Document:

exhibit_10-1.htm

    Exhibit
      10.1

    

    AMENDMENT
      TO

    REALTY
      INCOME CORPORATION

    2003
      INCENTIVE AWARD PLAN

    (as
      amended
      and restated February 21, 2006)

    

    

    THIS
      AMENDMENT TO
      THE REALTY INCOME CORPORATION 2003 INCENTIVE AWARD PLAN (as amended and restated
      February 21, 2006), made as of May 15, 2007, is adopted by Realty
      Income Corporation, a Maryland corporation (the
“Company”).  Capitalized terms used but not otherwise defined herein
      shall have the respective meanings ascribed to them in the Plan (as defined
      below).

     

    WHEREAS,
      the
      Company maintains the Realty Income Corporation 2003 Incentive Award Plan,
      as
      amended and restated February 21, 2006 (the
“Plan”);

     

    WHEREAS,
      pursuant
      to Section 11.2 of the Plan, the Company reserved the right to amend the Plan;
      and

     

    NOW,
      THEREFORE, in
      consideration of the foregoing, the Plan is hereby amended as
      follows:

     

    
      	
               

            	
              1.

            	
              Section
                7.3(c) of the Plan is hereby amended in its entirety and restated
                as
                follows:

            

    

    “Shares
      of
      Restricted Stock granted on or after May 15, 2007 pursuant to clause B of
      Section 7.3(a)(ii)  shall vest based on Independent Directors’ Years
      of Service in accordance with the following schedule:

     

    
      	
              Years
                of Service at

               the
                Date of Grant

            	
               

            	
               

              Percentage
                Vested

            
	
              Less
                than
                five

            	
               

            	
              33-1/3%
                increments on each of the first three anniversaries of the date the
                shares
                of Restricted Stock are granted (rounded up to the nearest whole
                share)

               

            
	
              Six

            	
               

            	
              50%
                increments on each of the first two anniversaries of the date the
                shares
                of Restricted Stock are granted

               

            
	
              Seven

            	
               

            	
              100%
                vested
                on the first anniversary of the date the shares of Restricted Stock
                are
                granted

               

            
	
              Eight
                or
                more

            	
               

            	
              100%
                vested
                as of the date the shares of Restricted Stock are
                granted

            

    

     

    For
      purposes of
      this Plan, “Years of Service” for a Director shall mean each 365-day period of
      his or her continuous service to the Company as an Employee, Director or
      Consultant. The Committee shall have sole, final and binding authority to
      determine any questions regarding a Director’s Years of Service for purposes of
      the Plan.”

     

    
      	
               

            	
              2.

            	
              This
                Amendment shall be and is hereby incorporated in and forms a part
                of the
                Plan.

            

    

     

    
      	
               

            	
              3.

            	
              All
                other
                terms and provisions of the Plan shall remain unchanged except as
                specifically modified herein.

            

    

     

    Executed
      on this
      15th day of May, 2007.

     

                                    By:
/s/
      Michael R.
      Pfeiffer

                                    Michael
      R.
      Pfeiffer

                                    Executive
      Vice
      President, General Counselexhibit_10-2.htm

    Exhibit
      10.2

    
 

    RESTRICTED
      STOCK AGREEMENT

     

    THIS
      AGREEMENT is
      made between ______________________ (the “Employee”) and Realty Income
      Corporation, a Maryland corporation (the “Company”), as of ______, 2007 (the
“Effective Date”).

     

    RECITALS

     

    (1)           Pursuant
      to the 2003 Incentive Award Plan of Realty Income Corporation, as amended (the
      “Plan”), the Company has granted to Employee an award of _________ shares of
      restricted common stock of the Company (the “Shares”).

     

    (2)           As
      a condition to Employee’s grant of restricted stock, Employee must execute this
      Restricted Stock Agreement, which sets forth the rights and obligations of
      the
      parties with respect to the Shares.

     

    (3)           The
      Plan’s terms are hereby incorporated herein by reference.  Capitalized
      terms not defined herein shall have the meanings ascribed to them in the
      Plan.

     

    1.  Forfeiture;
      Vesting.

     

    (a)  Except
      as provided
      in Subsections 1(c) and (d), if Employee’s employment with the Company is
      terminated for any reason, including, but not limited to for Cause (as defined
      below), death, and disability, all unvested Shares (the “Unvested Shares”) as of
      the date of such termination shall immediately be forfeited and shall be
      transferred to the Company; provided that as to Shares that would have vested
      at
      the subsequent Vesting anniversary of the Effective Date (each such anniversary,
      a “Vesting Date”), such Shares shall vest on a prorated basis based on the
      number of days elapsed from the prior Vesting Date through the date of
      termination and rounding down to the nearest Share.

     

    (b)  Except
      as provided
      in Subsections 1(c) and (d), the Unvested Shares issued hereunder shall vest
      over [ten (10) years1] [five (5) years2] [four (4)
      years3] [three (3) years4] [two (2) years5]
      [one (1) year6] [immediately7] on the following dates,
      provided Employee is still an employee on that date:

    
      

        

      

      
         

        
          	
                   

                	
                  1For
                    employees age 49 and below as
                    of the date of the
                    grant.

                

        

      

        
        
          	
                   

                	
                  2
                    For employees
                    age 50 – 55 as of the date of the
                    grant.

                

        

      

        
        
          	
                   

                	
                  3For
                    employees age 56 as of the
                    date of the grant.

                

        

      

        
        
          	
                   

                	
                  4For
                    employees age 57 as of the
                    date of the grant.

                

        

      

      
         

        
          	
                   

                	
                  5For
                    employees age 58 as of the
                    date of the grant.

                

        

      

        
        
          	
                   

                	
                  6For
                    employees age 59 as of the
                    date of the grant.

                

        

      

      
         

        
          	
                   

                	
                  7For
                    employees age 60 and above as
                    of the date of the
                    grant.

                

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              
                Shares

              

            	
              
                Vest
                  Date

              

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            
	
              ___________

            	
                   ___/___/_____

            

    

    

     

    (c)  Notwithstanding
      the
      provisions of Section 1(b) hereof, in the event of a Change in Control all
      Unvested Shares shall immediately become vested immediately prior to the
      consummation of such Change in Control.

     

    (d)  Notwithstanding
      the
      provisions of Subsections 1(a) and (b) hereof, in the event of Employee’s
      termination of employment without Cause or Employee’s Constructive Termination
      (each as defined below), in either case within eighteen months following a
      merger or consolidation of the Company with or into another corporation in
      a
      transaction that is not a Change in Control (a “Non-CIC Merger”), then all
      Unvested Shares (or any unvested rights to cash or other property for which
      the
      Unvested Shares were substituted or exchanged in connection with the Non-CIC
      Merger) shall immediately become vested.

     

    (e)  For
      purposes of
      this Agreement, “Cause,” “Change in Control” and “Good Reason” shall have the
      following defined meanings:

     

    (i)  “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.

     

    (ii)  “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 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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

        (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:

     

        (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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (iii)  “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:

     

        (a)           the
      delegation to Employee of duties or the reduction of Employee’s duties, either
      of which substantially reduces the nature, responsibility, or character of
      Employee’s position immediately prior to such delegation or
      reduction;

     

        (b)           a
      material reduction by the Company in Employee’s base salary in effect
      immediately prior to such reduction;

     

        (c)           a
      material reduction by the Company in the kind or level of employee benefits
      or
      fringe benefits to which Employee was entitled prior to such reduction; or
      the
      taking of any action by the Company that would adversely affect Employee’s
      participation in any plan, program or policy generally applicable to employees
      of equivalent seniority; and

     

        (d)           the
      Company’s relocation of Employee’s principal office location to a place more
      than forty (40) miles from the Company’s present headquarters location (except
      that reasonably required travel on the Company’s business shall not be
      considered a relocation).

     

    2.  Transfer
      of Shares.  Unless permitted by the Administrator,
      Unvested Shares or any interest or right therein or part thereof shall not
      be
      liable for the debts, contracts or engagements of the Employee or his or her
      successors in interest and shall not be subject to disposition by transfer,
      alienation, anticipation, pledge, encumbrance, assignment or any other means
      whether such disposition be voluntary or involuntary or by operation of law
      by
      judgment, levy, attachment, garnishment or any other legal or equitable
      proceedings (including bankruptcy), and any attempted disposition thereof shall
      be null and void and of no effect; provided, however, that this
      Section 2 shall not apply to vested Shares and shall not prevent transfers
      by
      will or by applicable laws of descent and distribution.  In the case
      of a permitted transfer of Unvested Shares, the transferee or other recipient
      shall receive and hold the Unvested Shares so transferred subject to the
      provisions of this Agreement, and there shall be no further transfer of such
      Shares except in accordance with the terms of this Section.  Any
      transferee shall acknowledge the same

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    by
      signing a copy
      of this Agreement.  Transfer or sale of the Shares is subject to
      restrictions on transfer imposed by any applicable state and federal securities
      laws.  The Unvested Shares will be held in book entry form by the
      Company’s Stock Transfer Agent, The Bank of New York.  As Shares vest
      annually, the Transfer Agent will be given instructions to issue a certificate
      to the Employee for the vested Shares.

     

    3.  Change
      in Control Adjustment.  In addition to the actions
      permitted under Section 11.3 of the Plan upon a Change in Control the
      Administrator may, in its sole discretion, provide that the Unvested Shares
      be
      assumed by the successor or survivor corporation or other entity, or a parent
      or
      subsidiary thereof, or be substituted for by similar options, rights or awards
      covering cash or the stock or other equity interests of the successor or
      survivor corporation or other entity, or a parent or subsidiary thereof, with
      appropriate adjustments as to the number and kind of shares or cash payment
      rights.

     

    4.  Dividends
      and Voting Rights.  Employee shall be entitled to any and
      all distributions on the Shares, payable from the Effective
      Date.  Employee shall have all voting rights with respect to
      Shares.

     

    5.  Ownership
      Rights, Duties.  This Agreement shall not affect in any
      way the ownership, voting rights or other rights or duties of Employee, except
      as specifically provided herein.

     

    6.  Legends.  The
      certificate evidencing the Shares issued shall be endorsed with any legend
      required under applicable federal and state securities laws and the Company’s
      Articles of Incorporation.

     

    7.  Adjustment
      for Stock Splits, Etc.  All references to the number of
      Shares in this Agreement shall be appropriately adjusted to reflect any stock
      split, stock dividend or other recapitalization or change in the Shares which
      may be made by the Company after the date of this Agreement in accordance with
      the Plan.  Any and all shares of Common Stock received by the Employee
      with respect to such Shares as a result of stock dividends, stock splits or
      any
      other form of recapitalization shall also be subject to this
      Agreement.

     

    8.  Notices.  Notices
      required hereunder shall be given in person or by registered mail to the address
      of the Employee shown on the records of the Company, and to the Company at
      its
      principal executive office.

     

    9.  Survival
      of Terms.  This Agreement shall apply to and bind
      Employee and the Company and their respective permitted assignees and
      transferees, heirs, legatees, executors, administrators and legal successors,
      including without limitation the Company’s acquirer in a Change in
      Control.

     

    10. 
Tax
      Withholding.  Notwithstanding anything to the contrary in
      this Agreement, the Company shall be entitled to require payment in cash or
      deduction from other compensation payable to the Employee of any sums required
      by federal, state or local tax law to be withheld with respect to the issuance,
      lapsing of restrictions on or exercise of the Shares.  The Company
      may, in its discretion, allow the Employee to deliver shares of Common Stock
      owned by the Employee duly endorsed for transfer to the Company with an
      aggregate Fair Market Value on the date of delivery equal to the statutory
      minimum sums to be withheld.  The Company shall not

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    be
      obligated to
      deliver any new certificate representing vested Shares to the Employee or his
      or
      her legal representative unless and until the Employee or his or her legal
      representative shall have paid or otherwise satisfied in full the amount of
      all
      federal, state and local taxes applicable to the taxable income of the Employee
      resulting from the grant of the Shares or their vesting.

     

    11.  No
      Section 83(b) Elections.  Because such election could
      have an impact on the Company’s ability to continue as a real estate investment
      trust under the Code (defined below), Employee agrees that Employee will not
      file an election under Section 83(b) of the Internal Revenue Code of 1986,
      as
      amended (the “Code”), with respect to the Shares.  If Employee does
      file a Section 83(b) election then such election shall cause the forfeiture
      of
      all of the Shares, without proration (notwithstanding Section
      1(a)).

     

    12.  Representations.  Employee
      has reviewed with his or her own tax advisors the federal, state, local and
      foreign tax consequences of this investment and the transactions contemplated
      by
      this Agreement.  Employee is relying solely on such advisors and not
      on any statements or representations of the Company or any of its
      agents.  Employee understands that he/she (and not the Company) shall
      be responsible for his/her own tax liability that may arise as a result of
      the
      grant of Shares or the transactions contemplated by this Agreement.

     

    13.  Governing
      Law.  This Agreement shall be governed by and construed
      and enforced in accordance with California law, without giving effect to
      the principles of conflict of laws thereof.

     

    Employee
      represents
      that he/she has read this Agreement and is familiar with its terms and
      provisions.  Employee hereby agrees to accept as binding, conclusive
      and final all decisions or interpretations of the Company’s Board of Directors
      or the Compensation Committee thereof upon any questions arising under this
      Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth
      above.

     

    “COMPANY”

     

    REALTY
      INCOME
      CORPORATION

     

    By:______________________________________________

     

    Name:  Michael
      R. Pfeiffer

     

    Title:        Executive
      Vice President, General Counsel

     

    “EMPLOYEE”

    
                        ______________________________________

     

    Address:

    
                        ______________________________________

     

    

     

    
      
        
        

      

      
        7

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