Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between
Realty Income Corporation, a Maryland corporation (the “Company”), and  NAME, an
individual residing in the county of San Diego, state of California (the
“Employee”), and shall be effective as of January 1, 2010 (the “Effective
Date”).
 
1.Term.  The Company hereby continues to employ the Employee for an indefinite
term commencing on the date hereof and continuing until this Agreement is
terminated by either party as provided hereinafter in Paragraph 10 (such period
being hereinafter sometimes referred to as the “term of this Agreement”).  The
Employee accepts such employment and agrees to perform the services specified
herein, all upon the terms and conditions hereinafter set forth.
 
2.Duties.  The Employee shall perform such management and administrative duties
as are from time-to-time assigned to him by the Company.  If the Employee is
elected an officer of the Company during the term of this Agreement, the
Employee will serve in such capacity without further compensation.  The Employee
also agrees to perform, without additional compensation, such other services for
the Company and for any subsidiary or affiliated corporations of the Company or
for any partnerships in which the Company has an interest, as the Board of
Directors of the Company (the “Board”) shall from time-to-time specify.
 
3.Extent of Services.  During the term of this Agreement, the Employee shall
devote his full time, attention and energy to the business of the Company and,
except as may be specifically permitted by the Board in writing, shall not be
engaged in any other business activity which would interfere with the
performance of his duties hereunder or be competitive with the business of the
Company.  The foregoing restrictions shall not be construed as preventing the
Employee from making passive investments in other businesses or enterprises;
provided, however, that such other investments will not require services on the
part of the Employee which would in any manner impair the performance of his
duties under this Agreement, and provided further that such other businesses or
enterprises are not engaged in any business competitive to the business of the
Company.
 
4.Salary; Bonus.  During the term of this Agreement, as compensation for the
proper and satisfactory performance of all duties to be performed by Employee
hereunder, the Company shall pay to the Employee a base salary of no less than
SALARY per year less required deductions for state and federal withholding tax,
social security and all other required employee taxes and payroll deductions. 
From time-to-time during the term of this Agreement, the amount of the
Employee’s base salary may be increased by and at the sole discretion of the
Company.  The base salary shall be payable in installments in accordance with
regular payroll policies of the Company in effect from time-to-time during the
term of this Agreement.  Any annual bonus payable to Employee during the term of
this Agreement shall be solely at the discretion of the Company, and shall be
subject to and conditioned on Employee’s continued employment with the Company
through the date of payment of such bonus.  Employee acknowledges and agrees
that nothing contained herein confers on him any right to an annual bonus in any
year, and that whether the Company pays him an annual bonus and the amount of
any such annual bonus shall be determined by the Company in its sole and
absolute discretion. 
 
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5.Annual Incentive Plan.  The Employee shall participate in the 2003 Incentive
Award Plan of the Company as the same shall be adopted and amended from time to
time by the Compensation Committee of the Board.
 
6.Medical Insurance; Benefit Plans.  During the term of this Agreement, the
Employee shall be eligible to participate, on the same terms as are applied to
all other employees, in any group medical insurance plan, qualified pension or
profit sharing plan or any other employee benefit plan from time-to-time
maintained by the Company.  Nothing in this paragraph is intended to require the
Company to maintain or to continue any employee benefits plans, nor is this
paragraph intended to limit the Company’s ability to revise, supplement or
terminate any or all such employee benefit plans in its sole discretion.
 
7.Expenses.  During the term of this Agreement, the Company shall pay to or
reimburse the Employee, upon submission of an appropriate statement by him
documenting such expenses as required by the Internal Revenue Code of 1986, as
amended (the “Code”), for all out-of-pocket expenses for entertainment, travel,
meals, hotel accommodations and the like reasonably incurred by him in the
course of his employment hereunder.
 
8.Vacation.  The Employee shall be entitled to an annual vacation in accordance
with the Company’s vacation policy as contained in its Employee Handbook, as the
same may be amended from time to time.  Employee’s prior service with the
Company shall be included in determining vacation accrual and all other
benefits.  Such vacation shall be scheduled at such time as the Employee may
choose, but shall be timed in such manner as to avoid interference with the
necessary performance of his duties hereunder.  Unused vacation time shall
accrue from year-to-year subject to the caps and other limitations set forth in
the Company’s vacation policy as contained in its Employee Handbook, as the same
may be amended from time to time in the Company’s sole discretion.
 
9.Sick/Personal Leave.  The Employee shall be entitled to sick/personal leave in
accordance with the Company’s Employee Handbook, as the same may be amended from
time to time.
 
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10.Termination.
 
 
a.   Death or Permanent Disability.  In the event that the Employee dies or
incurs a disability (as defined below) during the term of this Agreement, then
the Employee’s employment with the Company shall terminate upon the Employee’s
death or disability, and (with the exception of any life or disability insurance
benefits to which the Employee may be entitled) the Company shall have no
further obligation hereunder to the Employee or his spouse or estate except to
pay to the Employee (in the event of his disability) or the Employee’s spouse if
she should survive him, or to the Employee’s estate if his spouse shall not
survive him, the amount of the Employee’s accrued but unpaid wages (including
all earned commission pay, if any, payable pursuant to a separate commissions
agreement), and accrued but unused vacation, if any, as of the date of his death
or disability.  For purposes of this Agreement, “disability” shall mean the
Employee’s inability to perform his duties with the Company on a full-time basis
for 120 consecutive days or for a total of 180 days in any 12-month period, in
either case as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by the Company or its insurers.

 
 
b.   Termination by the Company Without Cause/Constructive Termination.  The
Employee’s employment with the Company may be terminated by the Company without
Cause or by the Employee by reason of a Constructive Termination (each as
defined in the Definitions Annex below) at any time upon written notice to the
Employee or the Company, as applicable, provided that in the event of the
Company’s termination of Employee’s employment without Cause or Employee’s
Constructive Termination, in either case prior to or more than twelve months
after a Change in Control (as defined in the Definitions Annex below) the
Company shall: (i) pay to the Employee in a single lump sum an amount equal to
twelve (12) months’ of the Employee’s then current  base salary under this
Agreement plus the average of the last three (3) years’ cash bonus paid to the
Employee (excluding commissions, if any, payable pursuant to a separate
commissions agreement) (the “Severance Payment”), (ii) pay any accrued but
unpaid wages (including all earned commission pay, if any, payable pursuant to a
separate commissions agreement) and accrued but unused vacation pay to which the
Employee may be entitled hereunder as of the termination date, and (iii)
continue to provide Employee with group medical insurance at the Company’s
expense (whether through reimbursement of Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) premiums or otherwise in the
Company’s discretion) for a period of twelve (12) months from the date of the
Employee’s Separation from Service (as defined below) or until Employee becomes
covered under another group medical insurance plan, whichever occurs first.  In
the event of the Company’s termination of Employee’s employment without Cause or
Employee’s Constructive Termination, in either case on or within twelve months
after a Change in Control, in lieu of the foregoing, the Company shall: (i) pay
to the Employee in a single lump sum an amount equal to eighteen (18) months’ of
the Employee’s then current base salary under this Agreement plus the average of
the last three (3) years’ cash bonus paid to the Employee (excluding
commissions, if any, payable pursuant to a separate commissions agreement) (the
“CIC Severance Payment”), (ii) pay any accrued salary (including all earned
commission pay, if any, payable pursuant to a separate commissions agreement)
and accrued but unused vacation pay to which the Employee may be entitled
hereunder as of the termination date, and (iii) continue to provide Employee
with group medical insurance at the Company’s expense (whether through
reimbursement of COBRA premiums or otherwise in the Company’s discretion) for a
period of eighteen (18) months from the date of the Employee’s Separation from
Service or until Employee becomes covered under another group medical insurance
plan, whichever occurs first.  Notwithstanding the foregoing, the severance
payments described in this Paragraph 10(b), other than the accrued salary and
accrued but unused vacation described in clause (ii), shall be payable only in
the event that the termination of employment constitutes a “separation from
service” within the meaning of Treasury Regulation Section 1.409A-1(h) (a
“Separation from Service”).  In addition, in the event that the Employee’s
employment is terminated by the Company or by the Employee pursuant to this
Paragraph 10(b), such termination shall be upon the terms of, and the Company
and the Employee shall execute, in the execution time frame specified in such
document following the Separation from Service, the Severance Agreement and
General Release substantially in the form of Exhibit A, attached hereto and
incorporated herein by reference, and the Employee’s right to receive
the  severance payments and benefits under this Paragraph 10(b) (other than the
accrued salary and accrued but unused vacation described in clause (ii) above)
shall be subject to and contingent on the execution and non-revocation by
Employee of such Severance Agreement and General Release.  Subject to Paragraph
10(d) below, any Severance Payment or CIC Severance Payment, as applicable, that
becomes payable to the Employee pursuant to this Paragraph 10(b) shall be paid
to the Employee on the sixtieth (60th) day following the date of the Employee’s
Separation from Service.

 
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c.   Termination by the Employee.   The Employee may voluntarily terminate his
employment with the Company other than by reason of a Constructive Termination
at any time upon two (2) weeks’ written notice to the Company.

 
 
d.   Internal Revenue Code Section 409A.  Notwithstanding any provision to the
contrary in this Agreement, if the Employee is deemed by the Company at the time
of his Separation from Service to be a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any
portion of the benefits to which the Employee is entitled under this Agreement
is required in order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, such portion of the Employee’s benefits shall not
be provided to the Employee prior to the earlier of (i) the expiration of the
six-month period measured from the date of the Separation from Service or (ii)
the date of the Employee’s death.  Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this
Paragraph 10(d) shall be paid in a lump sum to the Employee, and any remaining
payments due under the Agreement shall be paid as otherwise provided herein.

 
 
To the extent that any payments or reimbursements provided to the Employee under
this Agreement are deemed to constitute compensation to which Treasury
Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or
reimbursed to the Employee reasonably promptly, but in no event later than
December 31 of the year following the year in which the expense was
incurred.  The amount of any such payments eligible for reimbursement in one
year shall not affect the payments or expenses that are eligible for payment or
reimbursement in any other taxable year, and the Employee’s right to such
payments or reimbursement shall not be subject to liquidation or exchange for
any other benefit.

 
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e.   Failure to Perform.  Notwithstanding any other provision of this Agreement,
if the Employee shall be discharged by the Company for Cause or if Employee
voluntarily terminates employment other than as a result of a Constructive
Termination, then this Agreement shall automatically terminate (except for the
provisions of Paragraphs 12 and 13, which shall continue in effect), and upon
such termination, the Company shall have no further obligation to the Employee
or his spouse or estate, except that the Company shall pay to the Employee, the
amount of his accrued but unpaid wages (including all earned commission pay, if
any, payable pursuant to a separate commissions agreement) and accrued but
unused vacation pay as of the date of such termination.

 
11.Corporate Opportunity.  The Employee acknowledges the value to the Company of
his knowledge, contacts and working relationships involving the business of the
Company.  Employee agrees to utilize all of such capacities for the sole use and
benefit of the Company and to first offer to the Company any and all of those
opportunities which shall come to his knowledge which are within the area of
business of the Company.
 
12.Confidential Information.  The Employee acknowledges that in the course of
his employment with the Company, he will receive certain trade secrets,
know-how, lists of customers, employee records and other confidential
information and knowledge concerning the business of the Company (hereinafter
collectively referred to as “information”) which the Company desires to
protect.  The Employee understands that such information is confidential, and he
agrees not to reveal such information to anyone outside the Company either
during the term of this Agreement or indefinitely thereafter.  The Employee
further agrees that during the term of this Agreement and indefinitely
thereafter he will not use such information, directly or indirectly, to compete
against the Company.  At such time as the Employee shall cease to be employed by
the Company, he shall surrender to the Company all papers, documents, writings
and other property produced by him or coming into his possession by or through
his employment hereunder and relating to the information referred to in this
paragraph, and the Employee agrees that all such materials will at all times
remain the property of the Company.
 
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13.Assignment of Proprietary Information.  During the term of this Agreement,
all patents, processes and other proprietary information developed by the
Employee in the course of his employment shall be the sole and exclusive
property of the Company.  The Employee covenants and agrees to execute any
documents or take any action necessary to effectively transfer any rights he may
have in such proprietary information to the Company and to maintain the rights,
interest and title of the Company in and to such information.  Nothing herein
shall be deemed to deny Employee the protection afforded by California Labor
Code Section 2870.
 
14.Indemnification.  The Company shall indemnify Employee against liability
pursuant to an Indemnity Agreement, which the Company and Employee have
previously executed.
 
15.Notices.  All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been delivered on the
date personally delivered or on the date mailed, postage prepaid, by certified
mail, return receipt requested, or telegraphed and confirmed if addressed to the
respective parties as follows:
 
If to the Employee:NAME
ADDRESS
CITY, STATE  ZIP

If to the Company: Realty Income Corporation
Attention:  President, Chief Operating Officer
600 La Terraza Boulevard
Escondido, California  92025
 
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto as provided in this
Paragraph 15.

 
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16.Specific Performance.  The Employee acknowledges that a remedy at law for any
breach or attempted breach of Paragraphs 12 and 13 of this Agreement will be
inadequate, and therefore agrees that the Company shall be entitled to specific
performance and injunctive and other equitable relief in case of any such breach
or attempted breach, and further agrees to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive or any other equitable relief.

17.Severability.  In the event any term, phrase, clause,  paragraph, section,
restriction, covenant or agreement contained in this Agreement shall be held to
be invalid or unenforceable, the same shall be deemed, and it is hereby agreed
that the same are meant to be several and shall not defeat or impair the
remaining provisions hereof.
 
18.Waiver.  The waiver by the Company of any breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent or continuing breach of this Agreement by the Employee.
 
19.Assignment.  This Agreement may not be assigned by the Employee.  Neither of
the Employee nor his spouse or estate shall have any right to commute, encumber
or dispose of any right to receive payments under this Agreement, it being
agreed that such payments and the rights thereto are nonassignable and
nontransferable.
 
20.Binding Effect.  Subject to the provisions of Paragraph 19, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, the
Employee’s heirs and personal representatives, and the successors and assigns of
the Company.
 
21.Entire Agreement.  This Agreement sets forth the entire agreement and
understanding between the parties relating to the subject matter contained
herein and supersedes all other agreements, oral or written, between the parties
relating to such subject matter, including, but not limited to, any and all
other agreements between the parties concerning employment, compensation, or
profit sharing; provided, however, that the Company’s equity compensation plans
and any written stock option or restricted stock agreement between the Company
and Employee setting forth the terms of equity compensation awards granted to
Employees under such plans and the Indemnity Agreement between the Company and
Employee all shall remain in full force and effect.
 
22.Withholding.  Any amounts payable under this Agreement shall be subject to
any required federal, state, local or other income, employment or other tax
withholdings.
 
23.Amendment.  This Agreement may be amended only by an instrument in writing
executed by both parties hereto.

 
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24.Governing Law.  This Agreement shall be construed and enforced in accordance
with and governed by the law of the State of California.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
 
REALTY INCOME CORPORATION         EMPLOYEE
 

 
By:   __________________________          ________________________
  Thomas A. Lewis, Jr.                 NAME
  Chief Executive Officer
  

 
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DEFINITIONS
 
For purposes of this Agreement, “Cause,” “Change in Control” and “Constructive
Termination” shall have the following defined meanings:
 
1.“Cause” means (a) theft, dishonesty or falsification of any employment or
Company records; (b) malicious or reckless disclosure of the Company’s
confidential or proprietary information; (c) commission of any immoral or
illegal act or any gross or willful misconduct, where the Company reasonably
determines that such act or misconduct has (1) seriously undermined the ability
of the Company’s management to entrust Employee with important matters or
otherwise work effectively with Employee, (2) contributed to the Company’s loss
of significant revenues or business opportunities, or (3) significantly and
detrimentally effected the business or reputation of the Company or any of its
subsidiaries; and/or (d) Employee’s failure or refusal to work diligently to
perform tasks or achieve goals reasonably requested by the Board, provided such
breach, failure or refusal continues after the receipt of reasonable notice in
writing of such failure or refusal and an opportunity to correct the problem. 
“Cause” shall not mean a physical or mental disability.
 
2.“Change in Control” shall mean the occurrence of any of the following:
 
(a)An acquisition in one transaction or a series of related transactions (other
than directly from the Company or pursuant to awards granted under the Company’s
equity incentive plan or compensatory options or other similar awards granted by
the Company) of the Company’s voting securities by any individual or entity (a
“Person”), immediately after which such Person has beneficial ownership of fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding voting securities (other than a Non-Control Transaction, as defined
below);
 
(b)The individuals who, immediately prior to the Effective Date, are members of
the Board (the “Incumbent Board”), cease for any reason to constitute at least a
majority of the members of the Board; provided, however, that if the election,
or nomination for election, by the Company’s common stockholders, of any new
director was approved by a vote of at least a majority of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened “Election Contest”
(as described in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
 
(c)the consummation of
 
(i)a merger, consolidation or reorganization involving the Company unless:
 
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(A)the stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly, immediately
following such merger, consolidation or reorganization, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Company’s voting securities immediately before such merger, consolidation
or reorganization,
 
(B)the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least a majority of the members of the board of
directors of the Surviving Corporation, or a corporation beneficially owning,
directly or indirectly, a majority of the voting securities of the Surviving
Corporation, and
 
(C)no Person, other than (i) the Company, (ii) any employee benefit plan (or any
trust forming a part thereof) that, immediately prior to such merger,
consolidation or reorganization, was maintained by the Company, the Surviving
Corporation, or any related entity or (iii) any Person who, together with its
Affiliates, immediately prior to such merger, consolidation or reorganization
had beneficial ownership of fifty percent (50%) or more of the Company’s then
outstanding voting securities, owns, together with its Affiliates, beneficial
ownership of fifty percent (50%) or more of the combined voting power of the
Surviving Corporation’s then outstanding voting securities.
 
(A transaction described in clauses (A) through (C) above is referred to herein
as a “Non-Control Transaction”);
 
(d)a complete liquidation or dissolution of the Company; or
 
(e)an agreement for the sale or other disposition of all or substantially all of
the assets or business of the Company to any Person.
 
For purposes of this Agreement, “Affiliate” shall mean, with respect to any
Person, any other Person that, directly or indirectly, controls, is controlled
by, or is under common control with, such Person.  Neither the Company nor any
Person controlled by the Company shall be deemed to be an Affiliate of any
holder of Common Stock.
 
3.“Constructive Termination” means Employee’s resignation of employment within
sixty (60) days of one or more of the following events which remains uncured
thirty (30) days after Employee’s delivery of written notice thereof, and which
resignation is effective not more than thirty (30) days following the expiration
of such cure period:
 
(a)a material diminution by the Company in Employee’s authority, duties or
responsibilities from those in effect immediately prior to such diminution;
 
(b)a material reduction by the Company in Employee’s base salary in effect
immediately prior to such reduction; or
 
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(c)a material relocation by the Company of Employee’s principal office location;
provided, that a change to a location which is not more than forty (40) miles
from the Company’s present headquarters location shall in no event be deemed
“material” for purposes of this definition (and, for the avoidance of doubt,
reasonably required travel on the Company’s business shall not be considered a
relocation).

 
 
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EXHIBIT A
 
SEVERANCE AGREEMENT AND GENERAL RELEASE
 
This Severance Agreement and General Release (this “Severance Agreement”) is
entered into as of  _____________________, 20___, by and between Realty Income
Corporation (the “Company”), and ____________________ (hereinafter “Employee”).
 
IN CONSIDERATION of the severance compensation as herein provided, to which
Employee is not otherwise entitled, Employee does hereby unconditionally,
irrevocably and absolutely release and discharge the Company, and any parent and
subsidiary corporations, divisions and other affiliated entities, past and
present, as well as its past and present directors, officers, employees,
shareholders, agents, successors and assigns (collectively, “Released Parties”),
from any and all loss, liability, claims, demands, causes of action, or suit of
any type related directly or indirectly or in any way connected to the
transactions or occurrences between Employee and the Released Parties to date,
to the fullest extent permitted by applicable law.  This release includes, but
is not limited to, any losses, liabilities, claims, demands, causes of action,
known or unknown, suspected or unsuspected, arising directly out of or in any
way related to Employee’s employment with the Company, or the termination of
Employee’s employment.  This release is intended to have the broadest possible
application and includes, but is not limited to, any tort, contract, common law,
constitutional or other statutory claims, as well as alleged violations of the
California Labor Code, any applicable California Industrial Welfare Commission
order, the California Business and Professions Code, Title VII of the Civil
Rights Act of 1964, the California Fair Employment and Housing Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Age
Discrimination in Employment Act of 1967, all as amended, and all claims for
attorneys’ fees, costs and expenses.  However, this release shall not apply to
claims for workers’ compensation benefits or unemployment insurance benefits,
any challenge made by Employee to the validity of his release of claims under
the Age Discrimination in Employment Act, or any other claims of Employee that
cannot, by statute, lawfully be waived by this Severance Agreement.
 
IN FURTHER CONSIDERATION THEREOF, Employee hereby waives all rights he may have
to any personal relief or recovery from any charge or complaint, for events or
causes of action occurring or accruing on or before the Effective Date of this
Severance Agreement, before any federal, state, or local administrative agency
against the Released Parties, except as such waiver is prohibited by statutory
provision.  Employee further waives all rights to file or join in any action
before any federal, state, or local court against the Released Parties for any
events or causes of action occurring or accruing on or before the Effective Date
of this Severance Agreement.  Employee also acknowledges that he does not have
any current charge or claim against the Released Parties pending before any
local, state or federal agency regarding his employment.  Except as prohibited
by statutory provision, in the event that any claims are filed, they shall be
dismissed with prejudice upon presentation of this Severance Agreement, and
Employee shall reimburse the Company for the costs, including reasonable
attorneys' fees, of defending any such action.  The attorneys’ fee provision in
the previous sentence shall not apply to any action by Employee to challenge the
enforceability of his waiver of rights under the Age Discrimination in
Employment Act..
 
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As consideration for entering into this Severance Agreement, Employee shall
receive the following severance compensation payable in accordance with the
terms of Paragraph 10 of that certain Employment Agreement between the parties
dated as of [_______, 20__]:
 
a)The total gross sum of                    ($             ), payable in a lump
sum, and subject to applicable withholdings; and
 
b)Group medical insurance paid for by the Company for Employee and his
dependents (if currently covered) through                  , or until Employee
becomes covered under another group medical insurance plan, whichever occurs
first.  Employee shall immediately notify the Company upon becoming eligible for
coverage under another group medical insurance plan.
 
Except as set forth in this Severance Agreement, or as otherwise mandated by
applicable law, Employee shall not be entitled to any benefits as an employee or
former employee of the Company.
 
As a condition of the foregoing payments and benefits, Employee agrees to
preserve the confidentiality of all trade secrets and other confidential
information of the Released Parties, and will not now or in the future disrupt,
damage, impair or interfere with the business of the Released Parties, whether
by way of using or disclosing the Released Parties’ trade secrets and
confidential information to compete against them, interfering with or raiding
their employees, or otherwise unlawfully disrupting their relationships with
customers, agents, representatives or vendors.  Employee agrees to comply, in
all respects, with the on-going confidentiality provisions contained in
Paragraph 12 of the Employment Agreement between the parties.
 
Employee agrees to cooperate with the Company in accomplishing a smooth and
orderly transition in the transfer of responsibilities of Employee to other
employees of the Company, particularly including pending matters of which
Employee has the principal knowledge and background information.  In this
regard, Employee agrees to respond in a timely fashion to the questions which
may be presented occasionally by the Company.  Such cooperation and responses
shall not entitle Employee to any additional compensation beyond the severance
compensation specified herein above, so long as such cooperation and responses
do not unreasonably interfere with Employee’s other gainful employment or
efforts to secure gainful employment.
 
By signing this Severance Agreement, Employee represents, warrants and agrees as
follows:
 
(1)Employee has carefully read this Severance Agreement and understands all of
its respective terms.
 
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(2)Employee does expressly waive all of the benefits and rights granted to him
pursuant to California Civil Code Section 1542, which provides and reads as
follows:
 
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
 
Employee does certify that he has read all of this Severance Agreement and the
quoted Civil Code Section, and that he fully understands all of the same, and
that he has been given the opportunity, if he desires, to review the terms of
this Severance Agreement and with counsel of his choosing.
 
(3)Employee expressly declares and represents that no promise, inducement or
agreement not herein expressed has been made to him and that this Severance
Agreement contains the entire agreement between the parties concerning the
subject matter of this Severance Agreement and supersedes all prior
negotiations, discussions or agreements relating to the subject matter of this
Severance Agreement; provided, however, that the Employment Agreement between
the parties is incorporated and made a part of this Severance Agreement and
remains in full force and effect.
 
(4)Employee agrees that this Severance Agreement may be pled as a full and
complete defense to, and may be used as the basis for an injunction against, any
action, suit or other proceeding which may be prosecuted, instituted or
attempted by Employee in breach hereof.  Employee further agrees that in the
event an action or proceeding is instituted by Employee or the Company or any
party released hereby in order to enforce the terms or provisions hereof, the
prevailing party shall be entitled to an award of reasonable costs and
attorneys’ fees.  This attorneys’ fee provision shall not apply to an action
brought by Employee to challenge the enforceability of his waiver of rights
under the Age Discrimination in Employment Act.
 
(5) The parties agree that this Severance Agreement shall bind Employee, his
heirs, successors, agents, representatives and assigns, and each of them, and
shall inure to the benefit of the successors and assigns of the respective
parties hereto.
 
(6)Employee has signed this Severance Agreement knowingly and voluntarily, and
no promises or representations have been made to him to induce him to sign this
Severance Agreement.
 
(7)If Employee is under age 40 as of the date he signs this Severance Agreement,
he understands that the acceptance procedures of this Paragraph 7 apply to
him.  Employee understands that he may take up to twenty-one (21) days to sign
this Severance Agreement and the Severance Agreement shall be effective
immediately upon the date of his signature (“Effective Date”).
 
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(8)If Employee is age 40 or over as of the date he signs this Severance
Agreement, he understands that the acceptance procedures of this Paragraph 8
apply to him.  Employee acknowledges and agrees that:  a) he has been advised to
consult with an attorney before executing this Severance Agreement; b) he has
been given at least twenty-one (21) days to consider and sign this Severance
Agreement; c) Employee may revoke his acceptance of this Severance Agreement
within seven days after he signs it by delivering a written revocation to the
President, Chief Operating Officer so that such written revocation is received
by no later than the seventh day; d) this Severance Agreement shall not be
binding and enforceable until the eighth day after Employee signs this Severance
Agreement without revoking it (“Effective Date”); and e) this Severance
Agreement does not waive or release any rights or claims that Employee may have
under the Age Discrimination in Employment Act that arise after execution of
this Severance Agreement.
 
IN WITNESS WHEREOF, the undersigned have executed this Severance Agreement and
General Release as of the date first above written.
 
REALTY INCOME CORPORATION   EMPLOYEE
 

 
By:       ___________________________       __________________
 
Title:    ___________________________      
 

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