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 (Date of earliest event reported): August 14, 2018
Global Net Lease, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland | 000-37390 | 45-2771978 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
405 Park Avenue, 3rd Floor New York, New York 10022 |
(Address, including zip code, of Principal Executive Offices)
Registrant’s telephone number, including area code: (212) 415-6500 |
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 ¨
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 1.01. | Entry into a Material Definitive Agreement. |
Advisory Agreement Amendment
On August 14, 2018, Global Net Lease, Inc. (the “Company”), upon the recommendation of its conflicts committee and following approval by its independent directors, entered into an amendment (the “Amendment”) to its advisory agreement (the “Advisory Agreement”) with the Company’s external advisor, Global Net Lease Advisors, LLC (the “Advisor”). The Amendment revises the provisions regarding the effective annual thresholds of Core AFFO Per Share (as defined in the Advisory Agreement) the Company must satisfy for the Advisor to be paid Incentive Compensation (as defined in the Advisory Agreement) such that the Incentive Fee Lower Hurdle (as defined in the Advisory Agreement) will be decreased from $2.37 to (a) $2.15 for the 12 months ending June 30, 2019, and (b) $2.25 for the 12 months ending June 30, 2020, and the Incentive Fee Upper Hurdle (as defined in the Advisory Agreement) was decreased from $3.08 to (a) $2.79 for the 12 months ending June 30, 2019, and (b) $2.92 for the 12 months ending June 30, 2020. In addition, the Advisory Agreement was amended to revise the provisions governing adjustments to these annual thresholds. Pursuant to the Amendment, the annual thresholds may, beginning with effect from July 1, 2020, be increased each year in the sole discretion of a majority of the Company’s independent directors (in their good faith reasonable judgment, after consultation with the Advisor), by a percentage equal to between 0% and 3% instead of 1% and 3%. In addition in August 2023 and every five years thereafter, the Advisor will have a right to request that the Company’s independent directors reduce the then current Incentive Fee Lower Hurdle and Incentive Fee Upper Hurdle and make a determination whether any reduction in the annual thresholds is warranted.
The foregoing summary of the material terms of the Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
2 |
SIGNATURES
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.
Global Net Lease, Inc. | |||
Date: August 14, 2018 | By: | /s/ James L. Nelson | |
Name: | James L. Nelson | ||
Title: | Chief Executive Officer and President |
3 |
Exhibit 10.1
FIRST AMENDMENT TO
FOURTH AMENDED AND RESTATED ADVISORY AGREEMENT
This FIRST AMENDMENT TO THE FOURTH AMENDED AND RESTATED ADVISORY AGREEMENT (this “ Amendment ”) is entered into and shall become effective as of August 14, 2018, by and among Global Net Lease, Inc., a Maryland corporation (the “ Company ”), Global Net Lease Operating Partnership, L.P., a Delaware limited partnership (the “ Operating Partnership ”) and Global Net Lease Advisors, LLC, a Delaware limited liability company (the “ Advisor ”).
RECITALS
WHEREAS , the Company, the Operating Partnership and the Advisor previously entered into that certain Fourth Amended and Restated Advisory Agreement, dated as of June 2, 2015 (the “ Advisory Agreement ”);
WHEREAS , the Company, the Operating Partnership and the Advisor desire to make certain amendments to the Advisory Agreement.
AGREEMENT
NOW , THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. | Amendment to the definition of “Incentive Fee Escalator” . The definition of “Incentive Fee Escalator” contained in Section 1 of the Advisory Agreement is deleted and replaced in its entirety with the following: |
““ Incentive Fee Escalator ” means, (i) beginning on the first (1 st ) anniversary of the Effective Date, an amount equal to not less than one percent (1%) and not greater than three percent (3%) and (ii) beginning on June 2, 2020, an amount equal to not less than zero percent (0%) and not greater than three percent (3%), in each case, with the exact amount determined in accordance with Section 6(e)(iii).”
2. | Amendment to the definition of “Incentive Fee Lower Hurdle” . The definition of “Incentive Fee Lower Hurdle” contained in Section 1 of the Advisory Agreement is hereby amended such that the following sentence shall be added at the end thereof: |
“Effective as of July 1, 2018, notwithstanding anything in the foregoing to the contrary, the Incentive Fee Lower Hurdle means the Core AFFO Per Share in an annualized amount equal to (i) $2.15 for the period beginning on July 1, 2018 through June 30, 2019, (ii) $2.25 for the period beginning on July 1, 2019 through June 30, 2020, and (iii) thereafter as the same may be increased each year by the product of the applicable Core FFO multiplied by the Incentive Fee Escalator for such year.”
3. | Amendment to the definition of “Incentive Fee Upper Hurdle” . The definition of “Incentive Fee Upper Hurdle” contained in Section 1 of the Advisory Agreement is hereby amended such that the following sentence shall be added at the end thereof: |
“Effective as of July 1, 2018, notwithstanding anything in the foregoing to the contrary, the Core AFFO Per Share in an annualized amount equal to (i) $2.79 for the period beginning on July 1, 2018 through June 30, 2019, (ii) $2.92 for the period beginning on July 1, 2019 through June 30, 2020, and (iii) thereafter as the same may be increased each year by product of the applicable Core FFO multiplied by the Incentive Fee Escalator for such year.”
4. | Amendment to Section 6(e)(iii) . Section 6(e)(iii) of the Advisory Agreement is hereby amended such that the following sentence shall be added at the end thereof: |
“For the avoidance of doubt, the Incentive Fee Hurdles shall not be increased by the Incentive Fee Escalator until the start of the fiscal quarter of the Company beginning July 1, 2020.”
5. | Addition of new Section 6(e)(vii) . A new Section 6(e)(vii) of the Advisory Agreement is hereby added following Section 6(e)(vi) of the Advisory Agreement as follows: |
“Notwithstanding anything contained herein to the contrary, on August 14, 2023 and on each five (5) year anniversary thereafter, the Board shall (A) consider any request by the Advisor (which request may be made solely by the Advisor in its discretion) to reduce the then current Incentive Fee Hurdles and (B) make a determination (based on all relevant facts and circumstances, including the best interests of the Company’s stockholders, the achievability of such Incentive Fee Hurdles, and any changes to the Investment Guidelines or the business plan of the Company) as to the amount by which such Incentive Fee Hurdles may be reduced.”
6. | Effect of the Advisory Agreement . Except as modified by this Amendment, all of the terms of the Advisory Agreement are hereby ratified and confirmed and shall remain in full force and effect. This Amendment shall be construed as one with the Advisory Agreement, and the Advisory Agreement shall, where context requires, be read and construed so as to incorporate this Amendment. |
7. | General Provisions . Except as modified herein, the terms and provisions of Section 18 of the Advisory Agreement are hereby incorporated by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Amendment. |
[Signature Page Follows]
IN WITNESS WHEREOF , the undersigned, intending to be legally bound hereby, have duly executed and delivered this First Amendment to Fourth Amended and Restated Advisory Agreement as of the date first set forth above.
GLOBAL NET LEASE, INC. | ||
By: | /s/ James L. Nelson | |
Name: James L. Nelson | ||
Title: CEO | ||
GLOBAL NET LEASE OPERATING PARTNERSHIP, L.P. | ||
By: Global Net Lease, Inc., its General Partner | ||
By: | /s/ James L. Nelson | |
Name: James L. Nelson | ||
Title: CEO | ||
GLOBAL NET LEASE ADVISORS, LLC | ||
By: | /s/ Michael R. Anderson | |
Name: Michael R. Anderson | ||
Title: Authorized Signatory |
[ Signature Page to the First Amendment to the
Fourth Amended and Restated Advisory Agreement ]