As previously disclosed, on October 29, 2023, Spirit Realty Capital, Inc., a Maryland corporation (Spirit), entered into an
Agreement and Plan of Merger (as amended from time to time, the Merger Agreement) with Realty Income Corporation (Realty Income), a Maryland corporation and Saints MD Subsidiary, Inc., a Maryland corporation and wholly owned
subsidiary of Realty Income (Merger Sub). Pursuant to the terms and conditions of the Merger Agreement, upon the closing, Spirit will be merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the
Merger).
In connection with the proposed Merger, Realty Income filed with the U.S. Securities and Exchange Commission (the
SEC) a registration statement on Form S-4 containing a proxy statement/prospectus, as amended, and Spirit filed a definitive proxy statement and Realty Income filed a prospectus with the SEC, each
dated December 19, 2023 (collectively, the proxy statement/prospectus). Spirit first mailed the proxy statement/prospectus to its stockholders on or about December 19, 2023.
Following the announcement of the Merger Agreement, and as of the date of this Current Report on Form
8-K, purported stockholders of Spirit have filed four lawsuits challenging disclosures related to the Merger (the Spirit Complaints). The Spirit Complaints are Thompson v. Spirit Realty
Capital, Inc., et. al., Case No. 2:23cv13219 (E.D. Mich Dec 18, 2023) (the Thompson Complaint); Kent v. Spirit Realty Capital, Inc., et. al., Case No.
2:23-cv-13232 (E.D. Mich Dec 19, 2023) (the Kent Complaint); Snow v. Kevin Charlton, et. al., Case No. 72567/2023 (Sup. Ct. Westchester Cnty.
2023) (the Snow Complaint); and Randall v. Spirit Realty Capital, Inc. et al Case No. 650075/2024 (Sup. Ct. New York Cnty. 2024) (the Randall Complaint).
The Thompson, Kent and Randall Complaints name Spirit and the members of the Spirit board of directors as defendants. The Snow Complaint names
Spirit, the members of the Spirit board of directors and Realty Income as defendants.
The Thompson and Kent Complaints allege that Spirit
and the members of the Spirit board of directors violated Section 14(a) of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 14a-9 promulgated thereunder by preparing and
disseminating a registration statement that misstates or omits certain allegedly material information. They also allege that the members of the Spirit board of directors violated Section 20(a) of the Exchange Act by causing Spirit to
disseminate a misleading registration statement.
The Snow Complaint alleges violations of Maryland state law based on alleged breaches of
fiduciary duty, allegedly misleading statements and omissions in the proxy statement/prospectus, and alleged aiding and abetting of such violations. It also alleges a claim under New York law for negligent misrepresentation and concealment.
The Randall Complaint alleges violations of Maryland state law based on alleged breaches of fiduciary duty, allegedly misleading statements
and omissions in the proxy statement/prospectus, and alleged aiding and abetting of such violations.
Each of the Spirit Complaints seeks,
among other things, injunctive relief enjoining Spirit from holding the stockholder vote to approve the Merger and/or the consummation of the Merger, rescission or rescissory damages in the event the Merger is consummated, and an award of the
plaintiffs costs, including attorneys and experts fees.
In addition to the Spirit Complaints, beginning on
December 19, 2023, purported stockholders of Spirit sent demand letters (the Demands, and together with the Spirit Complaints, the Matters) alleging similar deficiencies regarding the disclosures made in the proxy
statement/prospectus.
All of the defendants believe that the Matters are without merit. However, litigation is inherently uncertain and
there can be no assurance regarding the likelihood that the defendants defense of the actions will be successful. Additional lawsuits arising out of the Merger may also be filed in the future. While Spirit and Realty Income believe that the
disclosures set forth in the proxy statement/prospectus comply fully with applicable law, to moot plaintiffs disclosure claims and to avoid nuisance, potential expense and delay, Spirit and Realty Income have determined to
voluntarily supplement the proxy statement/prospectus with the below disclosures. Nothing in the below supplemental disclosures shall be deemed an admission of the legal necessity or materiality under applicable law of any of the
disclosures set forth herein or in the proxy statement/prospectus. To the contrary, Spirit and Realty Income deny all allegations in the Matters that any additional disclosure was or is required.