United States

Securities and Exchange Commission
Washington, D.C. 20549


Form 8-K

Current Report


Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of report :  October 16, 2018
(Date of Earliest Event Reported)


(Exact name of registrant as specified in its charter)







(State or Other Jurisdiction of
Incorporation or Organization)


(Commission File Number)


(IRS Employer Identification No.)


11995 El Camino Real, San Diego, California 92130
(Address of principal executive offices)


(858) 284-5000
(Registrant’s telephone number, including area code)


(former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company o




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 5.02        Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Appointment of Sumit Roy as Chief Executive Officer


On October 16, 2018, the Board of Directors (the “Board”) of Realty Income Corporation (the “Company”) appointed Sumit Roy, the Company’s President and Chief Operating Officer, as Chief Executive Officer and to the Board, succeeding John P. Case. Mr. Roy will continue to serve as President. In connection with Mr. Roy’s appointment, the Company increased Mr. Roy’s annual base salary from $550,000 to $850,000 per annum and increased Mr. Roy’s target annual cash bonus for the remainder of 2018 to $1,487,500, which will be pro rated for the period from October 16, 2018 through December 31, 2018.  In addition, the Company granted to Mr. Roy an award of 34,752 restricted shares of the Company’s common stock which will vest 50% on each of October 16, 2021 and 2022, subject to Mr. Roy’s continued employment with the Company through the applicable vesting date.


Information about Mr. Roy, including a biographical summary, information about positions and offices he has held with the Company, his prior compensation arrangements with the Company, and information about his business experience, may be found in the Company’s definitive proxy statement for the 2018 Annual Meeting of Stockholders on Schedule 14A filed on April 2, 2018.


Departure of John P. Case as Chief Executive Officer and Director


On October 16, 2018, the Company and John P. Case agreed that Mr. Case would depart from his role as Chief Executive Officer of the Company and resign as a member of the Board, in each case, effective immediately. In connection with his departure, on October 16, 2018, the Company and Mr. Case entered into a Severance Agreement and General Release (the “Severance Agreement”). Pursuant to the terms of the Severance Agreement, which includes a general release of claims by Mr. Case in favor of the Company, Mr. Case is eligible to receive: (a) a lump-sum cash severance payment of $8,290,792, and (b) group medical insurance paid for by the Company through the earlier of October 31, 2019 or until Mr. Case is covered by another group medical insurance plan. Each outstanding Company equity-based award held by Mr. Case as of the date of termination will be treated in accordance with the terms of the applicable award agreements as though Mr. Case incurred a termination of employment pursuant to Section 10(c) of Mr. Case’s Amended and Restated Employment Agreement with the Company (as amended, the “Employment Agreement”).


The Severance Agreement also provides that Mr. Case will comply with certain existing confidentiality and non-solicitation covenants contained in the Employment Agreement and will not disclose any information or provide any assistance or support to, or collaborate with, any person or entity that undertakes to effect a change in control of the Company or that seeks to influence the management or policies of the Company.  The Severance Agreement also includes a mutual non-disparagement covenant between Mr. Case and the Company.


The foregoing description of the Severance Agreement is not, and does not purport to be, complete and is qualified in its entirety by reference to a copy of the Severance Agreement filed as Exhibit 10.1 hereto and incorporated herein by reference.



Item 7.01         Regulation of FD Disclosure.


On October 16, 2018, the Company issued a press release announcing the appointment of Mr. Roy as Chief Executive Officer and the departure of Mr. Case. A copy of this press release is furnished herewith as Exhibit 99.1.


The information in Item 7.01 of this Current Report on Form 8-K and the information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.


Item 9.01         Financial Statements and Exhibits


(d)  Exhibits



Severance Agreement and General Release, dated October 16, 2018




Press Release issued by Realty Income Corporation dated October 16, 2018





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated: October 17, 2018











Michael R. Pfeiffer



Executive Vice President, General Counsel and Secretary


Exhibit 10.1




This Severance Agreement and General Release (this “ Severance Agreement ”) is entered into as of October 16, 2018, by and between Realty Income Corporation (the “ Company ”), and John P. Case (hereinafter “ Executive ”).


Effective as of the date of this Severance Agreement, Executive’s employment with the Company and its subsidiaries and affiliates shall terminate.


IN CONSIDERATION of the severance compensation as herein provided, to which Executive is not otherwise entitled, Executive 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 Executive 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 Executive’s employment with the Company, or the termination of Executive’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 Executive to the validity of his release of claims under the Age Discrimination in Employment Act, or any other claims of Executive that cannot, by statute, lawfully be waived by this Severance Agreement.  Executive is not waiving his rights to enforce this Agreement, not waiving vested rights under any other agreement between the parties, not waiving indemnification and not waiving legal fees with respect thereto.


IN FURTHER CONSIDERATION THEREOF, Executive 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.  Executive 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.  Executive 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 Executive 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 Executive to challenge the enforceability of his waiver of rights under the Age Discrimination in Employment Act.




As consideration for entering into this Severance Agreement, Executive shall receive the following severance compensation payable in accordance with the terms of ¶ 10 of that certain Amended and Restated Employment Agreement between the parties dated as of September 3, 2013 (as amended, the “ Employment Agreement ”) (to the extent applicable):


a)                                   The total gross sum of $8,290,792, payable in a lump sum no later than the sixtieth (60 th ) day following the date of this Severance Agreement, and subject to applicable withholdings; and


b)                                   Group medical insurance paid for by the Company for Executive and his dependents (if currently covered) through October 31, 2019, or until Executive becomes covered under another group medical insurance plan, whichever occurs first.  Executive shall immediately notify the Company upon becoming eligible for coverage under another group medical insurance plan.


Solely for purposes of the treatment (including any accelerated vesting) of any outstanding Company equity-based awards held by the Executive, Executive shall be deemed to have incurred a termination of employment pursuant to ¶ 10(c) of the Employment Agreement as of the date hereof.


Executive’s right to receive and retain the payments and benefits described above shall be subject to and contingent upon the execution and non-revocation by Executive of this Severance Agreement.


Except as set forth in this Severance Agreement, or as otherwise mandated by applicable law, Executive 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, Executive agrees to preserve the confidentiality of all trade secrets and other confidential information of the Released Parties.  Executive agrees to comply, in all respects, with the on-going confidentiality and non-solicitation provisions contained in ¶ 12 of the Employment Agreement between the parties.  In addition, Executive further agrees that he shall not disclose any information regarding the Company or otherwise provide any assistance or support to, or collaborate with, any person or entity that undertakes any action to directly or indirectly: (i) effect a change of control of the Company; or (ii) seeks to influence the management or policies of the Company, including through the election of one or more persons to the Company’s Board of Directors.  Notwithstanding the foregoing, nothing in this Agreement is intended to or shall prevent Executive from communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing such information to Executive’s attorney or in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).




Executive agrees that, from and after the date of this Severance Agreement, he will not make any statement, publicly or privately, which disparages or would reasonably be expected to disparage the Company, any of its subsidiaries or affiliates or any of their respective employees, officers or directors. The Company agrees that, from and after the date of this Severance Agreement, the Company will not in public statements on behalf of and made in the name of the Company make any statement which disparages or would reasonably be expected to disparage Executive, and agrees to instruct its senior officers (senior vice presidents and above) and directors, from and after the date of this Severance Agreement, not to make any statement, publicly or privately, which disparages or would reasonably be expected to disparage Executive.


Executive agrees to cooperate with the Company in accomplishing a smooth and orderly transition in the transfer of responsibilities of Executive to other employees of the Company, particularly including pending matters of which Executive has the principal knowledge and background information.  In this regard, Executive 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 Executive to any additional compensation beyond the severance compensation specified herein above, so long as such cooperation and responses do not unreasonably interfere with Executive’s other gainful employment or efforts to secure gainful employment.


By signing this Severance Agreement, Executive represents warrants and agrees as follows:


(1)                              Executive has carefully read this Severance Agreement and understands all of its respective terms.


(2)                              Executive 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:





Executive 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)                              Executive 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)                              Executive 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 Executive in breach hereof.  Executive further agrees that in the event an action or proceeding is instituted by Executive 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 Executive 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 Executive, 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)                              Executive 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 Executive is under age 40 as of the date he signs this Severance Agreement, he understands that the acceptance procedures of this ¶ 7 apply to him .  Executive 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”).


(8)                              If Executive is age 40 or over as of the date he signs this Severance Agreement, he understands that the acceptance procedures of this ¶ 8 apply to him .  Executive 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) Executive 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 Executive signs this Severance Agreement without revoking it (“ Effective Date ”); and e) this Severance Agreement does not waive or release any rights or claims that Executive 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.

















/s/ Michael D. McKee


/s/ John P. Case



Michael D. McKee

John P. Case


Chairman of the Board of Directors





Exhibit 99.1










Company Reaffirms AFFO Per Share Guidance for 2018


SAN DIEGO, Oct. 16, 2018 -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company®, today announced that Sumit Roy, the Company’s President and Chief Operating Officer, has been appointed Chief Executive Officer and to the Board of Directors, effective immediately, succeeding John P. Case.


“Sumit has been a valuable contributor to our senior management team since joining Realty Income in 2011, and his leadership as President and COO has been instrumental in building Realty Income into the successful Company it is today,” said Michael D. McKee, Chairman of the Board of Directors. “Sumit’s deep understanding of our business, operations and strategy, and appreciation for our hard-working employees, make him the perfect choice to seamlessly take on the responsibilities of President and CEO. We are confident in Sumit’s ability to lead the Company, execute on our strategic priorities and drive shareholder value.”


“I am honored to serve as Realty Income’s President and CEO during this exciting time in the Company’s history,” said Mr. Roy. “Driven by the efforts of our experienced management team and dedicated employees, I am confident that Realty Income is well-positioned to continue building upon the Company’s positive momentum. I thank John for his support and guidance over the years. Our diversified, high-quality portfolio, operations and investment opportunities remain strong. I look forward to continue working closely with the Board and our talented team to evolve and execute on our strategy, and I expect a seamless transition.”


Mr. Case said, “I have enjoyed my eight-plus years at Realty Income and especially working closely with Sumit for the last seven years at the Company, and I am confident that he is the natural choice to be the CEO. I believe Realty Income is well-positioned for continued growth and success. The Company has a bright future and I wish the best for Realty Income’s outstanding team members. “


Mr. McKee continued, “On behalf of the Board, I thank John for his service and wish him continued success. We are proud of our team’s many accomplishments for our shareholders while John was CEO. We are confident about the future of the Company and continue to believe we are led by one of the most talented management teams in the industry.”


The Company reaffirms its previously announced guidance of AFFO per share for 2018 of $3.16 to $3.21.


About Sumit Roy


Mr. Roy has served as Realty Income’s President since 2015 and as Chief Operating Officer since 2014. As President and COO Mr. Roy has helped oversee the Company’s investments and business operations, including Acquisitions, Dispositions, Asset Management, Portfolio Management, Information Technology, Internal Audit and Human Resources. He also served as the Chairman of the Investment Committee and a member of the Executive Management Team.


He joined Realty Income in 2011 and was promoted to Chief Investment Officer in 2013. Prior to joining the Company, Mr. Roy was an Executive Director at UBS Investment Bank where he worked for seven years. Prior to joining UBS, he worked in investment banking at Merrill Lynch, and as a Principal in technology consulting at Cap Gemini.


Mr. Roy has a Bachelors and Masters degree in Computer Science. He also holds a Masters in Business Administration in Finance and Economics from the University of Chicago, Booth School of Business.


About the Company


Realty Income, The Monthly Dividend Company®, is an S&P 500 Company dedicated to providing shareholders with dependable monthly income. The Company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 5,400 real estate properties owned under long-term lease agreements with regional and national commercial tenants. To date, the Company has declared 579 consecutive common stock monthly dividends throughout its 49-year operating history and increased the dividend 98 times since Realty Income’s public listing in 1994 (NYSE: O). Additional information about the Company can be obtained from the corporate website at www.realtyincome.com.




Forward-Looking Statements


Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, tenant financial health, the availability of capital to finance planned growth, continued volatility and uncertainty in the credit markets and broader financial markets, property acquisitions and the timing of these acquisitions, charges for property impairments, and the outcome of any legal proceedings to which the company is a party, as described in the company’s filings with the Securities and Exchange Commission. Consequently, forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.


Investor Contacts:


Paul Meurer

EVP, CFO and Treasurer

(858) 284-5000


Jonathan Pong, CFA, CPA

VP, Capital Markets

(858) 284-5177


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