Exhibit 10.1

 

GLOBAL NET LEASE, INC.

2018 ADVISOR MULTI-YEAR OUTPERFORMANCE AGREEMENT

 

This 2018 ADVISOR MULTI-YEAR OUTPERFORMANCE AGREEMENT (this “Agreement”) made as
of July 19, 2018, by and among GLOBAL NET LEASE INC., a Maryland corporation
(the “Company”), its subsidiary GLOBAL NET LEASE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership and the entity through which the Company conducts
substantially all of its operations (the “Partnership”), and GLOBAL NET LEASE
ADVISORS, LLC, a Delaware limited liability company, the Company’s manager (the
“Advisor”).

 

RECITALS

 

WHEREAS, the Advisor provides services to the Company pursuant to the Fourth
Amended and Restated Advisory Agreement by and among the Company, the
Partnership and the Advisor, dated as of June 2, 2015, as amended from time to
time (the “Advisory Agreement”).

 

WHEREAS, the Compensation Committee of the Board of Directors of the Company
(the “Board”), pursuant to power and authority delegated by the Board, approved
this Agreement to provide the Advisor with the incentive compensation described
in this Agreement (the “Award”) and thereby provide additional incentive for the
Advisor to promote the progress and success of the business of the Company and
its Affiliates, including the Partnership. This Agreement evidences the Award
which is subject to the terms and conditions set forth herein and in the
Partnership Agreement (as defined herein).

 

NOW, THEREFORE, the Company, the Partnership and the Advisor agree as follows:

 

1.                  Administration. The Award granted under this Agreement shall
be administered by the Compensation Committee of the Board, or such other
committee as may be delegated the power to administer the Award by the Board
from time to time (as applicable, the “Committee”); provided that all powers of
the Committee hereunder can be exercised by the full Board if the Board so
elects. The Board may also elect to administer this Agreement, in which case all
the functions of the Committee shall be exercised by the Board, and the Board
shall be considered the “Committee” hereunder. The Committee shall have the
discretionary authority to make all determinations regarding the Award,
including, without limitation, the interpretation and construction of the Award
and the determination of relevant facts; provided such determinations are made
in good faith and are consistent with the purpose and intent of the Award.
Except as expressly provided herein, no such action by the Committee shall
adversely affect the rights of the Advisor to any earned and outstanding Award
LTIP Units (as defined below). Subject to the terms hereof, all decisions made
by the Committee shall be final, conclusive and binding on all persons,
including the Company, the Partnership, the Advisor and any Transferee. No
member of the Committee, nor any other member of the Board or any officer or
employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the Award, and all members of the Committee and each other
member of the Board and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and held
harmless by the Company in respect of any such action, determination or
interpretation.

 

 

 

 

2.                  Definitions. Capitalized terms used herein but not otherwise
defined are set forth in Exhibit A.

 

3.                  Outperformance Award.

 

a.                   Grant; Performance Period; Valuation Date. On the date of
this Agreement (the “Grant Date”), the Advisor was granted the Award, consisting
of the issuance, effective as of the Effective Date, to the Advisor of 2,554,930
LTIP Units (the “Award LTIP Units”), which will be subject to vesting and
forfeiture as provided in this Section 3 based on performance during the period
(the “Performance Period”) commencing on the Effective Date and ending on the
earlier of (i) June 2, 2021, (ii) the effective date of any Change of Control,
and (iii) the effective date of any termination of the Advisor’s service as
advisor of the Company (such end date, as applicable, the “Valuation Date”).
1,277,465 Award LTIP Units (the “Absolute TSR Award LTIPs”) may be earned based
on Absolute TSR during the Performance Period and 1,277,465 Award LTIP Units
(the “Relative TSR Award LTIPs”) may be earned based on Relative TSR during the
Performance Period.

 

b.                  Determination Date; Outperformance Amounts.

 

(i)                 Determination Date. On a date as soon as practicable
following the Valuation Date (the “Determination Date”), but as of the Valuation
Date, the Committee shall determine the number of Award LTIP Units that have
been earned as of the Valuation Date based on the Absolute TSR Amount, the
Relative TSR Amount and the Total Outperformance Amount, in each case, as
calculated in accordance with this Section 3(b) by an independent consultant
engaged by the Committee and as approved by the Committee in its reasonable and
good faith discretion.

 

(ii)              Absolute TSR Amount. Subject to the provisions of Sections
3(c) and 3(d) below and the paragraph immediately below the following table, the
following table sets forth the number of Absolute TSR Award LTIPs that shall be
earned based on the Absolute TSR as of the Valuation Date (such number of earned
Absolute TSR Award LTIPs, the “Absolute TSR Amount”):

 

Performance Level (% of
Absolute TSR Award LTIPs
Earned) Absolute TSR Absolute TSR Amount (# of
Absolute TSR Award LTIPs
Earned) Below Threshold (0%) Less than 24.0% 0 Threshold (25%) 24.0% 319,366
Target (50%) 30.0% 638,733 Maximum (100%) 36.0% or higher 1,277,465

 

No Absolute TSR Award LTIPs will be earned if the Absolute TSR is less than 24
percent. If the Absolute TSR is more than 24 percent but less than 30 percent,
or more than 30 percent but less than 36 percent, the percentage of the Absolute
TSR Award LTIPs earned will be determined using linear interpolation as between
those tiers, respectively.

 

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(iii)            Relative TSR Amount. Subject to the provisions of Section 3(c)
and 3(d) below and the paragraph immediately below the following table, the
following table sets forth the number of Relative TSR Award LTIPs that shall be
earned based on Relative TSR as of the Valuation Date (such number of earned
Relative TSR Award LTIPs, the “Relative TSR Amount”):

 

Performance Level (% of
Relative TSR Award LTIPs
Earned) Relative TSR Excess Relative TSR Amount (# of
Relative TSR Award LTIPs
Earned) Below Threshold (0%) Less than -600 bps 0 Threshold (25%) -600 bps
319,366 Target (50%) 0 bps 638,733 Maximum (100%) +600 bps or more 1,277,465

  

No Relative TSR Award LTIPs will be earned if the Relative TSR Excess is below
-600 bps. If the Relative TSR Excess is more than -600 bps but less than 0 bps,
or more than 0 bps but less than +600 bps, the percentage of the Relative TSR
Award LTIPs earned will be determined using linear interpolation as between
those tiers, respectively.

 

(iv)             Total Outperformance Amount. The “Total Outperformance Amount”
as of the Valuation Date shall be the algebraic sum of: (A) the Absolute TSR
Amount and (B) the Relative TSR Amount.

 

c.                   Change of Control. If the Valuation Date is the effective
date of a Change of Control, then the calculations contemplated by Section 3(b)
shall be made based on actual performance as of (and including) the Change of
Control; provided, however, that (i) the Absolute TSR Amount shall be determined
(without pro-ration) based on performance as of (and including) the last Trading
Day prior to such date, as measured against the Absolute TSR hurdles set forth
in Section 3(b)(ii) above, and as such Absolute TSR hurdles are reduced on a
pro-rata basis based on the number of full days elapsed in the Performance
Period through such effective date of a Change of Control, and (ii) the Relative
TSR Amount shall be determined (without pro-ration) based on the performance as
of (and including) the last Trading Day prior to such date.

 

d.                  Termination of Advisor. If the Valuation Date is the
effective date of any termination of Advisor’s service as advisor of the Company
in accordance with the Advisory Agreement for any reason, then the calculations
contemplated by Section 3(b) shall be made based on actual performance as of
(and including) the effective date of the termination as if such termination had
not occurred; provided, however, that (i) the Absolute TSR Amount shall be
determined (without pro-ration) based on performance as of (and including) the
last Trading Day prior to such date, as measured against the Absolute TSR
hurdles set forth in Section 3(b)(ii) above, and as such Absolute TSR hurdles
are reduced on a pro-rata basis based on the number of full days elapsed in the
Performance Period through such effective date of termination, and (ii) the
Relative TSR Amount shall be determined (without pro-ration) based on the
performance as of (and including) the last Trading Day prior to such date.

 

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e.                   Vesting. Any Award LTIP Units that are earned pursuant to
Section 3(b) shall be deemed to be fully vested as of the Valuation Date.
Thereafter, subject to and in accordance with the terms of the Partnership
Agreement, the Advisor, in its sole discretion, shall be entitled to convert any
earned and vested Award LTIP Units into OP Units (as so converted, the “Award OP
Units”).

 

f.                    Forfeiture. Any Award LTIP Units that do not become earned
and vested pursuant to, and in accordance with, this Section 3 shall
automatically and without notice be forfeited on the Determination Date,
effective as of the Valuation Date, without payment of any consideration by the
Partnership or the Company, and neither the Advisor nor any of its successors,
heirs, assigns, members or their respective assigns or personal representatives
will thereafter have any further rights or interests in such forfeited Award
LTIP Units.

 

4.                  Rights of Advisor. The Advisor shall have no rights with
respect to this Agreement (and the Award evidenced hereby) unless the Advisor
shall have accepted this Agreement prior to the close of business on the Grant
Date by signing and delivering to the Partnership a copy of this Agreement. Upon
acceptance of this Agreement by the Advisor, the Partnership Agreement shall be
amended to reflect the issuance to the Advisor of the Award LTIP Units so
accepted. Thereupon, the Advisor shall have all the rights of a Limited Partner
of the Partnership with respect to the Award LTIP Units, as set forth in the
Partnership Agreement, subject, however, to the restrictions and conditions
specified herein. Award LTIP Units constitute and shall be treated for all
purposes as the property of the Advisor, subject to the terms of this Agreement
and the Partnership Agreement.

 

5.                  Distributions. The holder of Award LTIP Units shall be
entitled to receive distributions with respect to the Award LTIP Units as
described below and in accordance with the Partnership Agreement. For purposes
of the Partnership Agreement, the LTIP Unit Distribution Participation Date with
respect to the Award LTIP Units shall be the Valuation Date. Pursuant to the
Partnership Agreement, and subject in all respects to the terms and conditions
set forth therein, a holder of the Award LTIP Units shall be entitled to
distributions per Award LTIP Unit as follows: (i) during the Performance Period,
as and when distributions are made with respect to OP Units, distributions in an
amount equal to ten percent (10%) of the amount distributable with respect to an
OP Unit; (ii) following the Valuation Date, only with respect to each Award LTIP
Unit that has been earned in accordance with Section 3, distributions in the
same amount and at the same time as distributions on an OP Unit; and (iii)
promptly after the Determination Date, only with respect to each Award LTIP Unit
earned in accordance with Section 3, a priority catch-up distribution in an
amount in cash equal to the aggregate amount of cash distributed with respect to
an OP Unit during the Performance Period less the aggregate amount distributed
with respect to such Award LTIP Unit during the Performance Period. All
distributions paid with respect to Award LTIP Units, both before and after the
LTIP Unit Distribution Participation Date, shall be fully vested and
non-forfeitable when paid, whether or not the underlying Award LTIP Units have
been earned in accordance with Section 3.

 

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6.                  Restrictions on Transfer. Except as otherwise approved by
the Committee in its sole discretion, none of the Award LTIP Units granted
hereunder nor any of the Award OP Units shall be sold, assigned, transferred,
pledged, hypothecated, given away or in any other manner disposed of,
encumbered, whether voluntarily or by operation of law (each such action a
“Transfer”). Any Transferee approved by the Committee must agree in writing with
the Company and the Partnership to be bound by all the terms and conditions of
this Agreement and that subsequent transfers shall be prohibited except those in
accordance with this Section 6. Additionally, all Transfers of Award LTIP Units
or Award OP Units must be in compliance with all applicable securities laws
(including, without limitation, the Securities Act), and the applicable terms
and conditions of the Partnership Agreement. In connection with any Transfer of
Award LTIP Units or Award OP Units, the Partnership may require the Advisor to
provide an opinion of counsel, satisfactory to the Partnership, that such
Transfer is in compliance with all federal and state securities laws (including,
without limitation, the Securities Act). Any attempted Transfer of Award LTIP
Units or Award OP Units not approved by the Committee or otherwise in accordance
with the terms and conditions of this Section 6 shall be null and void, and the
Partnership shall not reflect on its records any change in record ownership of
any Award LTIP Units or Award OP Units as a result of any such Transfer, shall
otherwise refuse to recognize any such Transfer and shall not in any way give
effect to any such Transfer of any Award LTIP Units or Award OP Units. Except as
provided in this Section 6, this Agreement is personal to the Advisor, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise.

 

7.                  Changes in Capital Structure. If (i) the Company shall at
any time be involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of all or substantially all of the
assets or stock of the Company or other transaction similar thereto, (ii) any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, significant repurchases of stock, or other similar change
in the capital stock of the Company or the Partnership, (iii) any cash dividend
or other distribution to holders of shares of Common Stock or Partnership Units
shall be declared and paid other than in the ordinary course, or (iv) any other
extraordinary corporate event shall occur that in each case in the good faith
judgment of the Committee necessitates action by way of equitable or
proportionate adjustment in the terms of this Agreement or the Award LTIP Units
to avoid distortion in the value of this Award, the Committee shall, taking into
account, among other factors, the operation of the Conversion Factor and other
provisions of the Partnership Agreement, make equitable or proportionate
adjustment and take such other action as it deems necessary to maintain the
Advisor’s rights hereunder so that they are substantially proportionate to the
rights existing under this Award and the terms of the Award LTIP Units prior to
such event, including, without limitation: (A) interpretations of or
modifications to any defined term in this Agreement; (B) adjustments in any
calculations provided for in this Agreement, and (C) substitution of other
awards; provided, however any such adjustment shall be subject in all respects
to, and shall not conflict with, the Partnership Agreement, as the Partnership
Agreement may be amended from time to time in accordance with its terms, solely
in connection with any adjustment or action by the Committee pursuant to this
Section 7. All adjustments pursuant to this Section 7 made by the Committee
shall be final, binding and conclusive.

 

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8.                  Miscellaneous.

 

a.                  Amendments. This Agreement may be amended or modified only
with the consent of the Company and the Partnership acting through the
Committee; provided that any such amendment or modification that adversely
affects the rights of the Advisor hereunder must be consented to by the Advisor
to be effective as against it. Notwithstanding the foregoing, this Agreement may
be amended in writing signed only by the Company and the Partnership to correct
any errors or ambiguities in this Agreement or to make such changes that do not
adversely affect the Advisor’s rights hereunder.

 

b.                  Legend. The records of the Partnership evidencing the Award
LTIP Units and Award OP Units shall bear an appropriate legend, as determined by
the Partnership in its sole discretion, to the effect that such Award LTIP Units
and Award OP Units are subject to restrictions as set forth herein and in the
Partnership Agreement.

 

c.                  Compliance with Law. Notwithstanding any provision of this
Agreement to the contrary, no Award LTIP Units will become vested, earned or
payable, and no dividends or distributions will be paid, at a time that any such
vesting, earning or payment would result in a violation of any applicable
securities law.

 

d.                  Advisor Representations; Registration.

 

(i)                 The Advisor hereby represents and warrants that (A) it
understands that it is responsible for consulting its own tax advisor with
respect to the application of the U.S. federal income tax laws, and the tax laws
of any state, local or other taxing jurisdiction to which the Advisor is or by
reason of this Award may become subject, to its particular situation; (B) the
Advisor has not received or relied upon business or tax advice from the Company,
the Partnership or any of their respective Affiliates, employees, agents,
consultants or advisors, in their capacity as such; (C) the Advisor provides
services to the Partnership on a regular basis and in such capacity has access
to such information, and has such experience of and involvement in the business
and operations of the Partnership, as the Advisor believes to be necessary and
appropriate to make an informed decision to accept this Award; (D) Award LTIP
Units are subject to substantial risks; (E) the Advisor has been furnished with,
and has reviewed and understands, information relating to this Award; (F) the
Advisor has been afforded the opportunity to obtain such additional information
as it deemed necessary before accepting this Award; and (G) the Advisor has had
an opportunity to ask questions of representatives of the Partnership and the
Company, or persons acting on their behalf, concerning this Award.

 

(ii)              The Advisor hereby acknowledges that: (A) there is no public
market for Award LTIP Units or Award OP Units and neither the Partnership nor
the Company has any obligation or intention to create such a market; (B) sales
and other Transfers of Award LTIP Units and Award OP Units are subject to
restrictions under the Securities Act and applicable state securities laws; and
(C) because of the restrictions on Transfer of Award LTIP Units and Award OP
Units set forth in the Partnership Agreement and in this Agreement, the Advisor
may have to bear the economic risk of its ownership of the Award LTIP Units
covered by this Award for an indefinite period of time.

 

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e.                   Section 83(b) Election. In connection with the issuance of
LTIP Units pursuant to this Agreement, the Advisor may elect to include in gross
income for the year in which the Grant Date occurs the applicable Award LTIP
Units pursuant to an election under Section 83(b) of the Code in substantially
the form attached hereto as Exhibit B. The Advisor agrees to file such election
(or to permit the Partnership to file such election on the Advisor’s behalf)
within thirty (30) days after the Grant Date with the IRS Service Center where
the Advisor files its personal income tax returns, provide a copy of such
election to the Partnership and the Company.

 

f.                    Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not so held invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect.

 

g.                  Governing Law. This Agreement is made under, and will be
construed in accordance with, the laws of State of Delaware, without giving
effect to the principles of conflict of laws of such state.

 

h.                  No Obligation to Continue Service as a Consultant or
Advisor. Neither the Company nor any Affiliate is obligated solely by, or solely
as a result of, this Agreement to continue to have the Advisor as a consultant,
advisor or other service provider and this Agreement shall not interfere in any
way with the right of the Company or any Affiliate to terminate the Advisor’s
service relationship in accordance with the Advisory Agreement.

 

i.                    Notices. Any notice to be given to the Company shall be
addressed to the Secretary of the Company at 405 Park Avenue, 3rd Floor, New
York, New York, 10022, and any notice to be given the Advisor shall be addressed
to the Advisor at the Advisor’s address as it appears on the records of the
Company, or at such other address as the Company or the Advisor may hereafter
designate in writing to the other.

 

j.                    Withholding and Taxes. The Advisor shall be solely
responsible for all federal, state, local, foreign, or other taxes or any taxes
under the Federal Insurance Contributions Act with respect to this Award.
Notwithstanding the foregoing, if at any time the Company or Partnership are
required to withhold any such taxes, the Advisor shall make arrangements
satisfactory to the Committee regarding the payment of any United States
federal, state, local, foreign or other taxes required by law to be withheld
with respect to such amount. The obligations of the Company under this Agreement
will be conditional on such payment or arrangements, and the Company and its
affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the Advisor with respect to this
Award (including, with respect to distributions in respect of the Award LTIP
Units). So long as the Advisor holds any Award LTIP Units, the Advisor shall
disclose to the Partnership in writing such information as may be reasonably
requested with respect to ownership of LTIP Units as the Partnership may deem
reasonably necessary to ascertain and to establish compliance with provisions of
the Code applicable to the Partnership or to comply with requirements of any
other appropriate taxing authority.

 

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k.                  Headings. The headings of paragraphs hereof are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

 

l.                    Counterparts. This Agreement may be executed in multiple
counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.

 

m.                Successors and Transferees. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and any successors to or
Transferees the Company and the Partnership, on the one hand, and any successors
to or Transferees of the Advisor, on the other hand, by will or the laws of
descent and distribution, but this Agreement shall not otherwise be assignable
or otherwise subject to Transfer by the Advisor.

 

n.                  Section 409A. This Agreement shall be construed,
administered and interpreted in accordance with a good faith interpretation of
Section 409A of the Code. The Award and all Award LTIP Units under this
Agreement are intended to be exempt from, or comply with, Section 409A of the
Code and shall be interpreted in accordance with such intent. Any provision of
this Agreement that is inconsistent with Section 409A of the Code, or that may
result in penalties under Section 409A of the Code, shall be amended, with the
reasonable cooperation of the Advisor and the Company and the Partnership, to
the extent necessary to exempt it from, or bring it into compliance with,
Section 409A of the Code. Notwithstanding anything contained herein, the Company
and the Partnership make no representations that the payments and benefits
provided under this Agreement comply with Section 409A and in no event shall the
Company or the Partnership be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by or imposed upon
the Advisor or any transferee thereof for failure to comply with, or satisfy and
exemption from, Section 409A of the Code.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first written above.

 

  GLOBAL NET LEASE, INC.           By: /s/ James Nelson       Name:   James
Nelson       Title:     Chief Executive Office                         GLOBAL
NET LEASE OPERATING
PARTNERSHIP, L.P.           By: Global Net Lease, Inc., its general partner    
                    By: /s/ James Nelson       Name:   James Nelson       Title:
    Chief Executive Office                         GLOBAL NET LEASE ADVISORS,
LLC           By: GLOBAL NET LEASE SPECIAL         LIMITED PARTNER, LLC, its
member                         By: AR CAPITAL GLOBAL HOLDINGS, LLC,
its member                         By: AR GLOBAL INVESTMENTS, LLC,
its member                         By: /s/ Michael Anderson       Name:  
Michael Anderson       Title:     Authorized Signatory  

  

 

[Signature Page to 2018 Advisor Multi-Year Outperformance Agreement]

 

 

 

EXHIBIT A

DEFINITIONS

 

“Absolute TSR” means the Company’s Total Shareholder Return .

 

“Affiliate” means (A) with respect to any individual Person, any member of the
immediate family of such Person or a trust established for the benefit of such
member, (B) any Person that, directly or indirectly, controls or is controlled
by or is under common control with such Person, (C) any other Person that owns,
beneficially, directly or indirectly, 10% or more of the outstanding capital
stock, shares or equity interests of such Person, or (D) any officer, director,
employee, partner, member, manager or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and Persons serving in similar capacities who are not otherwise an
Affiliate of such Person).  For the purposes of this definition, “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities or partnership interests or otherwise.

 

“Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Exchange
Act.

 

“Change of Control” means and includes any of the following events:

 

(i)                 any Person is or becomes Beneficial Owner, directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the then outstanding securities of the
Company, excluding (A) any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (x) of subsection (ii) below
and (B) any Person who becomes such a Beneficial Owner through the issuance of
such securities with respect to purchases made directly from the Company; or

 

(ii)              the consummation of a merger or consolidation of the Company
with any other Person or the issuance of voting securities of the Company in
connection with a merger or consolidation of the Company (or any direct or
indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (x) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) seventy percent (70%) or more of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the then outstanding securities of
the Company; or

 

(iii)            the consummation of a sale or disposition by the Company of all
or substantially all of the assets of the Company; or

 

 Exhibit A-1 

 

 

(iv)             persons who, as of the Effective Date, constitute the Board
(the “Incumbent Directors”) cease for any reason, including, without limitation,
as a result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board; provided that any person becoming a
director of the Company subsequent to such date shall be considered an Incumbent
Director if such person’s election was approved by, or such person was nominated
for election by, a vote of at least a majority of the Incumbent Directors.

 

Notwithstanding the foregoing, with respect to any payment in respect of an
Award LTIP Units that is triggered or accelerated upon a Change of Control, then
to the extent that the payment is subject to Code Section 409A, then such
payment shall not occur until the earliest of (i) the Change of Control if such
Change of Control constitutes a “change in the ownership of the corporation,” a
“change in the effective control of the corporation” or a “change in the
ownership of a substantial portion of the assets of the corporation,” within the
meaning of Code Section 409A(2)(A)(v), (ii) the date such payment would
otherwise be made pursuant to the terms of the Award, and (iii) the Advisor’s
“separation of service” within the meaning of Code Section 409A.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” means the Company’s common stock, par value $0.01 per share,
either currently existing or authorized hereafter.

 

“Common Stock Price” means as of any date, the average of the Fair Market Value
of one share of Common Stock (or, as applicable, one share of common stock of a
Peer Group Company) over the fifteen (15) consecutive Trading Days ending on,
and including, such date (or, if such date is not a Trading Day, the most recent
Trading Day immediately preceding such date); provided, however, that if such
date is the date upon which a Transactional Change of Control occurs, the Common
Stock Price as of such date shall be equal to the fair value, as determined by
the Committee, of the total consideration paid or payable in the transaction
resulting in the Transactional Change of Control for one share of Common Stock.

 

“Conversion Factor” has the meaning set forth in the Partnership Agreement.

 

“Effective Date” means June 2, 2018.

 

“Entity” means any general partnership, limited partnership, corporation, joint
venture, trust, business trust, real estate investment trust, limited liability
company, limited liability partnership, cooperative or association.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 Exhibit A-2 

 

 

“Fair Market Value” means, with respect to any security, the average of the
daily market price of such security for the ten consecutive Trading Days
immediately preceding the date of such valuation.  The market price for each
such Trading Day shall be: (A) if the security is listed or admitted to trading
on NYSE or any national securities exchange, the last reported sale price,
regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, (B) if
the security is not listed or admitted to trading on NYSE or any national
securities exchange, the last reported sale price on such day or, if no sale
takes place on such day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated by the Company, or
(C) if the security is not listed or admitted to trading on NYSE or any national
securities exchange and no such last reported sale price or closing bid and
asked prices are available, the average of the reported high bid and low asked
prices on such day, as reported by a reliable quotation source designated by the
Company, or if there shall be no bid and asked prices on such day, the average
of the high bid and low asked prices, as so reported, on the most recent day
(not more than ten days prior to the date in question) for which prices have
been so reported; provided, that if there are no bid and asked prices reported
during the ten days prior to the date in question, the value of the security
shall be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.  In the event the security includes any additional rights, then the
value of such rights shall be determined by the Company acting in good faith on
the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.

 

“Initial Share Price” means $19.57, the closing price of Common Stock on the
NYSE on the Trading Day prior to the Effective Date.

 

“LTIP Units” means LTIP Units, as such term is defined in the Partnership
Agreement.

 

“OP Units” has the meaning set forth in the Partnership Agreement.

 

“Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of June 2, 2015, among the
Company, as general partner, the Advisor, as a limited partner, and any limited
partners that are admitted from time to time to the Partnership and listed on
Schedule A thereto, as amended, restated or supplemented from time to time in
accordance with its terms, including, for the avoidance of doubt, the Fifth
Amendment to Second Amended and Restated Agreement of Limited Partnership of the
Partnership, dated as of the date hereof but effective as of the Effective Date.

 

“Partnership Record Date” has the meaning set forth in the Partnership
Agreement.

 

“Partnership Units” has the meaning set forth in the Partnership Agreement.

 

“Peer Group Companies” means Government Properties Income Trust, Lexington
Realty Trust, Select Income REIT, and W. P. Carey Inc.

 

“Peer Group TSR” means the average unweighted cumulative Total Shareholder
Return of the Peer Group Companies for the Performance Period.

 

“Person” means an individual, Entity, corporation, unincorporated organization,
or other entity or “group” (as defined in the Exchange Act).

 

“Relative TSR” means the Company’s Total Shareholder Return relative to the
average unweighted cumulative Total Shareholder Return of the Peer Group
Companies.

 

 Exhibit A-3 

 

 

“Relative TSR Excess” means, an amount, expressed in terms of basis points
(bps), whether positive or negative, by which the Company’s Absolute TSR as of
the Valuation Date exceeds the Peer Group TSR as of the Valuation Date.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Subsidiary” means any corporation or other entity (other than the Company) in
which the Company has more than a fifty percent (50%) interest, either directly
or indirectly.

 

“Total Shareholder Return” means, for each of the Company and the Peer Group
Companies, with respect to the Performance Period, the total return (expressed
as a percentage) that would have been realized by a holder who (a) bought one
share of common stock of such company at the Initial Share Price (or the closing
price, with respect to any Peer Group Company) on the Effective Date, (b)
reinvested each dividend and other distribution declared during the Performance
Period with respect to such share (and any other shares, or fractions thereof,
previously received upon reinvestment of dividends or other distributions or on
account of stock dividends), without deduction for any taxes with respect to
such dividends or other distributions or any charges in connection with such
reinvestment, in additional shares of common stock at a price per share equal to
(i) the Fair Market Value on the Trading Day immediately preceding the
ex-dividend date for such dividend or other distribution less (ii) the amount of
such dividend or other distribution, and (c) sold such shares on the Valuation
Date at the Common Stock Price on the Valuation Date, without deduction for any
taxes with respect to any gain on such sale or any charges in connection with
such sale.

 

“Trading Day” means a day on which the principal national securities exchange on
which a security is listed or admitted to trading is open for the transaction of
business or, if a security is not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

 

“Transactional Change of Control” means (A) a Change of Control described in
clause (i) of the definition thereof where the Person makes a tender offer for
Common Stock, (B) a Change of Control described in clause (ii) of the definition
thereof where the Company is not the surviving entity, or (C) a Change of
Control described in clause (iii) of the definition thereof.

 

“Transferee” shall mean the transferee in any Transfers of Award LTIP Units or
Award OP Units approved by the Committee pursuant to Section 6 hereof.

 

 Exhibit A-4 

 

 

EXHIBIT B

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF
PROPERTY PURSUANT TO SECTION 83(b) OF THE INTERN REVENUE CODE

 

The undersigned Taxpayer hereby makes an election pursuant to Section 83(b) of
the Internal Revenue Code with respect to the property described below and
supplies the following information in accordance with the regulations
promulgated thereunder:

 

1.The name, address and taxpayer identification number of the undersigned are:

 

Name: Global Net Lease Advisors, LLC (the “Taxpayer”)

 

Address:

 

___________________

 

Taxpayer Identification No.: ____-____-____

 

2.Description of property with respect to which the election is being made:
2,554,930 LTIP Units in Global Net Lease Operating Partnership, L.P. (the
“Partnership”).

 

3.The date on which the LTIP Units were transferred is July 19, 2018. The
taxable year to which this election relates is calendar year 2018.

 

4.Nature of restrictions to which the LTIP Units are subject: With limited
exceptions, until the LTIP Units vest, the Taxpayer may not transfer in any
manner any portion of the LTIP Units without the consent of the Partnership. The
Taxpayer’s LTIP Units are subject to performance-based vesting conditions
related to the performance of Global Net Lease, Inc. (including the
distributions made by it to its Stockholders). Unvested LTIP Units are subject
to forfeiture if such conditions are not met.

 

5.The fair market value at time of transfer (determined without regard to any
restrictions other than restrictions which by their terms w never lapse) of the
LTIP Units with respect to which this election is being made was $0 per LTIP
Unit.

 

6.The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.

 

7.A copy of this statement has been furnished to the Partnership and Global Net
Lease, Inc.

 

 

      GLOBAL NET LEASE ADVISORS, LLC           Dated:       Signed:          
By:           Name:           Title:  

 

 Exhibit B-1