Exhibit 10.3

 

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Sales Compensation Plan

Head of Sales FY11 Incentive Plan

Effective Date: January 1, 2011

End Date: December 31, 2011

The terms and conditions of the Digital Realty Trust L.P. (the “Company”) Sales
Compensation Plan (the “SCP” or “Plan”) are set forth below. For purposes of the
Plan, the term “Company” shall also include Digital Realty Trust, Inc. and any
subsidiary or affiliate of Digital Realty Trust, Inc. or Digital Realty Trust,
L.P. (including, without limitation, DLR, LLC), as the context requires. As of
the Effective Date, the SCP replaces and supersedes all previous Company sales
compensation plans and policies and all other previous oral or written
statements, promises or agreements regarding the subject matter of the SCP. The
SCP applies to all commissions earned while the SCP is in effect. The Company
retains the right to modify, amend, revoke, suspend, terminate or change any
part of the SCP at any time, without advance notice, in the sole, unfettered
discretion of the Company. The terms of the SCP may not be altered or amended
except in writing as approved by the Company’s Chief Executive Officer. All
administration, decisions, calculations and interpretations under the SCP are
made by the Company in its sole, unfettered discretion and shall be conclusive
and binding on all participants.

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PLAN SUMMARY

PLAN PURPOSE

The purpose of the 2011 Incentive Plan is to reward and motivate achievement of
assigned sales objectives. Every person plays a key role in the achievement of
these objectives, which have been tailored to your specific role. Quotas have
been assigned to ensure company and individual success are aligned, and the
payout levels have been set to provide motivational and competitive levels of
compensation.

PLAN COMPONENTS

The purpose of the 2011 Incentive Plan is to reward and motivate achievement of
assigned sales objectives.

 

Performance Measures

   Weight     Threshold     Cap     Measurement
Period    Payout
Frequency    Payout
Calculation

I. Annualized Closed Contract Value (Quota)

     100 %      0 %      175 %    Annual    Quarterly    Year-to-date

I. Annualized Contract Value (100%)

 

Calculation

 

Performance to

Quota

  

Payout as a %

Target

  

Slope

125% +    capped at 175%    NA 100% - 125%    100% - 175%    3.0X 75% - 100%   
60% - 100%    1.6x 50% - 75%    30% - 60%    1.2x 0% - 50%    0%    0.0X

Description:

Annualized Contract Value is defined as the year-to-date annualized revenue
associated with contracts closed in FY11.

Annualized Contract Value will be measured on a year to-date basis.

The table on the left illustrates how your sales incentive will be calculated.
Payment for a single lease transaction will be capped at $100,000.

 

 

Terms and Conditions

INTRODUCTION

The following section details the terms and conditions that govern the payouts
of the incentive plan.

GOAL

The Global Sales Organization is the leading datacenter solutions provider to
the Global 4000, Systems Integrators and managed services providers. This plan
is designed to motivate the sales team to pro-actively engage these types of
companies and to position the Company as the leading datacenter solutions
provider.

ELIGIBILITY

Participation in the SCP is limited to employees who have received a copy of
this SCP that has been signed by him or her and bears an original signature by
the Company’s Chief Executive Officer. Participant may be removed from
participation at any time in the sole, unfettered discretion of the Company.

Unless otherwise allowed by the Company in its sole, unfettered discretion, the
Head of Sales (“Participant”) must be classified by the Company as a regular
full-time employee in a sales position at the time a lease is Executed to be
eligible to earn incentives on that lease.

 

I Agree to this Amendment for 2011    Participant Initial            

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A lease is “Executed” if it has been duly and validly executed by the lessee and
the Company and delivered to the Company.

A Participant is not eligible to earn incentives on a lease Executed after the
Participant ceases to be a full-time employee for any reason. In addition, a
Participant is not eligible to earn the Lease Commencement Incentive (as defined
in the section entitled “Payment of Incentives” hereof) on any lease that
Commences after the Participant ceases to be a full-time employee, for any
reason.

If a Participant is on a Leave of Absence, the Participant is eligible to earn
incentives on leases Executed prior to the start of the Leave of Absence. Leaves
of Absences are defined in the Company’s policies.

 

  •  

The Company may determine that a Participant on a Leave of Absence is eligible
to earn a full or partial incentive on a lease Executed while the Participant is
on the Leave of Absence. (See “Incentive Allocation.”)

Any person who is not an employee of the Company, including but not limited to
family members, is prohibited from performing work on behalf of the Company and
shall have no rights under this Plan.

All Participants shall be required to comply with the Company’s policies and
procedures and applicable law to be eligible to participate in the SCP. If a
Participant fails to adhere to the terms of any Company policy or procedure, the
Participant will be subject to discipline, up to and including ineligibility to
earn incentives on the lease(s) in question, removal from the SCP, and/or
termination of employment.

QUOTAS

For the Plan year, the Participant will be required to meet the Quota outlined
in Appendix A.

INCENTIVE OPPORTUNITY

Subject to the provisions of this Plan, an incentive on a lease is deemed earned
when the lease is fully executed in accordance with its terms and without regard
to actual receipt of rent.

All leases are subject to review, interpretation and approval by the Company.

Deductions

Before sales credit is provided, Total Lease Value Credits are reduced by the
following items:

DLR capital expenditures (including but not limited to):

 

  •  

Tenant Improvement allowances provided by the Company;

 

  •  

Landlord Work provided by the Company;

 

  •  

Interest on financing provided by the Company

 

  •  

Third party commissions paid by the Company;

 

  •  

Referral fees paid by the Company;

Lease values beyond the first Lease Termination Option date, if any

PAYMENT OF ADVANCES AND INCENTIVES

The payment of incentives will be paid as soon as possible, but within 45 days
after the expiration of the fiscal calendar quarter in which Execution occurs.
Notwithstanding anything contained herein, in no event shall any incentive be
paid later than the last day of the applicable two and one-half (2- 1/2) month
“short-term deferral period” with respect to such incentive, within the meaning
of Treasury Regulation Section 1.409A-1(b)(4).

Taxes, withholding and authorized deductions will be deducted before each
payment.

 

I Agree to this Amendment for 2011    Participant Initial            

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CHARGEBACKS

In the Company’s sole, unfettered discretion, a Participant’s advance or earned
incentive may be reduced to the extent that the Company refunds any revenue,
reduces a lease price, or writes off any portion of a transaction for any
reason.

TERMINATION OF EMPLOYMENT

A Participant shall not be eligible to earn any incentives on leases that are
Executed after the date employment with the Company is terminated for any reason
(the “Termination Date”).

A Participant shall not be eligible to receive any incentive advances after the
Termination Date. Immediately upon the termination, a Participant must return to
the Company any document (and all copies) and other Company property in the
Participant’s possession, custody or control, including, without limitation, any
customer information or other sales-related materials.

GENERAL RULES

All references to currency are in local currencies. The SCP applies only to
leases Executed in 2011.

To be eligible for incentives in 2011, the Participant must sign and return this
SCP within fourteen (14) days of receipt.

ADMINISTRATION

The Chief Executive Officer is the selected designees of the Company who shall
be responsible for the implementation and ongoing administration of the SCP.

All administration, calculations, determinations and interpretations of the SCP
are made in the sole, unfettered, exclusive and final discretion of the Company.

A Participant must report any potential dispute under the SCP in writing to the
Company’s Chief Executive Officer within 30 days of receipt of the relevant
statement or payment, whichever is earlier.

The Company may amend or discontinue the SCP in whole or in part, without
notice, at any time.

To be binding on the Company, any amendment of the SCP must be in writing and
signed by the Company’s Chief Executive Officer.

EMPLOYMENT AT-WILL

The SCP does not create a guarantee of employment for any specific period of
time. Nothing in the SCP is intended to or operates to change a Participant’s or
the Company’s right to terminate the employment relationship at-will; that is,
at any time, with or without cause and with or without advance notice.

SEVERABILITY

Should an arbitrator or court of competent jurisdiction determine that any
provision of this SCP is unenforceable, in whole or in part, such determination
will not affect any other provision of this SCP, and the provision in question
will be modified by the arbitrator or court so as to be enforceable.

ENTIRE PLAN

This SCP sets forth the entire understanding between the Company and the
Participant relating to the subjects covered by the SCP.

CODE SECTION 409A

To the extent applicable, the SCP shall be interpreted and applied consistent
and in accordance with Section 409A of the Internal Revenue Code of 1986, as
amended, and Department of Treasury regulations and other interpretive guidance
issued thereunder. Notwithstanding any provision of this Agreement to the
contrary, if the Company determines that any compensation or benefits payable
under the SCP may not be either exempt from

 

I Agree to this Amendment for 2011    Participant Initial            

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or compliant with Section 409A and related Department of Treasury guidance, the
Company may in its sole, unfettered discretion adopt such amendments to the SCP
or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, that the Company
determines are necessary or appropriate to (i) exempt the compensation and
benefits payable under this Agreement from Section 409A and/or preserve the
intended tax treatment of such compensation and benefits, or (ii) comply with
the requirements of Section 409A and related Department of Treasury guidance;
provided, however, that this provision shall not create an obligation on the
part of the Company to adopt any such amendment, policy or procedure or take any
such other action.

ACKNOWLEDGEMENTS AND AGREEMENTS

The undersigned has read and agrees to be bound by this SCP, including the
Company’s sole, unfettered, exclusive and final discretion and authority to
administer and make all decisions, calculations and interpretations under the
SCP, each of which shall be conclusive and binding on the undersigned.

The undersigned agrees that this SCP sets forth the terms of his/her incentive
compensation with the Company. The undersigned understands and acknowledges that
commissions under the SCP are not earned and do not constitute wages until all
requirements under the SCP have been met as determined solely by the Company.
The undersigned acknowledges that, in the event he or she receives any advance
or commission payment in error, he or she is obligated immediately to repay it
to the Company. To the extent permitted by applicable law, the undersigned
expressly authorizes the Company to deduct any erroneous payment from his or her
advances, commissions, other compensation, severance pay, expense
reimbursements, or any other funds owed to the undersigned by the Company.

The undersigned acknowledges the Company’s rights to modify, amend, revoke,
suspend, terminate or change any part of the SCP from time to time, in its sole,
unfettered discretion, without advance notice, and all such modifications,
amendments and other actions will be binding on the undersigned.

Finally, the undersigned acknowledges that he or she has had an opportunity to
review this plan with his or her lawyer.

 

Approved:   Signature:  

 

Print Name:  

Mike Foust

Date:  

 

Title:  

Chief Executive Officer

Participant   Signature:  

 

Print Name:  

 

Date:  

 

 

I Agree to this Amendment for 2011   

Participant Initial