8-KLeadership ChangesMaterial AgreementsExhibits & Filings

REALTY INCOME CORP 8-K Report, Material Agreement (Jun 19, 2013)

Filed June 19, 2013For Securities:O

Summary

Realty Income Corporation (O) filed an 8-K on June 19, 2013, primarily detailing changes to its executive compensation and equity awards. The Compensation Committee, advised by an independent consultant, approved amendments to executive employment agreements. These amendments will accelerate the vesting of all outstanding restricted stock for named executive officers upon termination without cause or constructive termination. Additionally, the company announced the accelerated vesting of all restricted stock awards originally granted with a ten-year vesting schedule, effective July 1, 2013. This action was taken to align with market competitive practices, as ten-year vesting periods are significantly longer than those typically seen in the company's peer group. The accelerated vesting applies to awards that have been outstanding for at least five years, aligning with the company's current five-year vesting schedule for new awards.

Key Highlights

  • 1Realty Income Corporation's Compensation Committee approved amendments to executive employment agreements to accelerate full vesting of restricted stock upon termination without cause or constructive termination.
  • 2All restricted stock awards with an original ten-year vesting schedule will have their vesting accelerated, effective July 1, 2013.
  • 3The accelerated vesting is intended to align executive compensation practices with industry peers, who generally have shorter vesting periods.
  • 4Awards being accelerated have been outstanding for at least five years, consistent with Realty Income's current five-year vesting schedule for new awards.
  • 5Named executive officers Thomas A. Lewis, Gary M. Malino, Paul M. Meurer, and Michael R. Pfeiffer will benefit from these accelerated vesting provisions for a specific number of shares.
  • 6President and Chief Investment Officer John P. Case did not hold any ten-year vesting restricted stock and therefore had no awards accelerated under this program.
  • 7The filing incorporates by reference the forms of Amendment to Employment Agreement and Addendum to Restricted Stock Agreement as exhibits.

Frequently Asked Questions

The key changes involve accelerating the vesting of restricted stock. First, for named executive officers, all outstanding restricted stock will vest immediately if their employment is terminated without cause or if they experience a constructive termination. Second, all restricted stock awards originally scheduled to vest over ten years will now vest in full on July 1, 2013.

The company accelerated these awards to align with market competitive practices. The Compensation Committee noted that ten-year vesting schedules are significantly longer than those typically used by companies in Realty Income's peer group. Additionally, the awards being accelerated have been outstanding for at least five years, bringing them in line with the company's current practice of using vesting schedules not exceeding five years for awards granted since 2009.

The accelerated vesting upon termination without cause or constructive termination applies to the Company's named executive officers. The accelerated vesting of ten-year restricted stock awards affects executives who held such awards, specifically Thomas A. Lewis, Gary M. Malino, Paul M. Meurer, and Michael R. Pfeiffer. John P. Case did not have any ten-year vesting restricted stock awards.

This specific 8-K filing does not contain information related to the company's financial performance or future outlook. It solely focuses on amendments to employment agreements and the acceleration of equity award vesting for executive officers.