Exhibit 10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT is
made and entered into this 23 rd day of August, 2005
(“Agreement”), by and between Realty Income
Corporation, a Maryland corporation (the “Company”),
and
(“Indemnitee”).
WHEREAS, the Company has previously
entered into an indemnification agreement with Indemnitee and this
Agreement hereby supersedes the previous indemnification agreement
between Indemnitee and Company; and
WHEREAS, at the request of the
Company, Indemnitee currently serves as a [Director]
[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 [Director] [Officer]
, the Company has agreed to indemnify and to advance expenses and
costs incurred by Indemnitee in connection with any such claims,
suits or proceedings to the maximum extent permitted by law;
and
WHEREAS, the parties by this
Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;
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, as amended (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 15% 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 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 for 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 the date set forth in the first
paragraph of this Agreement.
(e)
“Expenses” shall include all reasonable and
out-of-pocket 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, that is experienced in matters of corporation law and
neither 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 or
witness in 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. If a Change
of Control has not occurred, Independent Counsel shall be selected
by the Board of Directors, with the approval of Indemnitee, which
approval will not be unreasonably withheld. If a Change of
Control has occurred, Independent Counsel shall be selected by
Indemnitee, with the approval of the Board of Directors, which
approval will not be unreasonably withheld.
(g)
“Proceeding” includes any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or
investigative (including on appeal), except one pending or
completed on or before the Effective Date, unless otherwise
specifically agreed in writing by the Company and
Indemnitee.
Section 2.
Services by Indemnitee . Indemnitee will serve as
a [Director] [Officer]
of the
Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue
Indemnitee’s service to the Company beyond any period
otherwise required by law or by other agreements or commitments of
the parties, if any.
Section 3.
Indemnification - General . The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided
in this Agreement and (b) otherwise to the maximum 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, without limitation, the
rights set forth in the other sections of this Agreement, including
any additional indemnification permitted by
Section 2-418(g) of the Maryland General Corporation Law
(“MGCL”).
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 or a witness in any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the
Company. Pursuant to this
2
Section 4, Indemnitee
shall be indemnified against all judgments, penalties, fines and
amounts paid in settlement and all Expenses 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 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) Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in
the case of any criminal Proceeding, Indemnitee had reasonable
cause to believe 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, or is threatened to be, made a party to or a witness
in 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 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) Indemnitee actually received an improper personal benefit
in money, property or services.
Section 6.
Court-Ordered Indemnification . Notwithstanding any
other provision of this Agreement, a court of appropriate
jurisdiction, upon application of Indemnitee and such notice as the
court shall require, may order indemnification in the following
circumstances:
(a)
if it determines Indemnitee is entitled to reimbursement under
Section 2-418(d)(1) of the MGCL, the court shall order
indemnification, in which case Indemnitee shall be entitled to
recover the expenses of securing such reimbursement; or
(b)
if it determines that Indemnitee is fairly and reasonably entitled
to indemnification in view of all the relevant circumstances,
whether or not Indemnitee (i) has met the standards of conduct
set forth in Section 2-418(b) of the MGCL or
(ii) has been adjudged liable for receipt of an improper
personal benefit under Section 2-418(c) of the MGCL, the
court may order such indemnification as the court shall deem
proper. However, indemnification with respect to any
Proceeding by or in the right of the Company or in which liability
shall have been adjudged in the circumstances described in
Section 2-418(c) of the MGCL shall be limited to Expenses
actually and reasonably incurred by him or on his behalf in
connection with a Proceeding.
Section 7.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful . Notwithstanding any other provision of this
Agreement, and without limiting any such provision, 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 for 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 7 for all Expenses actually and reasonably incurred by
him or on his behalf in connection with each successfully resolved
claim, issue or matter, allocated on a reasonable and proportionate
basis. 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 8.
Advance of Expenses . The Company shall advance all
reasonable Expenses actually and reasonably incurred by or on
behalf of Indemnitee in connection with any Proceeding (other than
a Proceeding brought to enforce indemnification under this
Agreement, applicable law, the Charter
3
or Bylaws of the Company,
any agreement or a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board of
Directors) to which Indemnitee is, or is threatened to be,
made a party or a witness, 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 Indemnitee of 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, in
substantially the form attached hereto as Exhibit A or
in such form as may be required under applicable law as in effect
at the time of the execution thereof, to reimburse the portion of
any Expenses advanced to Indemnitee relating to claims, issues or
matters in the Proceeding as to which it shall ultimately be
established that the standard of conduct has not been met and which
have not been successfully resolved as described in
Section 7. To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in
the Proceeding, such Expenses shall be allocated on a reasonable
and proportionate basis. The undertaking required by this
Section 8 shall be an unlimited general obligation by or on
behalf of Indemnitee and shall be accepted without reference to
Indemnitee’s financial ability to repay such advanced
Expenses and without any requirement to post security
therefor.
Section 9.
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
indemnificati
|
