experience in the Company’s industry and with relevant social policy concerns, understanding of the Company's business on a technical level, other board service and educational and professional background. Each candidate nominee must also possess fundamental qualities of intelligence, honesty, good judgment, high ethics and standards of integrity, fairness and responsibility.  The Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. In determining whether to recommend a director for re-election, the Nominating/Corporate Governance Committee also considers the director’s past attendance at meetings and participation in and contributions to the activities of the Board.


Selection of New Directors


The entire Board will stand for election by the stockholders of the Company each year at the Company’s annual meeting.  Each year, at the annual meeting, the Board will recommend a slate of directors for election by the stockholders.  In accordance with the Bylaws of the Company, the Board will also be responsible for filling vacancies or newly-created directorships on the Board that may occur between annual meetings of stockholders.  The Nominating/Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the entire Board for Board membership.


Selection of Chairman of the Board


The Board will select the Chairman of the Board in accordance with the Company’s Bylaws.


No Specific Limitation on Other Board Service


The Board does not believe that its members should be prohibited from serving on boards of other organizations and has not adopted any guidelines limiting such activities, except with respect to members serving on the Audit Committee, as described below.  However, the Nominating/Corporate Governance Committee and the Board will take into account the nature of and time involved in a director’s service on other boards and/or committees in evaluating the suitability of individual director candidates and current directors and making its recommendations to the Company’s stockholders. 


Due to the demanding nature of service on the Audit Committee, the members of the Audit Committee may not serve on the audit committees of the boards of directors of more than two other companies at the same time as they are serving on the Audit Committee.


Service on other boards and/or committees should be consistent with the Company’s conflict of interest policies set forth below.


Directors Who Resign Their Current Positions With The Company


When a director, including any director who is currently an officer or employee of the Company, resigns or materially changes his or her position with his or her employer, such director should submit his or her resignation to the Board, which the Board may accept or reject based on the recommendation of the Nominating/Corporate Governance Committee.


Term Limits


As each director is subject to election by stockholders on an annual basis, the Board does not believe it is in the best interests of the Company to establish term limits at this time.  Additionally, such term limits may cause the Company to lose the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company’s business and therefore can provide an increasingly significant contribution to the Board.


Director Responsibilities


The business and affairs of the Company will be managed by or under the direction of the Board, including through one or more of its committees as set forth in the Bylaws and committee charters.  Each director is expected to spend the time and effort necessary to properly discharge his or her responsibilities. These include:



  1. overseeing the conduct of the Company's business, to evaluate whether the business is being properly managed;

  2. reviewing and, where appropriate, approving the Company's major financial objectives, plans and actions;

  3. reviewing and, where appropriate, approving major changes to, and determinations of other major issues respecting, the appropriate auditing and accounting principles and practices to be used in the preparation of the Company's financial statements;

  4. reviewing and, where appropriate, approving major changes to, and determinations under these Guidelines, the Company’s Business Conduct Guidelines, Board committee charters and other Company policies;  

  5. reviewing and, where appropriate, approving actions to be undertaken by the Company that would result in a material change in the financial structure or control of the Company, the acquisition or disposition of any businesses or asset(s) material to the Company or the entry of the Company into any major new line of business;

  6. with respect to the Independent Directors, and as directed by the Board, together with the Compensation Committee, regularly evaluating the performance and approving the compensation of the Chief Executive Officer;

  7. with the input of the Chief Executive Officer and the Compensation Committee, regularly evaluating the performance of principal senior executives;

  8. planning for succession with respect to the position of Chief Executive Officer and monitoring management's succession planning for other key executives; and

  9. ensuring that the Company’s business is conducted with the highest standards of ethical conduct and in conformity with applicable laws and regulations.

Compensation


The Company’s executive officers shall not receive additional compensation for their service as Directors.  Senior management of the Company will report once a year to the Compensation Committee regarding the status of the Company’s non-management Director compensation in relation to other U.S. companies of comparable size and the Company’s competitors.  Such report will include consideration of both direct and indirect forms of compensation to the Company’s non-management Directors, including any charitable contributions by the Company to organizations in which a non-management Director is involved.  Following a review of the report, the Compensation Committee will recommend any changes in non-management Director compensation to the Chairman of the Board, which changes will be approved or disapproved by the Board after a full discussion.


Director fees are the sole form of compensation that members of the Audit Committee may receive from the Company.


Stock Ownership


The Company encourages directors to purchase shares of the Company’s stock.  However, the number of shares of the Company’s stock owned by any director is a personal decision and, at this time, the Board has chosen not to adopt a policy requiring ownership by directors of a minimum number of shares.


Conflicts of Interest


Directors are expected to avoid any action, position or interest that conflicts with the interests of the Company or gives the appearance of a conflict.  If an actual or potential conflict of interest develops, the director should immediately report the matter to the Company’s General Counsel and to the Audit Committee Chairman.  Any significant conflict must be resolved as expeditiously as possible.  If a director has a personal interest in a matter before the Board, the director will disclose the interest to the Board, excuse himself or herself from discussion on the matter and not vote on the matter. 


Board Orientation and Continuing Education of Board Members


The Company provides new directors with a director orientation program to familiarize them with, among other things, the Company’s business, strategic plans, significant financial, accounting and management issues, compliance programs, conflicts policies, Business Conduct Guidelines, these Guidelines, principal officers, internal auditors and independent auditors.


The Company will make available to directors continuing education programs, and each director is expected to participate in such programs, as management or the Board determines desirable. 


Interaction with Institutional Investors, the Press and Customers


The Board believes that management speaks for the Company.  Each director should refer all inquiries from institutional investors, the press or customers to management.  Individual Board members may, from time to time at the request of the management, meet or otherwise communicate with various constituencies that are involved with the Company.  If comments from the Board are appropriate, they should, in most circumstances, come from the Chairman of the Board.


Board Access to Senior Management


The Board will have complete access to Company management in order to ensure that directors can ask any questions and receive all information necessary to perform their duties.  Directors should exercise judgment to ensure that their contact with management does not distract managers from their jobs or disturb the business operations of the Company.  Such contact, if in writing, should be copied to the Chief Executive Officer of the Company.


Board Access to Independent Advisors


The Board committees may hire independent advisors as set forth in their applicable charters.  The Board as a whole shall have access to such advisors and such other independent advisors that the Company retains or that the Board considers necessary to discharge its responsibilities. 


Annual Self-Evaluation


Following the end of each fiscal year, the Nominating/Corporate Governance Committee will oversee an annual assessment by the Board of the Board's performance.  The Nominating/
Corporate Governance Committee will be responsible for establishing the evaluation criteria and implementing the process for such evaluation, as well as considering other corporate governance principles that may, from time to time, merit consideration by the Board. 


The assessment should include a review of any areas in which the Board or management believes the Board can make a better contribution to the governance of the Company, as well as a review of the committee structure and an assessment of the Board’s compliance with the principles set forth in these Guidelines. The purpose of the review will be to improve the performance of the Board as a unit, and not to target the performance of any individual Board member. The Nominating/Corporate Governance Committee will utilize the results of the Board evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board.


Board Meetings


Frequency of Meetings


The Board will meet at least four (4) times annually.  In addition, special meetings may be called from time to time as determined by the needs of the business.  It is the responsibility of the directors to attend meetings.


Director Attendance


A director is expected to spend the time and effort necessary to properly discharge his or her responsibilities.  Accordingly, a director is expected to regularly prepare for and attend meetings of the Board and all committees on which the director sits (including separate meetings of non-management Directors and the Independent Directors), with the understanding that, on occasion, a director may be unable to attend a meeting.  A director who is unable to attend a meeting is expected to notify the Chairman of the Board or the Chairman of the appropriate committee in advance of such meeting, and, whenever possible, participate in such meeting via teleconference.


Attendance of Non-Directors


The Board encourages the Chairman of the Board or of any committee to bring Company management and outside advisors or consultants from time to time into Board and/or committee meetings to (i) provide insight into items being discussed by the Board which involve the manager, advisor or consultant, (ii) make presentations to the Board on matters which involve the manager, advisor or consultant, and (iii) bring managers with senior management potential into contact with the Board.  Attendance of non-directors at Board meetings is at the discretion of the Board.


Agendas


The Chairman establishes the agenda for each Board meeting with input from the management and, as necessary or desired, from the other directors. 


Advance Receipt of Meeting Materials


Information regarding the topics to be considered at a meeting is essential to the Board’s understanding of the business and the preparation of the directors for a productive meeting.  To the extent feasible, the meeting agenda and any written materials relating to each Board meeting will be distributed to the directors sufficiently in advance of each meeting to allow for meaningful review of such agenda and materials by the directors.  Directors are expected to have reviewed and be prepared to discuss all materials distributed in advance of any meeting.   


Committee Matters


Number, Name, Responsibilities and Independence of Committees


The Board currently has three committees, each composed entirely of Independent Directors.  From time to time, the Board may form a new committee or disband a current committee, depending upon the circumstances.  Each committee will perform its duties as assigned by the Board in compliance with the Company’s Bylaws and the committee’s charter.


The current committees are:



  1. Audit Committee. The Audit Committee consists of at least two (2) members and reviews the work of the Company’s internal accounting and audit processes and independent auditors.  The committee, among other things, also has sole authority to appoint and fire the Company’s independent auditorsand to approve any significant non-audit relationship with the independent auditors.

  2. Compensation Committee. The Compensation Committee consists of at least two (2) members and reviews and approves the Company’s goals and objectives relevant to compensation, stays informed as to market levels of compensation and, based on evaluations submitted by management, establishes the compensation of Chief Executive Officer and recommends to the Board compensation levels and systems for Board members and officers and senior management employees other than the Chief Executive Officer that correspond to the Company’s goals and objectives.  The committee, among other things, also produces an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.

  3. Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee consists of at least three (3) members and is responsible for recommending to the Board individuals to be nominated as directors and committee members.  This includes evaluation of new candidates (including candidates proposed by shareholders) as well as evaluation of current directors. This committee, among other things, also is responsible for developing and recommending to the Board the Guidelines, as well as reviewing and recommending revisions to these Guidelines on a regular basis.  This committee also performs other duties as are described in these Guidelines and prepares any disclosure of the nominating process required by applicable rules and regulations.

Assignment and Rotation of Committee Members


Based on the recommendations of the Nominating/Corporate Governance Committee, the Board appoints committee members and committee chairs according to criteria set forth in the applicable committee charter and such other criteria that the Board determines to be appropriate in light of the responsibilities of each committee.  Committee membership and the position of committee chair will not be rotated on a mandatory basis unless the Board determines that rotation is in the best interest of the Company.


Each member of the Audit Committee must satisfy the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934 and must be financially literate, as determined by the Board in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment, and at least one member of the Audit Committee must have accounting or related financial management expertise as determined by the Board in its business judgment.  In addition, at least one member of the Audit Committee must meet the definition of “audit committee financial expert” as determined by the Board in its business judgment in accordance with Item 401(h) of Regulation S-K.


Frequency of Committee Meetings


Each committee other than the Audit Committee will meet at least two (2) times annually; the Audit Committee will meet at least once per quarter.  In addition, special meetings may be called by the Chairman of the committee from time to time as determined by the needs of the business.  It is the responsibility of the directors to attend the meetings of the committees on which they serve.


Committee Agendas


The Chairman of each committee, in consultation with the appropriate members of the Committee, will develop his or her committee's agenda.


Committee Self-Evaluations


Following the end of each fiscal year, each committee will review its performance and charter and recommend to the Board any changes it deems necessary.


Leadership Development


Annual Review of Chief Executive Officer


The Compensation Committee, at least annually, shall 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 Compensation 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 Compensation Committee shall have sole authority to determine the Chief Executive Officer’s compensation.  The results of the review and evaluation shall be communicated to the Chief Executive Officer by the Chairman of the Compensation Committee.


Succession Planning


The Nominating/Corporate Governance Committee works on a periodic basis with the Chief Executive Officer to develop, review, maintain and revise, if necessary, the Company’s succession plan upon the retirement of the Chief Executive Officer and each other officer of the Company and in the event of an unexpected occurrence.  The Chief Executive Officer shall report annually to the Board on succession planning for the Chief Executive Officer and senior management positions, including a discussion of assessments, leadership development plans and other relevant factors.  There should also be available to the Nominating/Corporate Governance Committee, on a continuing basis, the Chief Executive Officer’s recommendations regarding his or her successor should he or she be unexpectedly disabled.


Management Development


The Board will determine that a satisfactory system is in effect for the education, development and orderly succession of senior and mid-level managers throughout the Company.