PKST DEF 14A Report ended June 15, 2020

(1)	Title of each class of securities to which transaction applies:________________________

(2)	Aggregate number of securities to which transaction applies:________________________

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):_______________________________________________________________

(4)	Proposed maximum aggregate value of transaction:_______________________________

(5)	Total fee paid:_____________________________________________________________

[ ]	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form of Schedule and the date of its filing.

(1)	Amount previously paid:__________________________________________

(2)	Form, Schedule or Registration Statement No.:_________________________________

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(4)	Date filed:_______________________________________________________________

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1.	To elect seven directors, each to serve until the 2021 annual meeting of stockholders and until their successors are duly elected and qualify.

2.	To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020.

3.	To approve the Griffin Capital Essential Asset REIT, Inc. Amended and Restated Employee and Director Long-Term Incentive Plan.

4.	To approve, on an advisory (non-binding) basis, the compensation paid to the Company’s Named Executive Officers (“say on pay” vote).

5.	To approve, on an advisory (non-binding) basis, the frequency of future stockholder say on pay votes.

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Q:	When and where will the annual meeting be held?

A:	Our 2020 annual meeting of stockholders will be held on June 15, 2020 at 10:00 A.M. (PT). The meeting will be held at the Company’s offices at 1520 E. Grand Avenue, El Segundo, California 90245.

Q:	Could emerging developments regarding the coronavirus (COVID-19) affect our ability to hold an in-person annual meeting?

A:

We are closely monitoring the developments regarding the coronavirus (COVID-19). Although we currently intend to hold our annual meeting in person at our offices, we are sensitive to the public health and travel concerns stockholders may have and the requirements that federal, state, and local governments may impose. In the event we determine that we need to conduct our annual meeting solely by means of remote communication, we will announce the change and provide instructions on how stockholders can participate in the annual meeting via press release and by filing additional soliciting materials with the Securities and Exchange Commission. The press release will also be available on our website at www.gcear.com . If you currently plan to attend the annual meeting in person, please check our website two weeks prior to the annual meeting.

Q:	What is the purpose of the meeting?

A:	At the meeting, you will be asked to:

•	elect seven directors, each to serve until the 2021 annual meeting of stockholders and until their successors are duly elected and qualify;

•	ratify the appointment of Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for the year ending December 31, 2020;

•	approve the Griffin Capital Essential Asset REIT, Inc. Amended and Restated Employee and Director Long-Term Incentive Plan (the “Amended and Restated Plan”);

•	approve, on an advisory (non-binding) basis, the compensation paid to the Company’s Named Executive Officers (“say on pay” vote);

•	approve, on an advisory (non-binding) basis, the frequency of future stockholder say on pay votes; and

•	conduct such other business as may properly come before the annual meeting or any adjournment thereof.

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Q:	Who can vote at the meeting?

A:	Stockholders of record on April 1, 2020, or the record date, are entitled to receive notice of the annual meeting and to vote the shares of common stock, including shares of Class A, Class AA, Class AAA, Class T, Class D, Class S, Class I and Class E common stock that they hold on that date. As of the record date, we had 229,635,183 shares of common stock issued, outstanding and eligible to vote.

Q:	How many votes do I have?

A:	Each outstanding share of Class A, Class AA, Class AAA, Class T, Class D, Class S, Class I and Class E common stock entitles its holder to cast one vote with respect to each matter to be voted upon at the annual meeting.

Q:	How can I vote?

A:	You may vote in person at the meeting or by proxy. Stockholders have the following three options for submitting their votes by proxy:

•	via mail, by completing, signing, dating and returning your proxy card in the enclosed envelope;

•	via the Internet at www.proxyvote.com ; or

•	via telephone at (800) 690-6903, you will be prompted to enter a control number that can be found on the proxy card.

Q:	How will my proxies be voted?

A:

Shares represented by valid proxies will be voted in accordance with the directions given on the relevant proxy card. If a proxy card is signed and returned without any directions given, the individuals named on the card as proxy holders will vote in accordance with the recommendations of our Board of Directors as to (1) the election of directors, (2) the ratification of the appointment of Ernst & Young as our independent registered public accounting firm for the year ending December 31, 2020, (3) the approval of the Amended and Restated Plan, (4) the advisory (non-binding) vote on the compensation paid to our Named Executive Officers (“say on pay”), and (5) the advisory (non-binding) vote on the frequency of future stockholder say on pay votes. If other matters requiring the vote of our stockholders come before the meeting, it is the intention of the persons named in the proxy card to vote the proxies held by them in accordance with their best judgment in such matters.

Q:	What are the Board of Directors' voting recommendations?

A:	Our Board of Directors recommends that you vote:

•	“FOR ALL” of the nominees to our Board of Directors;

•	“FOR” the ratification of Ernst & Young as our independent registered public accounting firm for the year ending December 31, 2020;

•	“FOR” the approval of the Amended and Restated Plan;

•	“FOR” the advisory (non-binding) proposal regarding the compensation paid to our Named Executive Officers (“say on pay”); and

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•	“1 YEAR” in connection with the proposal regarding an advisory (non-binding) vote on the frequency of future stockholder say on pay votes.

Q:	How can I change my vote or revoke my proxy?

A:

You have the unconditional right to revoke your proxy at any time prior to the voting thereof by submitting a later-dated proxy (via mail, the Internet or telephone), by attending the annual meeting and voting in person or by written notice addressed to: Griffin Capital Essential Asset REIT, Inc., Attention: Secretary, 1520 E. Grand Avenue, El Segundo, California 90245. To be effective, a proxy revocation must be received by us at or prior to the annual meeting.

Q:	What vote is required to approve each proposal?

A:

Election of Directors. The election of each of the nominees for director requires the affirmative vote of stockholders holding a majority of shares entitled to vote who are present in person or by proxy at the annual meeting, if a quorum is present. There is no cumulative voting in the election of our directors. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Q:	What constitutes a "quorum"?

A:	The presence at the annual meeting, in person or represented by proxy, of stockholders entitled to cast fifty percent (50%) of all the votes entitled to be cast at the meeting constitutes a quorum. Abstentions and broker non-votes will be counted as present for the purpose of establishing a quorum; however, abstentions and broker non-votes will not be counted as votes cast.

Q:	Who will bear the costs of soliciting votes for the meeting?

A:

We will bear the entire cost of the solicitation of proxies from our stockholders.  We have retained Broadridge Financial Solutions, Inc. to assist us in connection with the solicitation of proxies for the annual meeting. Broadridge Financial Solutions, Inc. will be paid fees of approximately $300,000 plus out-of-pocket expenses, for its basic solicitation services, which include printing and review of proxy materials and our annual report, dissemination of broker search cards, distribution of proxy materials, solicitation of brokers, banks, and institutional holders, and delivery of executed proxies.  In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by

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Q:	What if I receive only one set of proxy materials although there are multiple stockholders at my address?

A:

The SEC has adopted a rule concerning the delivery of documents filed by us with the SEC, including proxy statements and annual reports to stockholders, which allows us to send a single set of any annual report and/or proxy statement to any household at which two or more stockholders reside if they share the same last name or we reasonably believe they are members of the same family. This procedure is referred to as “householding.” This rule benefits both you and us. It reduces the volume of duplicate information received at your household and helps us reduce expenses. Each stockholder subject to householding will continue to receive a separate proxy card or voting instruction card.

Q:	How do I submit a stockholder proposal for next year's annual meeting or proxy materials, and what is the deadline for submitting a proposal?

A:

In order for a stockholder proposal to be properly submitted for presentation at our annual meeting next year, we must receive written notice of the proposal at our executive offices during the period beginning on December 16, 2020 and ending January 15, 2021. If you wish to present a proposal for inclusion in the proxy materials for next year’s annual meeting, we must receive written notice of your proposal at our executive offices no later than December 16, 2020. All proposals must contain the information specified in, and otherwise comply with, our bylaws. Proposals should be sent via registered, certified or express mail to: Griffin Capital Essential Asset REIT, Inc., Attention: Secretary, 1520 E. Grand Avenue, El Segundo, California 90245 or call us at (310) 469-6100. For additional information, see the “Stockholder Proposals” section in this proxy statement.

Q:	Who can help answer my questions?

A:	If you have any questions about the annual meeting, any of the proposals, how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor, Broadridge Financial Solutions, Inc. at: (855) 976-3332. Representatives are available Monday through Friday 9:00 a.m. to 10:00 p.m. (Eastern).

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•	Kevin A. Shields

•	Michael J. Escalante

•	Kathleen S. Briscoe

•	Gregory M. Cazel

•	Ranjit M. Kripalani

•	J. Grayson Sanders

•	Samuel Tang

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•	the continuation, renewal or enforcement of agreements with our affiliates, including the following significant agreements:

•	the administrative services agreement (the “Administrative Services Agreement”) that we assumed, in connection with the Mergers, as the successor of EA-1 and the EA-1 Operating Partnership;

•	the dealer manager agreement (as amended, the “Dealer Manager Agreement”) with our dealer manager, Griffin Capital Securities, LLC;

•	property sales or acquisitions; and

•	other transactions with affiliates.

•	assisting our Board of Directors in fulfilling its oversight responsibilities with respect to acquisitions, dispositions, development projects, financings and other similar investments by us;

•	assisting our executive officers and management in evaluating and formulating proposed investments; and

•	reviewing and assessing proposed investments in light of our strategic goals and objectives.

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(1)	The address of each beneficial owner listed is 1520 E. Grand Avenue, El Segundo, California 90245.

(2)

Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities and shares issuable pursuant to options, warrants and similar rights held by the respective person or group that may be exercised within 60 days following March 31, 2020. Except as otherwise indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

(3)	Consists of shares owned by Griffin Capital Vertical Partners, L.P., which is indirectly owned by Mr. Shields.

(4)	Includes 176,432 time-based Restricted Stock Units (“RSUs”) that vested on December 31, 2019 (after withholding of shares to satisfy tax withholding obligations). The shares of Class E Common Stock underlying the RSUs were not delivered upon vesting, but instead were deferred for delivery on May 1, 2023, or, if sooner, upon Mr. Escalante’s termination of employment.

(5)	Includes 25,206 time-based RSUs that vested on December 31, 2019 (after withholding of shares to satisfy tax withholding obligations). The shares of Class E Common Stock underlying the RSUs were not delivered upon vesting, but instead were deferred for delivery on May 1, 2023, or, if sooner, upon Mr. Bitar’s termination of employment.

(6)	Includes 16,383 time-based RSUs that vested on December 31, 2019 (after withholding of shares to satisfy tax withholding obligations). The shares of Class E Common Stock underlying the RSUs were not delivered upon vesting, but instead were deferred for delivery on May 1, 2023, or, if sooner, upon Mr. Hirsch’s termination of employment.

(7)	Includes 12,602 time-based RSUs that vested on December 31, 2019 (after withholding of shares to satisfy tax withholding obligations). The shares of Class E Common Stock underlying the RSUs were not delivered upon vesting, but instead were

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(8)	Includes 12,602 time-based RSUs that vested on December 31, 2019 (after withholding of shares to satisfy tax withholding obligations). The shares of Class E Common Stock underlying the RSUs were not delivered upon vesting, but instead were deferred for delivery on May 1, 2023, or, if sooner, upon Mr. Tausk’s termination of employment.

(9)	Each independent director was awarded 5,000 shares of restricted stock on January 18, 2017, which are fully vested, 7,000 shares of restricted stock on June 14, 2017, which are fully vested, and 7,000 shares of restricted stock on March 14, 2019, which are fully vested.

(10)

Gregory M. Cazel and Ranjit M. Kripalani were previously independent directors of EA-1 and became our independent directors in connection with the Mergers. The 23,571 shares of common stock of EA-1 owned by Mr. Cazel were converted into 24,704 shares of Class E common stock of the Company in connection with the Mergers. The 15,500 shares of common stock of EA-1 owned by Mr. Kripalani were converted into 16,245 shares of Class E common stock of the Company in connection with the Mergers. On April 30, 2019, the Company issued 4,018 shares of restricted stock to Mr. Cazel and 3,668 shares of restricted stock to Mr. Kripalani, in each case in exchange for their shares of restricted stock in EA-1 that remained unvested as of the effective time of the Company Merger, pursuant to the terms of the merger agreement.

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•

Audit Fees - These are fees for professional services performed for the audit of our annual financial statements and the required review of our quarterly financial statements and other procedures performed by the independent auditors to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent auditors in connection with statutory and regulatory filings or engagements, and services that generally only an independent auditor reasonably can provide, such as services associated with filing registration statements, periodic reports and other filings with the SEC.

•	Audit-Related Fees - These are fees for assurance and related services that traditionally are performed by an independent auditor, such as due diligence related to acquisitions and dispositions, audits related to acquisitions, attestation services that are not required by statute or regulation, internal control reviews and consultation concerning financial accounting and reporting standards.

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Tax Fees - These are fees for all professional services performed by professional staff in our independent auditor's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Such services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.

•	All Other Fees - These are fees for other permissible services that do not meet one of the above-described categories, including assistance with internal audit plans and risk assessments.

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•	Administered by an Independent Committee. The Amended and Restated Plan is administered by the Compensation Committee, which is composed entirely of independent directors who meet the SEC and NYSE standards for independence.

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Double-Trigger Vesting on Change in Control. Awards granted under the Amended and Restated Plan, other than awards issued to our executive officers pursuant to the terms of their respective employment agreements, will not automatically vest and pay out solely as a result of a change in control of our company if such awards are assumed by the successor in connection with such change in control. Such vesting and pay out of awards granted under the Amended and Restated Plan will only occur if a qualifying termination occurs within one year following a change in control.

•	Strict Share Recycling Provisions. The Amended and Restated Plan prohibits the reuse of shares that are withheld or delivered to satisfy the exercise price of a stock option or to satisfy tax withholding requirements.

•	Performance Awards. The Amended and Restated Plan allows the Compensation Committee to grant performance-based awards.

•	No Discounted Stock Options or Stock Appreciation Rights. All stock option and stock appreciation rights awarded under the Amended and Restated Plan must have an exercise or base price that is not less than the fair market value of the underlying common stock on the date of grant.

•	No Repricing of Stock Options or Stock Appreciation Rights. The Amended and Restated Plan prohibits any repricing of stock options or stock appreciation rights for shares or cash without stockholder approval.

•	No Tax Gross Ups. The Amended and Restated Plan does not include any tax gross up provisions.

•	No Reloads. The Amended and Restated Plan does not permit the grant of stock option reloads.

•	Annual Limit on Director Compensation . The Amended and Restated Plan limits total annual non-employee director pay (including the value of equity awards granted under the Amended and Restated Plan and any cash fees paid to such director) to $400,000 per director.

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•	Requires Shareholder Approval of any Material Amendments. Including any amendments resulting in repricing stock options or otherwise increasing the benefits accruing to participants; increasing the number of shares of our common stock issuable under the Amended and Restated Plan; and/or modifying the requirements for eligibility.

•	provide incentives to individuals chosen to receive share-based awards because of their ability to improve operations and increase profits;

•	encourage selected persons to accept or continue employment or other service relationship with the Company or an affiliate of the Company; and

•	increase the interest of our directors in the Company’s welfare through their participation in the growth in value of the Company’s stock.

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•	all of our full-time employees;

•	our non-employee directors;

•	executive officers and full-time employees of any of our affiliates; and

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persons designated by the Compensation Committee as eligible for an award (other than incentive stock options) because the person (i) performs bona fide consulting or advisory services for the Company or any affiliate of the Company pursuant to a written agreement (other than services in connection with the offer or sale of securities in a capital-raising transaction), and (ii) has a direct and significant effect on the financial development of the Company or any affiliate of the Company.

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•	earnings before any one or more of the following: interest, taxes, depreciation or amortization,

•	net income (loss) (either before or after interest, taxes, depreciation and/or amortization),

•	changes in the market price of the Company’s common stock (on a per share or aggregate basis),

•	economic value added,

•	funds from operations or similar measure,

•	sales or revenue,

•	acquisitions or strategic transactions,

•	operating income (loss),

•	cash flow (including, but not limited to, operating cash flow and free cash flow),

•	return on capital, assets, equity, or investment,

•	stockholder returns (including total returns calculated to include aggregate stock appreciation and total dividends paid, assuming full reinvestment of dividends, during the applicable period),

•	cash available,

•	return on sales,

•	gross or net profit levels,

•	productivity,

•	expense levels or management,

•	margins,

•	operating efficiency,

•	customer/tenant satisfaction,

•	working capital,

•	earnings (loss) per share of common stock,

•	revenue or earnings growth,

•	number of securities sold,

•	the Company’s ranking against selected peer groups,

•	“same-store” performance from period to period,

•	leasing or occupancy rates,

•	number of properties under management,

•	objectively determinable capital deployment,

•	objectively determined expense management,

•	performance against budget,

•	reduction of debt or borrowing costs,

•	early extinguishment of debt,

•	disposition of properties or other assets or entities,

•	sales or market shares,

•	number of customers,

•	productivity of employees as measured by revenues, cost, or earnings per employee,

•	establishment of a trading market for the Company’s common stock,

•	geographic footprint,

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•	various “non-GAAP” financial and operational measures customarily used in evaluating the performance of REITs,

•	other performance goals established by the Committee from time to time, and

•	any combination of the foregoing.

•	resulting in repricing stock options or SARs or otherwise increasing the benefits accruing to participants or to our non-employee directors;

•	increasing the number of shares of our common stock issuable under the Amended and Restated Plan; or

•	modifying the requirements for eligibility; or

•	adversely affecting any award previously granted under the Amended and Restated Plan, without the written consent of the affected participant.

•	permit awards to be exempt from liability under Section 16(b) of the Exchange Act;

•	comply with the listing or other requirements of an automated quotation system or stock exchange; or

•	satisfy any other tax, securities or other applicable laws, policies or regulations.

•	reduce or diminish the value of the award without the participant’s consent;

•	extend the original term of an option or SAR without stockholder approval; or

•	reduce the exercise price of an option or SAR, or cancel an option or SAR in exchange for cash or other awards or stock options or SARs with an exercise price that is less than the exercise price of the cancelled options or SARs, without prior stockholder approval.

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•	all stock options and SARs will fully vest;

•	all restrictions applicable to any unvested awards will lapse and the awards subject to those restrictions will fully vest; and

•	unless otherwise determined by the Board of Directors or the Compensation Committee in its sole discretion prior to the change in control, the value of all vested awards will be cashed out at the “change in control price” as defined in the Amended and Restated Plan.

•	any person or group acquires shares of our common stock that, together with the shares of common stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the common stock of the Company;

•	any person or group acquires ownership of the Company’s common stock possessing 30% or more of the total voting power of our common stock;

•	a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or

•	any person or group acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s).

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•	Aligns executive compensation to business objectives and overall Company performance;

•	Attracts, retains, and motivates highly-qualified executives;

•	Balances the focus on short- vs. longer-term performance objectives through an appropriate mix of short-term cash incentive awards and equity incentive awards that vest over a number of years; and

•	Has features designed to further align executive compensation with stockholder interests and mitigate risks, including: (i) no minimum guaranteed base salary increases and (ii) no significant perquisites.

•	we believe that this frequency is appropriate because it will enable our stockholders to vote, on an advisory (non-binding) basis, on the most recent executive compensation information as presented in our proxy statement each year, leading to a more meaningful communication between the Company and our stockholders regarding the compensation of our NEOs; and

•	an annual advisory (non-binding) vote on compensation of our NEOs is consistent with our policy of seeking input from our stockholders on corporate governance matters and our compensation philosophy, policies, and practices for our NEOs.

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•	Michael J. Escalante -Chief Executive Officer and President;

•	Javier F. Bitar - Chief Financial Officer and Treasurer;

•	Howard S. Hirsch - Chief Legal Officer and Secretary;

•	Louis K. Sohn - Managing Director, Acquisitions and Corporate Finance; and

•	Scott A. Tausk - Managing Director, Asset Management.

•	Total revenue was $387.1 million for the year ended December 31, 2019 compared to $336.4 million for the year ended December 31, 2018, predominantly as a result of the Mergers;

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•	Net income attributable to common stockholders was $24.8 million, or $0.11 per basic and diluted share for the year ended December 31, 2019, compared to net income attributable to common stockholders of $17.6 million, or $0.10 per basic and diluted share, for the year ended December 31, 2018;

•	Adjusted funds from operations, or AFFO**, was approximately $153.5 million for the year ended December 31, 2019, compared to approximately $138.6 million for the same period in 2018. Funds from operations, or FFO**, was approximately $175.4 million and $139.2 million for the years ended December 31, 2019 and 2018, respectively; and

•	Our Adjusted EBITDA**, as defined per our credit facility agreement, was approximately $270.3 million for the year ended December 31, 2019 with a fixed charge and interest coverage ratio of 3.1x and 3.7x, respectively.

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•	Attract, retain and motivate highly-skilled executives;

•	Encourage management to balance short-term goals against longer-term objectives without incentivizing excessive risk-taking;

•	Achieve an appropriate balance between risk and reward that does not incentivize excessive risk taking; and

•	Align the interests of management and shareholders through the use of equity-based compensation.

•	Invest in office and/or industrial properties;

•	Invest in triple-net lease properties; and

•	Companies approximately no less than 0.5x and no more than 2.0x the size of the Company in terms of total enterprise value.

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•	Successfully completed the merger with EA-1, including the solicitation of proxies for approval of the merger by stockholders and the registration of the Company’s common stock issued to EA-1’s stockholders in the merger on Form S-4;

•	Successfully completed the Self-Administration Transaction and fully integrated the internalized management team;

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•	Combined valuation and Net Asset Value (“NAV”) process to begin daily valuations with the combined portfolio of the Company and EA-1;

•	Improved liquidity by re-casting the term and revolver facility, added a five-year and seven-year term to the facility and added five new banks to the facility;

•	Completed the disposition of four properties totaling $206.6 million (including one JV interest) and acquired one property for $37.7 million;

•	Strong leasing and renewal activity with 783,000 square feet of renewals and 628,000 square feet of new leases commenced during the first nine months of 2019. Additionally, as of September 30, 2019 the Company had 1.51 million square feet of new/renewal leases which have been signed but had not yet commenced;

•	Extensive construction activity for re-leasing and repositioning of properties including the $5 million repositioning renovation at The Innovation Campus at Lakehurst;

•	Released 500 Rivertech property to three separate tenants at a 13.5% improvement over projections by square footage with an increase of approximately $0.17 per square foot higher than original projections;

•	Successfully completed a self-tender offer and re-launched our follow-on offering in the second quarter of 2019; and

•	Fully integrated operational functions in connection with the Self-Administration Transaction and improved efficiency in reporting.

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•	Cap on awards;

•	Balance of short-term and long-term incentives through annual cash bonuses and long-term equity compensation;

•	Substantial portion of total compensation is in the form of long-term equity awards;

•	Four-year vesting based on continued service as of the vesting date;

•	Deferred delivery on vested 2019 equity award; and

•	Pre-clearance requirement for any hedging or pledging transactions.

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•	none of our executive officers was a director of another entity where one of that entity’s executive officers served on our Compensation Committee;

•	no member of the Compensation Committee was during the year or formerly an officer or employee of the Company or any of its subsidiaries;

•	no member of the Compensation Committee entered into any transaction with our Company in which the amount involved exceeded $120,000;

•	none of our executive officers served on the compensation committee of any entity where one of that entity’s executive officers served on our Compensation Committee; and

•	none of our executive officers served on the compensation committee of another entity where one of that entity’s executive officers served as a director on our Board of Directors.

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(1)

The values for stock in this column reflect the aggregate grant date fair value of restricted stock unit awards granted on May 1, 2019, pursuant to our Employee and Director Long-Term Incentive Plan, based on NAV per share on May 1, 2019 of $9.56. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award based on the probable outcome of the award conditions. Additional information regarding these awards appears under the heading “Elements of Compensation - Long-Term Incentive Program (Equity-Based Compensation)” in the Compensation Discussion and Analysis.

(2)	Reflects the cash bonus earned by our named executive officers based on a qualitative review of individual performance by the Compensation Committee.

(3)	Includes employer contributions to the Executive Deferred Compensation Plan; the 401(k) safe harbor contributions; and the value of the cash and stock distributions issued to the Named Executive Officers in 2019 on the RSUs granted on May 1, 2019.

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(1)

The RSUs vest in equal installments on each of December 31, 2020, 2021 and 2022, provided that the NEO remains continuously employed by us on each such date, subject to certain accelerated vesting provisions as provided in the Restricted Stock Unit Award Agreements for the RSUs. The shares of Class E Common Stock underlying the RSUs will not be delivered upon vesting, but instead will be deferred for delivery on May 1, 2023, or, if sooner, upon the NEO’s termination of employment, pursuant to a deferral made by each of the NEOs.

(2)	Market value is based on NAV per share on December 31, 2019 of $9.34.

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(1)	Contributions from 2019 salary and/or bonus. All of these amounts are also included as compensation in the Summary Compensation Table for the respective NEOs.

(2)	Investment earnings (losses) for 2019.

(3)	Represents the aggregate balance of the NEOs’ accounts under the Executive Deferred Compensation Plan as of December 31, 2019, including the balances transferred to such plan from the Griffin Capital Company, LLC deferred compensation plan, and includes the vested and unvested amounts under the combined plan for each NEO.

(4)	Represents the earnings in 2019 on the aggregate amounts under the combined plan, including $104,767 of earnings on amounts contributed pursuant to the Griffin Capital Company, LLC deferred compensation plan and no earnings on amounts contributed pursuant to our Executive Deferred Compensation Plan.

(5)	Represents the aggregate balance as of December 31, 2019 and includes $1,925,099 under the Griffin Capital Company, LLC deferred compensation plan that was transferred to our Executive Deferred Compensation Plan in connection with the Self Administration Transaction, and $590,000 of contributions and earnings in 2019 pursuant to our Executive Deferred Compensation Plan.

(6)

Represents the value of the common stock underlying the restricted stock units that vested on December 31, 2019, which Mr. Escalante agreed to defer delivery until May 1, 2023, or, if sooner, upon his termination of employment, less the shares used to satisfy employment tax obligations upon the vesting of the RSUs, based on NAV as of December 31, 2019 of $9.34 per share. Mr. Escalante deferred all 183,055 shares that vested on December 31, 2019, less 6,623 shares used to satisfy employment tax obligations due in connection with the vesting of the RSUs, resulting in 176,432 shares actually deferred.

(7)	Represents the earnings in 2019 on the aggregate amounts under the combined plan, including $28,836 of earnings on amounts contributed pursuant to the Griffin Capital Company, LLC deferred compensation plan and $2,855 of earnings on amounts contributed pursuant to our Executive Deferred Compensation Plan.

(8)	Represents the aggregate balance as of December 31, 2019 and includes $161,770 under the Griffin Capital Company, LLC deferred compensation plan that was transferred to our Executive Deferred Compensation Plan in connection with the Self Administration Transaction, and $181,730 of contributions and earnings in 2019 pursuant to our Executive Deferred Compensation Plan.

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(9)

Represents the value of the common stock underlying the restricted stock units that vested on December 31, 2019, which Mr. Bitar agreed to defer delivery until May 1, 2023, or, if sooner, upon his termination of employment, less the shares used to satisfy employment tax obligations upon the vesting of the RSUs, based on NAV as of December 31, 2019 of $9.34 per share. Mr. Bitar deferred all 26,151 shares that vested on December 31, 2019, less 945 shares used to satisfy employment tax obligations due in connection with the vesting of the RSUs, resulting in 25,206 shares actually deferred.

(10)	Represents the earnings in 2019 on the aggregate amounts under the combined plan, including $403,431 of earnings on amounts contributed pursuant to the Griffin Capital Company, LLC deferred compensation plan and $2,151 of earnings on amounts contributed pursuant to our Executive Deferred Compensation Plan.

(11)	Represents the aggregate balance as of December 31, 2019 and includes $1,773,026 under the Griffin Capital Company, LLC deferred compensation plan that was transferred to our Executive Deferred Compensation Plan in connection with the Self Administration Transaction, and $132,151 of contributions and earnings in 2019 pursuant to our Executive Deferred Compensation Plan.

(12)

Represents the value of the common stock underlying the restricted stock units that vested on December 31, 2019, which Mr. Hirsch agreed to defer delivery until May 1, 2023, or, if sooner, upon his termination of employment, less the shares used to satisfy employment tax obligations upon the vesting of the RSUs, based on NAV as of December 31, 2019 of $9.34 per share. Mr. Hirsch deferred all 16,998 shares that vested on December 31, 2019, less 615 shares used to satisfy employment tax obligations due in connection with the vesting of the RSUs, resulting in 16,383 shares actually deferred.

(13)	Represents the earnings in 2019 on the aggregate amounts under the combined plan, including $106,531 of earnings on amounts contributed pursuant to the Griffin Capital Company, LLC deferred compensation plan and $1,730 of earnings on amounts contributed pursuant to our Executive Deferred Compensation Plan.

(14)	Represents the aggregate balance as of December 31, 2019 and includes $668,387 under the Griffin Capital Company, LLC deferred compensation plan that was transferred to our Executive Deferred Compensation Plan in connection with the Self Administration Transaction, and $110,480 of contributions and earnings in 2019 pursuant to our Executive Deferred Compensation Plan.

(15)

Represents the value of the common stock underlying the restricted stock units that vested on December 31, 2019, which Mr. Sohn agreed to defer delivery until May 1, 2023, or, if sooner, upon his termination of employment, less the shares used to satisfy employment tax obligations upon the vesting of the RSUs, based on NAV as of December 31, 2019 of $9.34 per share. Mr. Sohn deferred all 13,075 shares that vested on December 31, 2019, less 473 shares used to satisfy employment tax obligations due in connection with the vesting of the RSUs, resulting in 12,602 shares actually deferred.

(16)	Represents the earnings in 2019 on the aggregate amounts under the combined plan, including $294,600 of earnings on amounts contributed pursuant to the Griffin Capital Company, LLC deferred compensation plan and $3,572 of earnings on amounts contributed pursuant to our Executive Deferred Compensation Plan.

(17)	Represents the aggregate balance as of December 31, 2019 and includes $1,489,701 under the Griffin Capital Company, LLC deferred compensation plan that was transferred to our Executive Deferred Compensation Plan in connection with the Self Administration Transaction, and $108,572 of contributions and earnings in 2019 pursuant to our Executive Deferred Compensation Plan.

(18)

Represents the value of the common stock underlying the restricted stock units that vested on December 31, 2019, which Mr. Tausk agreed to defer delivery until May 1, 2023, or, if sooner, upon his termination of employment, less the shares used to satisfy employment tax obligations upon the vesting of the RSUs, based on NAV as of December 31, 2019 of $9.34 per share. Mr. Tausk deferred all 13,075 shares that vested on December 31, 2019, less 473 shares used to satisfy employment tax obligations due in connection with the vesting of the RSUs, resulting in 12,602 shares actually deferred.

•	an annual base salary of $800,000, subject to annual review for increase (but not decrease) by the Board or a committee thereof;

•

an annual cash bonus opportunity (“Incentive Bonus”) with threshold, target and maximum award opportunities of 175%, 250% and 325%, respectively, of the base salary actually paid for such year (subject to adjustment, in the sole discretion of the Compensation Committee, if the Company’s common stock becomes listed on an established stock exchange). The entitlement to and payment of an annual Incentive Bonus is subject to the approval of the Compensation Committee, except

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Death or Disability : (i) base salary earned but not paid as of the termination date, any Incentive Bonus earned by Mr. Escalante for the prior calendar year but not yet paid, reimbursement for unpaid expenses to which Mr. Escalante is entitled to reimbursement, and any accrued or vested compensation or benefits to which Mr. Escalante is entitled under any benefits plans (collectively, the “Accrued Obligations”); (ii) the Incentive Bonus for the calendar year in which the termination occurs, pro-rated for the amount of time Mr. Escalante was employed during such calendar year, assuming target performance; (iii) a lump sum payment equal to 24 months of Healthcare Benefits (as defined in the Escalante Employment Agreement); (iv) the automatic vesting of all outstanding equity awards held by Mr. Escalante as of immediately prior to his termination, assuming target performance for any performance period that has not yet ended (the “Equity Award Vesting”); and (v) the vesting in full of Mr. Escalante's account under the Company's Executive Deferred Compensation Plan.

•

Without Cause or with Good Reason : (i) the Accrued Obligations; (ii) a pro-rated Incentive Bonus for the calendar year in which such termination occurs (assuming target individual performance and actual Company performance), pro-rated for the amount of time Mr. Escalante was employed during such calendar year; (iii) a lump sum payment equal to three (3) times the sum of (A) his base salary then in effect plus (B) the average of the Incentive Bonus paid to Mr. Escalante for the prior two calendar years preceding the year in which such termination occurs or, in the event such termination date occurs prior to the end of two years after the effective date of the Escalante Employment Agreement, Mr. Escalante's target Incentive Bonus for any such years not yet elapsed (the “Average Incentive Bonus”); (iv) a lump sum payment equal to 24 months (or, if such termination occurs prior to December 31, 2020, 36 months) of Healthcare Benefits (as defined in the Escalante Employment Agreement); (v) the Equity Award Vesting; and (vi) the vesting in full of Mr. Escalante's account under the Company's Executive Deferred Compensation Plan.

•	Termination by the Company without Cause or by Mr. Escalante with Good Reason during the Term and within six months preceding or 12 months following a Change in Control of the Company : all of the benefits and payments described in the paragraph “Without Cause or with Good Reason” above, except that the Healthcare Benefits will be calculated to cover 36 months.

•	Change in Control : the automatic vesting of all outstanding equity awards held by Mr. Escalante as of immediately prior to a Change in Control, assuming target performance for any performance period that has not yet ended.

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(1)	The NEOs are only entitled to the vested amount of their respective accounts under the Executive Deferred Compensation Plan as of the retirement or termination date. Additionally, the NEOs will not receive any additional compensation upon retirement, and any accelerated vesting of their equity awards may be subject to the discretion of the Compensation Committee.

(2)

Includes healthcare benefits and vesting in full of the unvested amount of the NEO’s account under the Executive Deferred Compensation Plan pursuant to the terms of the NEOs’ respective employment agreements. The amounts reported under the “Aggregate Balance at Last FYE” column of the Nonqualified Deferred Compensation table reflect the aggregate balance of the NEOs’ accounts under the Executive Deferred Compensation Plan as of December 31, 2019, including the balances transferred to such plan from the Griffin Capital Company, LLC deferred compensation plan, and includes the vested and unvested amounts under the combined plan.

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•	The date of termination is December 31, 2019;

•	The payments are based on the terms of the NEO’s respective employment agreements and the applicable award agreements governing unvested equity awards;

•	The NEOs’ respective restricted stock unit awards were assumed, continued, converted or replaced with a substantially similar award by the Company or a successor entity or its parent or subsidiary in connection with a Change in Control;

•	There is no earned, accrued but unpaid salary;

•	There is no earned, accrued but unpaid bonus for the prior year; and

•	The premiums for the NEO’s health plan coverage, life insurance, long-term disability insurance and accidental death and dismemberment insurance is constant throughout the year.

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(1)

Kevin A. Shields, our Executive Chairman, and Michael J. Escalante, our Chief Executive Officer and President and member of our Board of Directors, are not included in the table above as they were employees of the Company during 2019 and, therefore did not receive any additional compensation for the services that they provided as directors. The compensation that Mr. Escalante received is included in the Summary Compensation Table.

(2)	The amounts shown in this column reflect the grant date fair value of restricted stock awards granted to each of our non-employee directors. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award.

(3)	Messrs. Cazel and Kripalani received the fees earned pursuant to their services as independent directors of EA-1 until April 30, 2019, the effective date of the merger with EA-1, at which time, they began receiving fees for service on our Board. The amounts reported in this table reflect the aggregate amounts paid to Messrs. Cazel and Kripalani for the full year.

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Revenues in excess of cash received, net . Most of our leases provide for periodic minimum rent payment increases throughout the term of the lease. In accordance with GAAP, these contractual periodic minimum rent payment increases during the term of a lease are recorded to rental revenue on a straight-line basis in order to reconcile the difference between accrual and cash basis accounting. As straight-line rent is a GAAP non-cash adjustment and is included in historical earnings, FFO is adjusted for the effect of straight-line rent to arrive at AFFO as a means of determining operating results of our portfolio. By adjusting for this item, we believe AFFO is reflective of the realized economic impact of our leases (including master agreements) that is useful in assessing the sustainability of our operating performance.

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Amortization of stock-based compensation. We have excluded the effect of stock-based compensation expense from our AFFO calculation. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from AFFO because it is not an expense which generally requires cash settlement, and therefore is not used by us to assess the profitability of our operations. We also believe the exclusion of stock-based compensation expense provides a more useful comparison of our operating results to the operating results of our peers.

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Deferred rent . Most of our leases provide for periodic minimum rent payment increases throughout the term of the lease. In accordance with GAAP, these periodic minimum rent payment increases during the term of a lease are recorded on a straight-line basis and create deferred rent. As deferred rent is a GAAP non-cash adjustment and is included in historical earnings, FFO is adjusted for the effect of deferred rent to arrive at AFFO as a means of determining operating results of our portfolio.

•

Amortization of in-place lease valuation . Acquired in-place leases are valued as above-market or below-market as of the date of acquisition based on the present value of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) management's estimate of fair market lease rates for the corresponding in-place leases over a period equal to the remaining non-cancelable term of the lease for above-market leases. The above-market and below-market lease values are capitalized as intangible lease assets or liabilities and are amortized as an adjustment to rental income over the remaining terms of the respective leases. As this item is a non-cash adjustment and is included in historical earnings, FFO is adjusted for the effect of the amortization of in-place lease valuation to arrive at AFFO as a means of determining operating results of our portfolio.

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Acquisition-related costs . We were organized primarily with the purpose of acquiring or investing in income-producing real property in order to generate operational income and cash flow that will allow us to provide regular cash distributions to our stockholders. In the process, we incur non-reimbursable affiliated and non-affiliated acquisition-related costs, which in accordance with GAAP, are capitalized and included as part of the relative fair value when the property acquisition meets the definition of an asset acquisition or are expensed as incurred and are included in the determination of income (loss) from operations and net income (loss), for property acquisitions accounted for as a business combination. By excluding acquisition-related costs, AFFO may not provide an accurate indicator of our operating performance during periods in which acquisitions are made. However, it can provide an indication of our on-going ability to generate cash flow from operations and continue as a going concern after we cease to acquire properties on a frequent and regular basis, which can be compared to AFFO of other non-listed REITs that have completed their acquisition activity and have similar operating characteristics to ours. Management believes that excluding these costs from AFFO provides investors with supplemental performance information that is consistent with the performance models and analyses used by management.

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Financed termination fee, net of payments received . We believe that a fee received from a tenant for terminating a lease is appropriately included as a component of rental revenue and therefore included in AFFO. If, however, the termination fee is to be paid over time, we believe the recognition of such termination fee into income should not be included in AFFO. Alternatively, we believe that the periodic amount paid by the tenant in subsequent periods to satisfy the termination fee obligation should be included in AFFO.

•

Gain or loss from the extinguishment of debt . We primarily use debt as a partial source of capital to acquire properties in our portfolio and fund redemptions. As a term of obtaining this debt, we will pay financing costs to the respective lender. Financing costs are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and amortized into interest expense on a straight-line basis over the term of the debt. We consider the amortization expense to be a component of operations if the debt was used to acquire properties. From time to time, we may cancel certain debt obligations and replace these canceled debt obligations with new debt at more favorable terms to us. In doing so, we are required to write-off the remaining capitalized financing costs associated with the canceled debt, which we consider to be a cost, or loss, on extinguishing such debt. Management believes that this loss is considered an event not associated with our operations, and therefore, deems this write-off to be an exclusion from AFFO.

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Unrealized gains (losses) on derivative instruments . These adjustments include unrealized gains (losses) from mark-to-market adjustments on interest rate swaps and losses due to hedge ineffectiveness. The change in the fair value of interest rate swaps not designated as a hedge and the change in the fair value of the ineffective portion of interest rate swaps are non-cash adjustments recognized directly in earnings and are included in interest expense. We have excluded these adjustments in our calculation of AFFO to more appropriately reflect the economic impact of our interest rate swap agreements.

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Dead deal costs . As part of investing in income-producing real property, we incur non-reimbursable affiliated and non-affiliated acquisition-related costs for transactions that fail to close, which in accordance with GAAP, are expensed and are included in the determination of income (loss) from operations and net income (loss). Similar to acquisition-related costs (see above), management believes that excluding these costs from AFFO provides investors with supplemental performance information that is consistent with the performance models and analyses used by management.

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(1)

Adjusted EBITDA, as defined in our credit facility agreement, is calculated as net income before interest, taxes, depreciation and amortization (EBITDA), plus acquisition fees and expenses, asset and property management fees, straight-line rents and in-place lease amortization for the period, further adjusted for acquisitions that have closed during the quarter and certain reserves for capital expenditures.

(2)	Adjustment is a result of combined financial information from EA-1 and us.

(3)	Interest coverage is the ratio of interest expense as if the corresponding debt was in place at the beginning of the period to adjusted EBITDA.

(4)	Fixed charge coverage is the ratio of principal amortization for the period plus interest expense as if the corresponding debt was in place at the beginning of the period plus preferred unit distributions as if in place at the beginning of the period over adjusted EBITDA.

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