Exhibit 10.2

 

QTS REALTY TRUST, INC.

2013 EQUITY INCENTIVE PLAN

PERFORMANCE SHARE UNIT AGREEMENT

 (Performance-Based FFO Units)

Performance Share Units

    

This Agreement evidences an award of PSUs in the Target Number set forth on the
cover sheet and subject to the terms and conditions set forth in the Agreement
and in the Plan. 

The Plan

 

The text of the Plan is incorporated in this Agreement by reference.

Certain capitalized terms used in this Agreement are defined in the Plan, and
have the meaning set forth in the Plan.

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this grant.  Any prior agreements, commitments or
negotiations concerning this grant are superseded; except that any written
employment, consulting, confidentiality, non-competition, non-solicitation
and/or severance agreement between you and the Company or any Affiliate shall
supersede this Agreement with respect to its subject matter, unless explicitly
superseded by this Agreement. 

Transfer of Performance Share Units

 

The PSUs may not be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered, whether by operation of law or otherwise, nor may the PSUs
be made subject to execution, attachment or similar process.  If you attempt to
do any of these things, the PSUs will immediately become forfeited.

Vesting

 

The PSUs shall become earned and vested in accordance with Exhibit A.  

Certain Terminations

 

Notwithstanding the terms of any employment agreement between you and the
Company or an Affiliate that addresses the treatment of equity awards upon a
termination of employment, in the event of your Involuntary Termination prior to
the Certification Date, you shall remain eligible to earn a pro rata portion of
the number of PSUs that become earned in accordance with Exhibit A, and such
number of PSUs that becomes earned shall fully vest as of the Certification Date
(as defined in Exhibit A).  The prorata portion described in the preceding
sentence shall be equal to a fraction, (i) the numerator of which equals the
number of days elapsed in the Performance Period through the date of your
Involuntary Termination, and (ii) the denominator of which equals the total
number of days in the

 

1

--------------------------------------------------------------------------------

 

 

 

 

Performance Period.  In the event of your Involuntary Termination following the
Certification Date but prior to the third anniversary of the Grant Date, all
remaining unvested PSUs shall become fully vested on the date of such
Involuntary Termination.

For purposes of this section, “Involuntary Termination” means termination of
your Service by reason of (i) your death; (ii) your Disability; (iii) your
involuntary dismissal by the Company or its successor for reasons other than
Cause; or (iv) your voluntary resignation for Good Reason as defined in any
applicable employment or severance agreement, plan, or arrangement between you
and the Company, or if none, then following (x) a substantial adverse alteration
in your title or responsibilities; (y) a reduction in your annual base salary or
a material reduction in your annual target bonus opportunity; or (z) the
relocation of your principal place of employment to a location more than 35
miles from your principal place of employment or the Company's requiring you to
be based anywhere other than such principal place of employment (or permitted
relocation thereof); provided that, you have first given notice to the Company
of the occurrence of an act described in (x), (y) or (z) within 90 days of the
initial occurrence and the Company has not remedied such occurrence within 30
days after receipt of such notice.

Change in Control

 

Notwithstanding any provision of the Plan to the contrary, upon the consummation
of a Change in Control prior to December 31, 2020, in which the PSUs are
assumed, or restricted securities of equivalent value are substituted for the
PSUs, by the Company or its successor, the PSUs shall cease to be subject to the
performance conditions set forth in Exhibit A,  and two-thirds of the Target
Number of PSUs will become vested as of December 31, 2020, and one-third of the
Target Number of PSUs will become vested on the third anniversary of the Grant
Date, subject to your continued Service through each vesting date; provided
that, in the event of your Involuntary Termination within the 12-month period
following the consummation of the Change in Control, all remaining unvested
shares shall become fully vested.  If the PSUs are not assumed or substituted
for in connection with any Change in Control, you will become immediately vested
in 100% of the Target Number of PSUs, notwithstanding any provision of the Plan
to the contrary.

For purposes of this section, “Involuntary Termination” means termination of
your Service by reason of (i) your death; (ii) your Disability; (iii) your
involuntary dismissal by the Company or its successor for reasons other than
Cause; or (iv) your voluntary resignation for Good Reason as defined in any
applicable employment

 

2

--------------------------------------------------------------------------------

 

 

 

 

or severance agreement, plan, or arrangement between you and the Company, or if
none, then as set forth in the Plan following (x) a substantial adverse
alteration in your title or responsibilities from those in effect immediately
prior to the Change in Control; (y) a reduction in your annual base salary as of
immediately prior to the Change in Control (or as the same may be increased from
time to time) or a material reduction in your annual target bonus opportunity as
of immediately prior to the Change in Control; or (z) the relocation of your
principal place of employment to a location more than 35 miles from your
principal place of employment as of the Change in Control or the Company's
requiring you to be based anywhere other than such principal place of employment
(or permitted relocation thereof) except for required travel on the Company's
business to an extent substantially consistent with your business travel
obligations as of immediately prior to the Change in Control; provided that, you
have first given notice to the Company of the occurrence of an act described in
(x), (y) or (z) within 90 days of the initial occurrence and the Company has not
remedied such occurrence within 30 days after receipt of such notice.

Forfeiture of Unvested Performance Share Units

 

Unless the termination of your Service triggers accelerated vesting of your PSUs
or other treatment pursuant to the terms of this Agreement or the Plan, you will
automatically forfeit to the Company all of the PSUs that have not vested in the
event you have a Separation from Service.

Effective as of the Certification Date (as defined in Exhibit A), you will
forfeit to the Company all of the PSUs that do not become earned under the
Award, as determined by the Committee. 

Delivery

 

Delivery of the Shares represented by your vested PSUs shall be made within 30
days of the applicable vesting date set forth in Exhibit A, or, if earlier, your
Separation from Service resulting in your immediate vesting of PSUs.

Forfeiture of Rights

 

 

If you should take actions in violation or breach of or in conflict with any
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of any the Company or any Affiliate or any confidentiality obligation
with respect to the Company or any Affiliate or otherwise in competition with
the Company or any Affiliate, the Company has the right to cause an immediate
forfeiture of your rights to the PSUs awarded under this Agreement and the PSUs
shall immediately expire.

In addition, if you have vested in PSUs during the three year period prior to
your actions, you will owe the Company a cash payment (or

 

3

--------------------------------------------------------------------------------

 

 

 

 

forfeiture of Shares) in an amount determined as follows: (1) for any Shares
that you have sold prior to receiving notice from the Company, the amount will
be the proceeds received from the sale(s), and (2) for any Shares that you still
own, the amount will be the number of Shares owned times the Fair Market Value
of the Shares on the date you receive notice from the Company (provided, that
the Company may require you to satisfy your payment obligations hereunder either
by forfeiting and returning to the Company the Performance Shares or any other
Shares or making a cash payment or a combination of these methods as determined
by the Company in its sole discretion).  

Leaves of Absence

 

For purposes of this Agreement, you do not have a Separation from Service when
you go on a bona fide leave of absence that was approved by your employer in
writing if the terms of the leave provide for continued Service crediting, or
when continued Service crediting is required by applicable law.  You will have a
Separation from Service in any event when the approved leave ends unless you
immediately return to active employee work.

Your employer may determine, in its discretion, which leaves count for this
purpose, and when you have a Separation from Service for all purposes under the
Plan in accordance with the provisions of the Plan. Notwithstanding the
foregoing, the Company may determine, in its discretion, that a leave counts for
this purpose even if your employer does not agree.

Withholding Taxes

 

You agree as a condition of this grant that you will make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the vesting of the PSUs.  In the event that the Company or any Affiliate
determines that any federal, state, local or foreign tax or withholding payment
is required relating to the vesting of the PSUs arising from this grant, the
Company or any Affiliate shall have the right to require such payments from you,
or withhold such amounts from other payments due to you from the Company or any
Affiliate (including withholding the delivery of vested Shares otherwise
deliverable under this Agreement).

Retention Rights

 

This Agreement and the grant evidenced hereby do not give you the right to be
retained by the Company or any Affiliate in any capacity. Unless otherwise
specified in an employment or other written agreement between the Company or any
Affiliate and you, the Company or any Affiliate reserves the right to terminate
your Service at any time and for any reason.

 

4

--------------------------------------------------------------------------------

 

 

Shareholder Rights and Dividend Equivalent Rights

 

You have no rights as a shareholder of the Company (including, without
limitation, the right to receive quarterly or special dividends) with respect to
the PSUs unless and until a certificate for the Shares relating to the vested
PSUs has been issued to you (or an appropriate book entry has been made).

Notwithstanding the foregoing, the Company grants you a Dividend Equivalent
Right relating to each PSU which vests, if any, pursuant to this Agreement or
the Plan.  If the Company declares a cash dividend on the Company’s outstanding
Shares prior to the date the PSUs vest in accordance with Exhibit A, the amount
of the cash dividend per Share declared prior to such vesting date shall be
deemed to be reinvested in additional Shares. Any such reinvestment shall be at
Fair Market Value on the date of reinvestment.  Your Dividend Equivalent Right
will be settled in a number of Shares equal to the number of PSUs which vest
pursuant to this Agreement, multiplied by the number of additional Shares
determined in accordance with the preceding sentence.  Delivery of the Shares
representing your Dividend Equivalent Right shall occur concurrently with the
delivery of the Shares represented by your vested PSUs. 

Clawback

 

This Award is subject to mandatory repayment by you to the Company to the extent
you are or in the future become subject to any Company “clawback” or recoupment
policy that requires the repayment by you to the Company of compensation paid by
the Company to you in the event that you fail to comply with, or violate, the
terms or requirements of such policy.

If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws and you knowingly
engaged in the misconduct, were grossly negligent in engaging in the misconduct,
knowingly failed to prevent the misconduct or were grossly negligent in failing
to prevent the misconduct, you shall reimburse the Company the amount of any
payment in settlement of this Award earned or accrued during the 12-month period
following the first public issuance or filing with the United States Securities
and Exchange Commission (whichever first occurred) of the financial document
that contained such material noncompliance.

Notwithstanding any other provision of the Plan or any provision of this
Agreement, if the Company is required to prepare an accounting restatement, then
you shall forfeit any Shares received in connection with this Award (or an
amount equal to the fair market value of such

 

5

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

Shares on the date of delivery if you no longer hold the Shares) if pursuant to
the terms of this Agreement, the amount of the Award earned or the vesting in
the Award was explicitly based on the achievement of pre-established performance
goals set forth in this Agreement (including earnings, gains, or other criteria)
that are later determined, as a result of the accounting restatement, not to
have been achieved.

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of
Maryland, other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction.

Data Privacy

 

In order to administer the Plan, the Company may process personal data about
you.  Such data includes, but is not limited to, information provided in this
Agreement and any changes thereto, other appropriate personal and financial data
about you such as your contact information, payroll information and any other
information that might be deemed appropriate by the Company to facilitate the
administration of the Plan.

By accepting this grant, you give explicit consent to the Company to process any
such personal data.

Purchase Price

 

If a purchase price is required by Applicable Law, it shall be deemed paid by
your prior or future Service.

Electronic Delivery

 

The Company may choose to deliver certain statutory materials relating to the
Plan in electronic form.  By accepting this grant you agree that the Company may
deliver the Plan prospectus and the Company’s annual report to you in an
electronic format.  If at any time you would prefer to receive paper copies of
these documents, please contact Shirley Goza at shirley.goza@qtsdatacenter.com
or 913-312-5503 to request paper copies of these documents.

Code Section 409A

 

For purposes of this Agreement, you shall have a “Separation from Service” when
the Company reasonably anticipates that your level of Service will permanently
decrease to no more than 20 percent of the average level of Service you have
performed over the immediately preceding 36-month period (or such lesser period
of your Service with the Company and its Affiliates), which shall be interpreted
consistently with the provisions of Section 409A of the Code and the regulations
promulgated thereunder (“Section 409A”).

It is intended that the Agreement comply with Section 409A to the extent subject
thereto, and, accordingly, to the maximum extent permitted, the Agreement will
be interpreted and administered to be in

 

6

--------------------------------------------------------------------------------

 

 

 

    

compliance with Section 409A.  To the extent that the Company determines that
you would be subject to the additional taxes or penalties imposed on certain
nonqualified deferred compensation plans pursuant to Section 409A as a result of
any provision of this Agreement, such provision shall be deemed amended to the
minimum extent necessary to avoid application of such additional taxes or
penalties.  The nature of any such amendment shall be determined by the
Company.  Notwithstanding anything to the contrary in this Agreement or the
Plan, to the extent required to avoid accelerated taxation and penalties under
Section 409A, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to the Agreement during the six-month period
immediately following your Separation from Service will instead be paid on the
first payroll date after the six-month anniversary of your Separation from
Service (or your death, if earlier).  Each installment of PSUs that vests under
this Agreement (if there is more than one installment) will be considered one of
a series of separate payments for purposes of Section 409A.

 

By signing this Agreement, you agree to all of the terms and conditions
described above and in the Plan.

 

7

--------------------------------------------------------------------------------

 

 

EXHIBIT A

The number of PSUs that may be earned under the Award (“Earned PSUs”) shall be
based on based on the Company’s Run-Rate over the Performance Period, determined
as follows:

 

Run-Rate for the
Performance Period

Earned PSUs

$3.20

200% of the Target Number of PSUs

$3.00

100% of the Target Number of PSUs

$2.85

50% of the Target Number of PSUs

< $2.85

0% of the Target Number of PSUs

 

 

1.

If the Run Rate for the Performance Period is less than $2.85, none of the
Target Number of PSUs shall be earned for the Performance Period.

2.

If the Company’s Run Rate for the Performance Period equals $3.00, then 100% of
the Target Number of PSUs shall become Earned PSUs.

3.

To the extent that the Run Rate of the Company is greater than $2.85 and less
than $3.00, then a number of PSUs between 50% and 100% of the Target Number of
PSUs will become Earned PSUs, determined by linear interpolation.

4.

To the extent that the Run Rate of the Company is greater than $3.00 and less
than $3.20, then a number of PSUs between 100% and 200% of the Target Number of
PSUs will become Earned PSUs, determined by linear interpolation.

5.

In no event shall more than 200% of the Target Number of PSUs set forth on the
cover sheet become Earned PSUs under this Agreement.

 

Promptly following the completion of the Performance Period (and no later than
seventy-five (75) days following the end of the Performance Period), the
Committee will review and certify in writing (i) the Run Rate for the
Performance Period and (ii) the Earned PSUs, with any fractional PSUs rounded
down to the next whole integer (such date, the “Certification Date”).  Such
certification will be final, conclusive, and binding.

 

To the extent the Committee certifies a positive number of Earned PSUs, then the
Earned PSUs shall vest: (a) as to two-thirds of the Earned PSUs, on the
Certification Date, and (b) as to one-third of the Earned PSUs, on the third
anniversary of the Grant Date, subject to your continued Service through each
applicable vesting date.

 

 

8

--------------------------------------------------------------------------------

 

For purposes of this Exhibit A:

 

“Performance Period” shall mean the period commencing on January 1, 2019 and
ending on December 31, 2020.

“Run-Rate” shall mean ‘Operating Funds From Operations available to common
shareholders and OP unit holders per diluted share’, as reported in the
Company’s financial statements in its Supplemental Information to the Earnings
Report, for the fourth fiscal quarter (Three Months Ended) ending December 31,
2020, multiplied by 4; provided, however, the Committee shall have discretion to
make appropriate adjustments for extraordinary items.

9

--------------------------------------------------------------------------------