STOCK
OPTION; PROVIDED, HOWEVER, THAT OPTIONS GRANTED TO INDEPENDENT DIRECTORS AND
CONSULTANTS SHALL BE NON-QUALIFIED STOCK OPTIONS.
1.22
"OWNERSHIP LIMIT" SHALL MEAN THE OWNERSHIP OF NOT MORE THAN 9.8% OF
THE OUTSTANDING SHARES OF COMMON STOCK (AS DEFINED IN THE COMPANY'S AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION) OF THE COMPANY.
1.23
"PERFORMANCE AWARD" SHALL MEAN A CASH BONUS, STOCK BONUS OR OTHER
PERFORMANCE OR INCENTIVE AWARD THAT IS PAID IN CASH, COMMON STOCK OR A
COMBINATION OF BOTH, AWARDED UNDER ARTICLE VIII OF THE PLAN.
1.24
"PERFORMANCE CRITERIA" SHALL MEAN THE FOLLOWING BUSINESS CRITERIA
WITH RESPECT TO THE COMPANY, ANY SUBSIDIARY OR ANY DIVISION OR OPERATING UNIT:
(A) NET INCOME, (B) PRE-TAX INCOME, (C) OPERATING INCOME, (D) CASH FLOW,
(E) EARNINGS PER SHARE, (F) RETURN ON EQUITY, (G) RETURN ON INVESTED CAPITAL OR
ASSETS, (H) COST REDUCTIONS OR SAVINGS, (I) FUNDS FROM OPERATIONS, (J)
APPRECIATION IN THE FAIR MARKET VALUE OF COMMON STOCK, AND (K) EARNINGS BEFORE
ANY ONE OR MORE OF THE FOLLOWING ITEMS: INTEREST, TAXES, DEPRECIATION OR
AMORTIZATION; EACH AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES OR SUBJECT TO SUCH ADJUSTMENTS AS MAY BE SPECIFIED BY THE
COMMITTEE WITH RESPECT TO A PERFORMANCE AWARD.
1.25
"PLAN" SHALL MEAN THE 2003 INCENTIVE AWARD PLAN OF REALTY INCOME
CORPORATION.
1.26
"RESTRICTED STOCK" SHALL MEAN COMMON STOCK AWARDED UNDER
ARTICLE VII OF THE PLAN.
1.27
"RULE 16B-3" SHALL MEAN RULE 16B-3 PROMULGATED UNDER THE EXCHANGE
ACT, AS SUCH RULE MAY BE AMENDED FROM TIME TO TIME.
1.28
"SECTION 162(M) PARTICIPANT" SHALL MEAN ANY EMPLOYEE DESIGNATED BY
THE ADMINISTRATOR AS AN EMPLOYEE WHOSE COMPENSATION FOR THE FISCAL YEAR IN WHICH
THE EMPLOYEE IS SO DESIGNATED OR A FUTURE FISCAL YEAR MAY BE SUBJECT TO THE
LIMIT ON DEDUCTIBLE COMPENSATION IMPOSED BY SECTION 162(M) OF THE CODE.
1.29
"SECURITIES ACT" SHALL MEAN THE SECURITIES ACT OF 1933, AS AMENDED.
2
1.30
"STOCK APPRECIATION RIGHT" SHALL MEAN A STOCK APPRECIATION RIGHT
GRANTED UNDER ARTICLE IX OF THE PLAN.
1.31
"STOCK PAYMENT" SHALL MEAN (A) A PAYMENT IN THE FORM OF SHARES OF
COMMON STOCK, OR (B) AN OPTION OR OTHER RIGHT TO PURCHASE SHARES OF COMMON
STOCK, AS PART OF A DEFERRED COMPENSATION ARRANGEMENT, MADE IN LIEU OF ALL OR
ANY PORTION OF THE COMPENSATION, INCLUDING WITHOUT LIMITATION, SALARY, BONUSES
AND COMMISSIONS, THAT WOULD OTHERWISE BECOME PAYABLE TO AN EMPLOYEE OR
CONSULTANT IN CASH, AWARDED UNDER ARTICLE VIII OF THE PLAN.
1.32
"SUBSIDIARY" SHALL MEAN ANY CORPORATION IN AN UNBROKEN CHAIN OF
CORPORATIONS BEGINNING WITH THE COMPANY IF EACH OF THE CORPORATIONS OTHER THAN
THE LAST CORPORATION IN THE UNBROKEN CHAIN THEN OWNS STOCK POSSESSING FIFTY
PERCENT (5 0%) OR MORE OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF
STOCK IN ONE OF THE OTHER CORPORATIONS IN SUCH CHAIN. "SUBSIDIARY" SHALL ALSO
MEAN ANY PARTNERSHIP IN WHICH THE COMPANY, OR ANY SUBSIDIARY, OWNS MORE THAN 50
PERCENT OF THE CAPITAL OR PROFITS INTERESTS.
1.33
"SUBSTITUTE AWARD" SHALL MEAN AN OPTION GRANTED UNDER THIS PLAN
UPON THE ASSUMPTION OF, OR