<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
========
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 21, 1997
=================
Realty Income Corporation
=========================
(Exact name of registrant as specified in its charter)
Maryland
========
(State of Incorporation)
1-13318
=======
(Commission File Number)
33-0580106
==========
(IRS Employer Identification Number)
220 West Crest Street, Escondido, California 92025
===================================================
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (760)741-2111
=============
Not Applicable
==============
(Former name or former address, if changes since last report)
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ITEM 5. OTHER EVENTS
=====================
On November 13, 1997, an indemnification agreement was executed
between the Registrant and each executive officer of the
Registrant.
On November 13, 1997, an indemnification agreement was executed
between the Registrant and each director on the board of
directors of the Registrant.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
==========================================
The following exhibits are filed with this report.
<TABLE>
<CAPTION>
<S> <C>
Exhibit No. Description
- ----------- -----------
10.1 Form of indemnification agreement entered into
between the Registrant and each executive officer
of the Registrant
10.2 Form of indemnification agreement entered into
between the Registrant and each director on the
board of directors of the Registrant
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
REALTY INCOME CORPORATION
<TABLE)
[S] [C]
(Signature and Title) /s/ MICHAEL R. PFEIFFER
Date: November 21, 1997 ------------------------
Michael R. Pfeiffer
Senior Vice President,
General Counsel and
Secretary
[/TABLE]
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
=========== =========== ====
<S> <C> <C>
10.1 Form of indemnification agreement entered
into between the Registrant and each
executive officer of the Registrant..........4-12
10.2 Form of indemnification agreement entered
into between the Registrant and each
director on the board of directors of the
Registrant..................................13-22
</TABLE>
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<PAGE>
EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into this
13th day of November, 1997 ("Agreement"), by and between Realty
Income Corporation, a Maryland corporation (the "Company"), and
_______________ ("Indemnitee").
WHEREAS, at the request of the Company, Indemnitee currently
serves as an officer of the Company and may, therefore, be
subjected to claims, suits or proceedings arising as a result of
his service; and
WHEREAS, as an inducement to Indemnitee to continue to serve
as such officer, the Company has agreed to indemnify and to
advance Expenses to Indemnitee in connection with any Proceeding,
to the fullest extent permitted by law; and
WHEREAS, the parties by this Agreement desire to set forth
their agreement regarding indemnification;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control
of the Company occurring after the Effective Date of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934 (the "Act"), whether or not the
Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the Effective Date (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining
such percentage interest; (ii) there occurs a proxy contest, or
the Company is a party to a merger, consolidation, sale of
assets, plan of liquidation or other reorganization not approved
by at least two-thirds of the members of the Board of Directors
then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or
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event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (a)(ii) of
this Section 1, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose
any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
(b) "Corporate Status" means the status of a person
who is or was a director, trustee, officer, employee or agent of
the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which
such person is or was serving at the request of the Company.
(c) "Effective Date" means November 13, 1997.
(d) "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery
service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or
being or preparing to be a witness in a Proceeding.
(e) "Independent Counsel" means a law firm, or a
member of a law firm, selected by the Board of Directors by vote
as set forth in Section 8(b), that is experienced in matters of
corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii)
any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
(f) "Proceeding" includes any action, suit,
arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative, except
one (i) initiated by an Indemnitee pursuant to Section 10 of this
Agreement to enforce his rights under this Agreement or (ii)
pending on or before the Effective Date.
Section 2. Services by Indemnitee. Indemnitee agrees to
serve as an officer of the Company and may at any time and for
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any reason resign from such position (subject to any other
contractual obligation or any obligation imposed by operation of
law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.
Section 3. Indemnification - General. The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided in
this Agreement and (b) to the fullest extent permitted by
Maryland law in effect on the date hereof and as amended from
time to time; provided, however, that no change in Maryland law
shall have the effect of reducing the benefits available to
Indemnitee hereunder based on Maryland law as in effect on the
date hereof. The rights of Indemnitee provided in this Section 3
shall include, but shall not be limited to, the rights set forth
in the other sections of this Agreement.
Section 4. Proceedings Other Than Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the rights
of indemnification provided in this Section 4 if, by reason of
his Corporate Status, he is, or is threatened to be, made a party
to any threatened, pending, or completed Proceeding, other than a
Proceeding by or in the right of the Company. Pursuant to this
Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in
connection with a Proceeding by reason of his Corporate Status
unless it is established that (i) the act or omission of the
Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the
result of active and deliberate dishonesty, (ii) the Indemnitee
actually received an improper personal benefit in money, property
or services, or (iii) in the case of any criminal Proceeding, the
Indemnitee had reasonable cause to believe or should have
believed that his conduct was unlawful.
Section 5. Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 5 if, by reason of his Corporate Status,
he is made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 5, Indemnitee
shall be indemnified against all amounts paid in settlement and
all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding unless it is
established that (i) the act or omission of the Indemnitee was
material to the matter giving rise to such a Proceeding and (a)
was committed in bad faith or (b) was the result of active and
deliberate dishonesty or (ii) the Indemnitee actually received an
improper personal benefit in money, property or services.
Section 6. Indemnification for Expenses of a Party Who is
Wholly or Partly Successful. Notwithstanding any other provision
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of this Agreement, to the extent that Indemnitee is, by reason of
his Corporate Status, made a party to and is successful, on the
merits or otherwise, in the defense of any Proceeding, he shall
be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee under this Section 6 against
all Expenses actually and reasonably incurred by him or on his
behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
Section 7. Advancement of Expenses. The Company shall
advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding to which Indemnitee
is, or is threatened to be, made a party, within ten days after
the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law
and by this Agreement has been met and a written undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it
shall ultimately be determined that such standard of conduct has
not been met or as required by Section 6 if Indemnitee is
actually or partly unsuccessful.
Section 8. Procedure for Determination of Entitlement to
Indemnification.
(a) To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information
as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 8(a)
hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall promptly be
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made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have
occurred, (A) by a majority vote of a quorum of the Board of
Directors, or (B) if a quorum of the Board of Directors is not
obtainable or, even if obtainable, such quorum so directs, by
Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee, or
(C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company; and, if it is so
determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten days after such
determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to
Indemnitee's entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request
any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. Any costs or Expenses (including reasonable
attorneys' fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification)
and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
Section 9. Presumptions and Effect of Certain Proceedings.
(a) If a Change of Control shall have occurred, in
making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a) of
this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any
determination contrary to that presumption.
(b) The termination of any Proceeding by judgment,
order, settlement, conviction, a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to
judgment, does not create a presumption that the Indemnitee did
not meet the requisite standard of conduct described herein for
indemnification.
Section 10. Remedies of Indemnitee.
(a) If (i) a determination is made pursuant to
Section 8 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of
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Expenses is not timely made pursuant to Section 8 of this
Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 8(b) of
this Agreement within 90 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is
not made pursuant to Section 6 of this Agreement within ten days
after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten days after
a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication
in an appropriate court of the State of Maryland, or in any other
court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. Alternatively,
Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the commercial
Arbitration Rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding
pursuant to this Section 9(a); provided, however, that the
foregoing clause shall not apply in respect of a proceeding
brought by Indemnitee to enforce his rights under Section 6 of
this Agreement.
(b) If a Change of Control shall have occurred, in
any judicial proceeding or arbitration commenced pursuant to this
Section 10 the Company shall have the burden of proving that
Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
(c) If a determination shall have been made
pursuant to Section 8(b) of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary
to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification.
(d) In the event that Indemnitee, pursuant to this
Section 9, seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages
for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he
prevails therein. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of
Expenses sought, the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall
be appropriately prorated.
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Section 11. Non-Exclusivity; Survival of Rights; Insurance;
Subrogation.
(a) The rights of indemnification and advancement
of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the charter or Bylaws of the
Company, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any
action taken or omitted by such Indemnitee in his Corporate
Status prior to such amendment, alteration or repeal.
(b) To the extent that the Company maintains an
insurance policy or policies providing liability insurance for
directors, officers, employees, or agents of the Company or of
any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person
serves at the request of the Company, Indemnitee shall be covered
by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such
director, officer, employee or agent under such policy or
policies.
(c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to
secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such
rights.
(d) The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy,
contract, agreement or otherwise.
Section 12. Duration of Agreement. This Agreement shall
continue until and terminate ten years after the date that
Indemnitee shall have ceased to serve as a director, trustee,
officer, employee, or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which Indemnitee served at the request
of the Company; provided, that the rights of Indemnitee hereunder
shall continue until the final termination of any Proceeding then
pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 10 of this
Agreement relating thereto. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the
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benefit of Indemnitee and his heirs, executors and
administrators.
Section 13. Severability. If any provision or provisions
of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.
Section 14. Exception to Right of Indemnification or
Advancement of Expenses. Notwithstanding any other provision of
this Agreement, Indemnitee shall not be entitled to
indemnification or advancement of Expenses under this Agreement
with respect to any Proceeding brought by Indemnitee, unless the
bringing of such Proceeding or making of such claim shall have
been approved by the Board of Directors.
Section 15. Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original but all of which together
shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this
Agreement.
Section 16. Headings. The headings of the paragraphs of
this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the
construction thereof.
Section 17. Modification and Waiver. No supplement,
modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 18. Notice by Indemnitee. Indemnitee agrees
promptly to notify the Company in writing upon being served with
any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or
matter which may be subject to indemnification or advancement of
Expenses covered hereunder.
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Section 19. Notices. All notices, requests, demands and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if (i) delivered by hand and
receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to Indemnitee, to: The address set forth in
the signature pages hereto.
(b) If to the Company to:
Realty Income Corporation
220 West Crest Street
Escondido, California 92025
Attn: General Counsel
or to such other address as may have been furnished to Indemnitee
by the Company or to the Company by Indemnitee, as the case may
be.
Section 20. Governing Law. The parties agree that this
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland.
Section 21. Miscellaneous. Use of the masculine pronoun
shall be deemed to include usage of the feminine pronoun where
appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
ATTEST: REALTY INCOME CORPORATION
______________________________By:__________________________(SEAL)
Michael R. Pfeiffer, Secretary Richard J. VanDerhoff, President
WITNESS: INDEMNITEE
_____________________________ ________________________________
Name:
Address:
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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into this
13th day of November, 1997 ("Agreement"), by and between Realty
Income Corporation, a Maryland corporation (the "Company"), and
_______________ ("Indemnitee").
WHEREAS, at the request of the Company, Indemnitee currently
serves as a director of the Company and may, therefore, be
subjected to claims, suits or proceedings arising as a result of
his service; and
WHEREAS, as an inducement to Indemnitee to continue to serve
as such director, the Company has agreed to indemnify and to
advance Expenses to Indemnitee in connection with any Proceeding,
to the fullest extent permitted by law; and
WHEREAS, the parties by this Agreement desire to set forth
their agreement regarding indemnification;
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control
of the Company occurring after the Effective Date of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934 (the "Act"), whether or not the
Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall
be deemed to have occurred if after the Effective Date (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining
such percentage interest; (ii) there occurs a proxy contest, or
the Company is a party to a merger, consolidation, sale of
assets, plan of liquidation or other reorganization not approved
by at least two-thirds of the members of the Board of Directors
then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or
event constitute less than a majority of the Board of Directors
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thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (a)(ii) of
this Section 1, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose
any new director whose election or nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
(b) "Corporate Status" means the status of a person
who is or was a director, trustee, officer, employee or agent of
the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which
such person is or was serving at the request of the Company.
(c) "Disinterested Director" means a director of
the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.
(d) "Effective Date" means November 13, 1997.
(e) "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery
service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or
being or preparing to be a witness in a Proceeding.
(f) "Independent Counsel" means a law firm, or a
member of a law firm, selected by the board of directors by vote
as set forth in Section 8(b), that is experienced in matters of
corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii)
any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
(g) "Proceeding" includes any action, suit,
arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative, except
one (i) initiated by an Indemnitee pursuant to Section 10 of this
Agreement to enforce his rights under this Agreement or (ii)
pending on or before the Effective Date.
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Section 2. SERVICES BY INDEMNITEE. Indemnitee agrees to
serve as a director of the Company and may at any time and for
any reason resign from such position (subject to any other
contractual obligation or any obligation imposed by operation of
law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.
Section 3. INDEMNIFICATION - GENERAL. The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided in
this Agreement and (b) to the fullest extent permitted by
Maryland law in effect on the date hereof and as amended from
time to time; PROVIDED, HOWEVER, that no change in Maryland law
shall have the effect of reducing the benefits available to
Indemnitee hereunder based on Maryland law as in effect on the
date hereof. The rights of Indemnitee provided in this Section 3
shall include, but shall not be limited to, the rights set forth
in the other sections of this Agreement.
Section 4. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE
RIGHT OF THE COMPANY. Indemnitee shall be entitled to the rights
of indemnification provided in this Section 4 if, by reason of
his Corporate Status, he is, or is threatened to be, made a party
to any threatened, pending, or completed Proceeding, other than a
Proceeding by or in the right of the Company. Pursuant to this
Section 4, Indemnitee shall be indemnified against all Expenses,
judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in
connection with a Proceeding by reason of his Corporate Status
unless it is established that (i) the act or omission of the
Indemnitee was material to the matter giving rise to the
Proceeding and (a) was committed in bad faith or (b) was the
result of active and deliberate dishonesty, (ii) the Indemnitee
actually received an improper personal benefit in money, property
or services, or (iii) in the case of any criminal Proceeding, the
Indemnitee had reasonable cause to believe or should have
believed that his conduct was unlawful.
Section 5. PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 5 if, by reason of his Corporate Status,
he is made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 5, Indemnitee
shall be indemnified against all amounts paid in settlement and
all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding unless it is
established that (i) the act or omission of the Indemnitee was
material to the matter giving rise to such a Proceeding and (a)
was committed in bad faith or (b) was the result of active and
deliberate dishonesty or (ii) the Indemnitee actually received an
improper personal benefit in money, property or services.
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Section 6. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS
WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is, by reason of
his Corporate Status, made a party to and is successful, on the
merits or otherwise, in the defense of any Proceeding, he shall
be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee under this Section 6 against
all Expenses actually and reasonably incurred by him or on his
behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
Section 7. ADVANCEMENT OF EXPENSES. The Company shall
advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding to which Indemnitee
is, or is threatened to be, made a party, within ten days after
the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law
and by this Agreement has been met and a written undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it
shall ultimately be determined that such standard of conduct has
not been met or as required by Section 6 if Indemnitee is
actually or partly unsuccessful.
Section 8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
(a) To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information
as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that Indemnitee has
requested indemnification.
(b) Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 8(a)
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hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall promptly be
made in the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have
occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter
defined), or (B) if a quorum of the Board of Directors consisting
of Disinterested Directors is not obtainable or, even if
obtainable, such quorum of Disinterested Directors so directs, by
Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee, or
(C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company; and, if it is so
determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten days after such
determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to
Indemnitee's entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request
any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such
determination. Any costs or Expenses (including reasonable
attorneys' fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification)
and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
Section 9. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) If a Change of Control shall have occurred, in
making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a) of
this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any
determination contrary to that presumption.
(b) The termination of any Proceeding by judgment,
order, settlement, conviction, a plea of NOLO CONTENDERE or its
equivalent, or an entry of an order of probation prior to
judgment, does not create a presumption that the Indemnitee did
not meet the requisite standard of conduct described herein for
indemnification.
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Section 10. REMEDIES OF INDEMNITEE.
(a) If (i) a determination is made pursuant to
Section 8 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 8 of this
Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 8(b) of
this Agreement within 90 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is
not made pursuant to Section 6 of this Agreement within ten days
after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten days after
a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication
in an appropriate court of the State of Maryland, or in any other
court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. Alternatively,
Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the commercial
Arbitration Rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding
pursuant to this Section 9(a); PROVIDED, HOWEVER, that the
foregoing clause shall not apply in respect of a proceeding
brought by Indemnitee to enforce his rights under Section 6 of
this Agreement.
(b) If a Change of Control shall have occurred, in
any judicial proceeding or arbitration commenced pursuant to this
Section 10 the Company shall have the burden of proving that
Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
(c) If a determination shall have been made
pursuant to Section 8(b) of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary
to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification.
(d) In the event that Indemnitee, pursuant to this
Section 9, seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages
for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he
prevails therein. If it shall be determined in such judicial
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adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of
Expenses sought, the Expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall
be appropriately prorated.
Section 11. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE;
SUBROGATION.
(a) The rights of indemnification and advancement
of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the charter or Bylaws of the
Company, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any
action taken or omitted by such Indemnitee in his Corporate
Status prior to such amendment, alteration or repeal.
(b) To the extent that the Company maintains an
insurance policy or policies providing liability insurance for
directors, officers, employees, or agents of the Company or of
any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person
serves at the request of the Company, Indemnitee shall be covered
by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such
director, officer, employee or agent under such policy or
policies.
(c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to
secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such
rights.
(d) The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy,
contract, agreement or otherwise.
Section 12. DURATION OF AGREEMENT. This Agreement shall
continue until and terminate ten years after the date that
Indemnitee shall have ceased to serve as a director, trustee,
officer, employee, or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which Indemnitee served at the request
of the Company; PROVIDED, that the rights of Indemnitee hereunder
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shall continue until the final termination of any Proceeding then
pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 10 of this
Agreement relating thereto. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and his heirs, executors and
administrators.
Section 13. SEVERABILITY. If any provision or provisions
of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or
impaired thereby; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.
Section 14. EXCEPTION TO RIGHT OF INDEMNIFICATION OR
ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of
this Agreement, Indemnitee shall not be entitled to
indemnification or advancement of Expenses under this Agreement
with respect to any Proceeding brought by Indemnitee, unless the
bringing of such Proceeding or making of such claim shall have
been approved by the Board of Directors.
Section 15. IDENTICAL COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original but all of which together
shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this
Agreement.
Section 16. HEADINGS. The headings of the paragraphs of
this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the
construction thereof.
Section 17. MODIFICATION AND WAIVER. No supplement,
modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a
continuing waiver.
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Section 18. NOTICE BY INDEMNITEE. Indemnitee agrees
promptly to notify the Company in writing upon being served with
any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or
matter which may be subject to indemnification or advancement of
Expenses covered hereunder.
Section 19. NOTICES. All notices, requests, demands and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if (i) delivered by hand and
receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to Indemnitee, to: The address set forth in
the signature pages hereto.
(b) If to the Company to:
Realty Income Corporation
220 West Crest Street
Escondido, California 92025
Attn: General Counsel
or to such other address as may have been furnished to Indemnitee
by the Company or to the Company by Indemnitee, as the case may
be.
Section 20. GOVERNING LAW. The parties agree that this
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Maryland.
Section 21. MISCELLANEOUS. Use of the masculine pronoun
shall be deemed to include usage of the feminine pronoun where
appropriate.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
ATTEST: REALTY INCOME CORPORATION
______________________________By:__________________________(SEAL)
Michael R. Pfeiffer, Secretary Richard J. VanDerhoff, President
WITNESS: INDEMNITEE
_____________________________ ________________________________
Name:
Address:
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