Exhibit 10.1

DIGITAL REALTY TRUST, INC.

FOUR EMBARCADERO CENTER, SUITE 3200

SAN FRANCISCO, CA 94111

November 23, 2014

A. William Stein

c/o Digital Realty Trust, Inc.

Four Embarcadero Center, Suite 3200

San Francisco, California 94111

 

  Re: EMPLOYMENT TERMS

Dear Mr. Stein:

Digital Realty Trust, Inc. (the “REIT”) and DLR LLC (the “Employer” and together
with the REIT, the “Company”) are pleased to continue your employment with the
REIT and the Employer on the terms and conditions set forth in this letter (this
“Agreement”), effective as of November 23, 2014 (the “Effective Date”). This
Agreement replaces and supersedes in its entirety that certain employment
letter, by and between you and the Company, dated as of August 7, 2008, as
amended (the “Prior Agreement”).

1. TERM. Subject to the provisions for earlier termination hereinafter provided,
your employment hereunder shall be for a term (the “Term”) commencing on the
Effective Date and ending on the third anniversary of the Effective Date (the
“Initial Termination Date”). If not previously terminated, the Term shall
automatically be extended for one additional year on the Initial Termination
Date, unless either you or the Company elect not to so extend the Term by
notifying the other party, in writing, of such election not less than sixty
(60) days prior to the Initial Termination Date.

2. POSITION, DUTIES AND RESPONSIBILITIES. During the Term, the Company will
employ you, and you agree to be employed by the Company, as Chief Executive
Officer of the REIT and the Employer. In the capacity of Chief Executive
Officer, you will have such duties and responsibilities as are normally
associated with such position and will devote your full business time and
attention to serving the Company in such position. Your duties may be changed
from time to time by the Company, consistent with your position. You will report
to the Board of Directors of the REIT (the “Board”), and will work full-time at
our principal offices located in San Francisco California (or such other
location in the San Francisco greater metropolitan area as the Company may
utilize as its principal offices), except for travel to other locations as may
be necessary to fulfill your responsibilities. At the Company’s request, you
will serve the Company and/or its subsidiaries and affiliates in other offices
and capacities in addition to the foregoing. In the event that you serve in any
one or more of such additional capacities, your compensation will not be
increased beyond that specified in this Agreement. In addition, in the event
your service in one or more of such additional capacities is terminated, your
compensation, as specified in this Agreement, will not be diminished or reduced
in any manner as a result of such termination for so long as you otherwise
remain employed under the terms of this Agreement.

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

3. BASE COMPENSATION. During the Term, effective as of November 4, 2014, the
Company will pay you a base salary of $750,000 per year, less payroll deductions
and all required withholdings, payable in accordance with the Company’s normal
payroll practices and prorated for any partial month of employment. Your annual
base salary may be increased, but not decreased, by the Compensation Committee
of the Board in its discretion pursuant to the Company’s policies as in effect
from time to time, and such increased amount thereafter will be your base salary
per year for purposes of this Agreement.

4. ANNUAL BONUS. In addition to the base salary set forth above, during the
Term, you will be eligible to participate in the Company’s incentive bonus plan
applicable to similarly situated executives of the Company. The amount of your
annual bonus will be based on the attainment of performance criteria established
and evaluated by the Company in accordance with the terms of such bonus plan as
in effect from time to time, provided that, subject to the terms of such bonus
plan and attainment of performance criteria established by the Company, your
target and maximum annual bonus shall be at least one hundred percent (100%) and
one hundred fifty percent (150%), respectively, of your base salary for such
year. Any annual bonus that becomes payable to you is intended to satisfy the
short-term deferral exemption under Treasury Regulation Section 1.409A-1(b)(4)
and shall be made not later than the last day of the applicable two and one-half
(2 1⁄2) month “short-term deferral period” with respect to such annual bonus,
within the meaning of Treasury Regulation Section 1.409A-1(b)(4).

5. BENEFITS AND VACATION. During the Term, you will be eligible to participate
in all incentive, savings and retirement plans, practices, policies and programs
maintained or sponsored by the Company from time to time which are applicable to
other similarly situated executives of the Company, subject to the terms and
conditions thereof. During the Term, you will also be eligible for standard
benefits, such as medical insurance, paid time-off and holidays to the extent
applicable generally to other similarly situated executives of the Company,
subject to the terms and conditions of the applicable Company plans or policies.

6. TERMINATION OF EMPLOYMENT.

(a) Without Cause or for Good Reason. Subject to paragraph (g) below, in the
event of a termination of your employment during the Term by the Company without
Cause or by you for Good Reason (each as defined below), then, in addition to
any other accrued amounts payable to you through the date of termination of your
employment (such date, or the date of your death if applicable under
Section 6(c) below, the “Termination Date”), the Company will pay and provide
you with the following payments and benefits:

(i) payable within thirty (30) days after your Termination Date (with the exact
payment date to be determined by the Company in its discretion), a lump-sum
severance payment in an amount equal to the sum of (x) two (2.0) (the “Severance
Multiple”) times the sum of (A) your annual base salary as in effect on the
Termination Date, plus (B) the average annual bonus earned by you for the three
(3) Company fiscal years immediately preceding the Company fiscal year in which
the Termination Date occurs (in the case of both (A) and (B), without giving
effect to any reduction which constitutes Good Reason), (y) the Stub Year Bonus,
plus (z) the Prior Year Bonus, if any;

 

2

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

(ii) for a period commencing on the Termination Date and ending on the earlier
of (x) the eighteen (18)-month anniversary of the Termination Date or (y) the
date on which you become eligible to receive comparable group health insurance
coverage under a subsequent employer’s plans, the Company shall continue to
provide you and your eligible family members with group health insurance
coverage at least equal to that which would have been provided to you if your
employment had not been terminated (including, in the discretion of the Company,
by purchasing COBRA coverage for you and your eligible family members);
provided, however, that if (A) any plan pursuant to which the Company is
providing such coverage is not, or ceases prior to the expiration of the period
of continuation coverage to be, exempt from the application of Section 409A of
the Code (as defined below) under Treasury Regulation Section 1.409A-1(a)(5), or
(B) the Company is otherwise unable to continue to cover you under its group
health plans or doing so would jeopardize the tax-qualified status of such
plans, then, in either case, an amount equal to the monthly plan premium payment
shall thereafter be paid to you as currently taxable compensation in
substantially equal monthly installments over the continuation period (or the
remaining portion thereof);

(iii) for a period commencing on the Termination Date and ending on the twelve
(12)-month anniversary of the Termination Date, the Company shall, at its sole
expense and on an as-incurred basis, provide you with outplacement counseling
services directly related to your termination of employment with the Company,
the provider of which shall be selected by the Company; and

(iv) to the extent that any outstanding Company equity-based awards issued to
you under the Company’s equity incentive plans are subject to vesting based on
continued employment or the lapse of time, such awards shall become vested and
exercisable immediately prior to the Termination Date. The vesting of any awards
that are subject to vesting based on the satisfaction of performance goals,
including, without limitation, any performance-based profits interest units of
Digital Realty Trust, L.P. (the “Operating Partnership”) and other
“outperformance awards” issued to you, shall be governed by the terms of the
award agreements evidencing such awards. For purposes of clarification, except
as otherwise provided under any award agreements relating to such awards, the
terms set forth in this Agreement, including this Section 6, are intended to be
in addition to (and not in lieu of) the vesting and acceleration features
related to such stock options and other equity-based awards (including profits
interest units of the Operating Partnership and other “outperformance awards”)
held by you and included elsewhere, including in any award agreements related to
such awards, and the vesting and acceleration terms hereof shall be applicable
only to the extent they result in additional acceleration or vesting of such
stock options and other equity-based awards held by you.

(b) Change in Control. Subject to paragraph (g) below, in the event that a
Change in Control (as defined in the Digital Realty Trust, Inc., Digital
Services, Inc. and Digital Realty Trust, L.P. 2014 Incentive Award Plan or any
successor incentive plan) occurs during the Term and, on the date of or within
one year after such Change in Control, you incur a termination of employment by
the Company without Cause or by you for Good Reason (each as defined below),
then, in addition to any other accrued amounts payable to you through the
Termination Date, you shall be entitled to the payments and benefits provided in
Section 6(a) hereof, subject to the terms and conditions thereof, except that,
for purposes of this Section 6(b), the Severance Multiple shall be equal to
three (3.0).

 

3

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

(c) Death or Disability. Subject to paragraph (g) below, and notwithstanding
anything to the contrary contained herein, in the event of a termination of your
employment during the Term by reason of your death or Disability (as defined
below), then, in addition to any other accrued amounts payable to you through
the Termination Date, the Company will pay and provide you (or your estate or
legal representative) with the following payments and benefits:

(i) payable within thirty (30) days after your Termination Date (with the exact
payment date to be determined by the Company in its discretion), a lump-sum
severance payment in an amount equal to the sum of (w) your annual base salary
as in effect on the Termination Date, (x) your target annual bonus for the
fiscal year in which the Termination Date occurs, (y) the Stub Year Bonus, plus
(z) the Prior Year Bonus, if any; and

(ii) to the extent that any outstanding Company equity-based awards issued to
you under the Company’s equity incentive plans are subject to vesting based on
continued employment or the lapse of time, such awards shall become vested and
exercisable immediately prior to the Termination Date. The vesting of any awards
that are subject to vesting based on the satisfaction of performance goals,
including, without limitation, any performance-based profits interest units of
the Operating Partnership and other “outperformance awards” issued to you, shall
be governed by the terms of the award agreements evidencing such awards.

(d) Expiration; Non-renewal. Notwithstanding anything contained herein, in no
event shall the expiration of the Term set forth in Section 1 above or the
Company’s election not to renew or extend the Term or your employment with the
Company constitute a termination your employment by the Company without Cause.

(e) Termination of Offices and Directorships. Upon a termination of your
employment for any reason, except to the extent otherwise determined by the
Board in its sole discretion, you shall be deemed to have resigned from all
offices, directorships and other employment positions, if any, then held with
the Company or any member of the Digital Group (as defined below), and you agree
that you shall take all actions reasonably requested by the Company to
effectuate the foregoing.

(f) Potential Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, no compensation or benefits, including without limitation any
termination payments or benefits payable under this Section 6, shall be paid to
you prior to the expiration of the six (6)-month period following your
“separation from service” from the Company (within the meaning of
Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”)) to the extent that the Company determines that paying such amounts at
the time or times indicated in this Agreement would be a prohibited distribution
under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts
is delayed as a result of the previous sentence, then on the first business day
following the end of such six (6)-month period (or such earlier date upon which
such amount can be paid under Section 409A of the Code without resulting in a
prohibited distribution, including as a result of your death), the Company shall
pay you a lump-sum amount equal to the cumulative amount that would have
otherwise been payable to you during such six (6)-month period, plus interest
thereon from the Termination Date through the payment date at a rate equal to
the then-current “applicable Federal rate” determined under
Section 7872(f)(2)(A) of the Code.

 

4

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

(g) Release; Compliance with Covenants. Notwithstanding anything contained
herein, your right to receive the payments and benefits set forth in this
Section 6 is conditioned on and subject to (i) your execution within twenty-one
(21) days (or, to the extent required by applicable law, forty-five (45) days)
following the Termination Date and non-revocation within seven (7) days
thereafter of a general release of claims against the Digital Group (as defined
below), in a form reasonably acceptable to the Company, (ii) your continued
compliance with the restrictive covenants set forth in Section 8 of this
Agreement and any similar covenants set forth in any other agreement between you
and the Company, and (iii) your compliance with Section 6(e) above.

(h) Definitions. For purposes of this Agreement:

(A) “Cause” shall mean (1) your willful and continued failure to substantially
perform your duties with the Company (other than any such failure resulting from
your incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to you by the Company, which demand
specifically identifies the manner in which the Company believes that you have
not substantially performed your duties and which failure is not cured within
thirty (30) days of receiving such notice; (2) your willful commission of an act
of fraud or dishonesty resulting in economic or financial injury to the Company
or its subsidiaries or affiliates; (3) your conviction of, or entry by you of a
guilty or no contest plea to, the commission of a felony or a crime involving
moral turpitude; (4) a willful breach by you of any fiduciary duty owed to the
Company which results in economic or other injury to the Company or its
subsidiaries or affiliates; (5) your willful and gross misconduct in the
performance of your duties hereunder that results in economic or other injury to
the Company or its subsidiaries or affiliates and which is breach in not cured
within thirty (30) days after written notification is delivered to you by the
Company that specifically identifies the manner in which the Company believes
that you have breached any such duty; (6) your willful and material breach of
your covenants set forth in Section 8 below; or (7) a material breach by you of
any of your other obligations under this Agreement after written notice is
delivered to you by the Company which specifically identifies such breach. For
purposes of this provision, no act or failure to act on your part will be
considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best
interests of the Company. Notwithstanding the foregoing, in the event you incur
a “separation from service” by reason of a termination of your employment by the
Company (other than by reason of your death or Disability or pursuant to clause
(3) of this paragraph) on or within one year after a Change in Control or within
the six month period immediately preceding a Change in Control in connection
with such Change in Control, it shall be presumed for purposes of this Agreement
that such termination was effected by the Company other than for Cause unless
the contrary is established by the Company. In addition, notwithstanding the
foregoing, your employment will not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of a majority the Board, including a

 

5

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

majority of the independent directors, at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to you and you are given
an opportunity to be heard before the Board), finding that, in the good faith
opinion of the Board, sufficient Cause exists to terminate your employment;
provided, that you shall not participate in the deliberations regarding such
resolution, vote on such resolution, nor shall you be counted in determining a
majority of the Board.

(B) “Disability” shall mean a disability that qualifies or, had you been a
participant, would qualify you to receive long-term disability payments under
the Company’s group long-term disability insurance plan or program, as it may be
amended from time to time.

(C) “Good Reason” shall mean the occurrence of any one or more of the following
events without your prior written consent, unless the Company fully corrects the
circumstances constituting Good Reason (provided such circumstances are capable
of correction) prior to the Termination Date: (1) the Company’s assignment to
you of any duties materially inconsistent with your position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 hereof, or any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company; (2) the Company’s material reduction of your annual
base salary or bonus opportunity, each as in effect on the date hereof or as the
same may be increased from time to time; (3) the relocation of the Company’s
offices at which you are principally employed (the “Principal Location”) to a
location more than 45 miles from such location, or the Company’s requiring you
to be based at a location more than forty-five (45) miles from the Principal
Location, except for required travel on Company business; or (4) a material
breach by the Company of Section 15 of this Agreement. Notwithstanding the
foregoing, you will not be deemed to have resigned for Good Reason unless
(x) you provide the Company with notice of the circumstances constituting Good
Reason within sixty (60) days after the initial occurrence or existence of such
circumstances, (y) the Company fails to correct the circumstance so identified
within 30 days after the receipt of such notice (if capable of correction), and
(z) the Termination Date occurs no later than one hundred eighty (180) days
after the initial occurrence of the event constituting Good Reason.

(D) “Prior Year Bonus” shall mean, for any Termination Date that occurs between
January 1 of any fiscal year and the date that annual bonuses are paid by the
Company for the immediately preceding year (the “Prior Year”), your target
annual bonus (without giving effect to any reduction which constitutes Good
Reason) for such Prior Year, unless the Compensation Committee has determined
your bonus for such Prior Year, in which case the Prior Year Bonus shall be the
bonus determined by the Compensation Committee, if any. The Prior Year Bonus, if
any, shall be in lieu of your annual bonus for the Prior Year. There will be no
Prior Year Bonus in connection with any Termination Date that occurs on or after
the date the Company pays annual bonuses for the Prior Year through the end of
the year in which the Termination Date occurs.

 

6

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

(E) “Stub Year Bonus” shall mean the product obtained by multiplying (x) your
target annual bonus for the fiscal year in which the Termination Date occurs
(without giving effect to any reduction which constitutes Good Reason)
multiplied by (y) a fraction, the numerator of which is the number of calendar
days that have elapsed in the then current fiscal year through the Termination
Date and the denominator of which is 365.

7. LIMITATION ON PAYMENTS.

(a) Best Pay Cap. Notwithstanding any other provision of this Agreement, in the
event that any payment or benefit received or to be received by you (including
any payment or benefit received in connection with a termination of your
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement) (all such payments and benefits, including the
payments and benefits under Section 6 of this Agreement, the “Total Payments”)
would be subject (in whole or part) to the excise tax imposed under Section 4999
of the Code (the “Excise Tax”), then, after taking into account any reduction in
the Total Payments provided by reason of Section 280G of the Code in such other
plan, arrangement or agreement, your remaining Total Payments shall be reduced
to the extent necessary so that no portion of the Total Payments is subject to
the Excise Tax, but only if (i) the net amount of such Total Payments, as so
reduced (and after subtracting the net amount of federal, state and local income
taxes applicable to such reduced Total Payments and after taking into account
the phase out of itemized deductions and personal exemptions attributable to
such reduced Total Payments) is greater than or equal to (ii) the net amount of
such Total Payments without such reduction (but after subtracting the net amount
of federal, state and local income taxes on such Total Payments and the amount
of Excise Tax to which you would be subject in respect of such unreduced Total
Payments and after taking into account the phase out of itemized deductions and
personal exemptions attributable to such unreduced Total Payments). The
reduction undertaken pursuant to this Section 7(a) shall be accomplished first
by reducing or eliminating any cash payments subject to Section 409A of the Code
as deferred compensation (with payments to be made furthest in the future being
reduced first), then by reducing or eliminating cash payments that are not
subject to Section 409A of the Code, then by reducing payments attributable to
equity-based compensation (or the accelerated vesting thereof) subject to
Section 409A of the Code as deferred compensation (with payments to be made
furthest in the future being reduced first), and finally by reducing payments
attributable to equity-based compensation (or the accelerated vesting thereof)
that is not subject to Section 409A of the Code.

(b) Certain Exclusions. For purposes of determining whether and the extent to
which the Total Payments will be subject to the Excise Tax, (i) no portion of
the Total Payments, the receipt or retention of which you have waived at such
time and in such manner so as not to constitute a “payment” within the meaning
of Section 280G(b) of the Code, will be taken into account; (ii) no portion of
the Total Payments will be taken into account which, in the written opinion of
an independent, nationally recognized accounting firm (the “Independent
Advisors”) selected by the Company, does not constitute a “parachute payment”
within the meaning of Section 280G(b)(2) of the Code (including by reason of
Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no
portion of such Total Payments will be taken into account which, in the opinion
of Independent Advisors, constitutes reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in

 

7

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

excess of the “base amount” (as defined in Section 280G(b)(3) of the Code)
allocable to such reasonable compensation; and (iii) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by the Independent Advisors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.

8. RESTRICTIVE COVENANTS.

(a) As a condition of your employment with the Company, you agree that during
the Term and thereafter, you will not directly or indirectly disclose or
appropriate to your own use, or the use of any third party, any trade secret or
confidential information concerning the REIT, the Operating Partnership, the
Employer or their respective subsidiaries or affiliates (collectively, the
“Digital Group”) or their businesses, whether or not developed by you, except as
it is required in connection with your services rendered for the Company. You
further agree that, upon termination of your employment, you will not receive or
remove from the files or offices of the Digital Group any originals or copies of
documents or other materials (physical, electronic or otherwise) of the Digital
Group, and that you will return any such documents or materials (physical,
electronic or otherwise) otherwise in your possession. You further agree that,
upon termination of your employment, you will maintain in strict confidence and
not disclose the projects in which any member of the Digital Group is involved
or contemplating.

(b) You further agree that during the Term, you shall not, unless agreed to in
writing by the Company, engage in Competition (as defined below). For purposes
of this Agreement, “Competition” shall mean acquiring or owning interests in,
directly or indirectly, including as a principal, partner, stockholder or
manager of any partnership, corporation or any other entity, Technology Real
Estate located in the United States, Europe or Asia. “Technology Real Estate”
shall mean commercial real estate buildings that are used principally (i) to
provide infrastructure required by companies in the data, voice and wireless
communications industry; (ii) to provide the physical environment required for
businesses in the disaster recovery, IT outsourcing and collocation industries,
(iii) to provide highly specialized manufacturing environments for manufacturing
of technology products or (iv) as headquarter office facilities for technology
companies (or any combination of the foregoing). Notwithstanding the foregoing,
“Competition” shall not include (x) your activities as an employee, executive,
director, principal, partner, stockholder or manager of the Company or any of
its subsidiaries or affiliates, or (y) investments in which you own less than a
nine and one-half percent (9.5%) beneficial interest and have no active
management role; provided, however, that in the case of investments involving
Technology Real Estate described in clause (iv) above, investments in which you
own more than nine and one-half percent (9.5%) shall be permitted so long as
(A) your aggregate capital invested in the investment is less than $500,000,
(B) you own less than a fifty percent (50%) beneficial interest, and (C) you
have no active management role.

(c) You further agree that during the Term and continuing through the second
(2nd) anniversary of the date of termination of your employment, you will not
directly or indirectly solicit, induce, or encourage (i) any then current
employee of any member of the Digital Group to terminate their employment with
such member of the Digital Group, or (ii) any consultant, agent, customer,
vendor, or other parties doing business with any member of the Digital Group to
terminate their agency, or other relationship with such member of the Digital
Group or to transfer their business from the such member or the Digital Group
and you will not initiate discussion with any such person for any such purpose
or authorize or knowingly cooperate with the taking of any such actions by any
other individual or entity.

 

8

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

(d) In recognition of the facts that irreparable injury will result to the
Company in the event of a breach by you of your obligations under Sections 8(a),
(b) or (c) above, that monetary damages for such breach would not be readily
calculable, and that the Company would not have an adequate remedy at law
therefor, you acknowledge, consent and agree that in the event of such breach,
or the threat thereof, the Company shall be entitled, in addition to any other
legal remedies and damages available, to specific performance thereof and to
temporary and permanent injunctive relief (without the necessity of posting a
bond) to restrain the violation or threatened violation of such obligations by
you.

9. CODE SECTION 409A.

(a) To the extent applicable, this Agreement shall be interpreted and applied
consistent and in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder.
Notwithstanding any provision of this Agreement to the contrary, if at any time
you and the Company mutually determine that any compensation or benefits payable
under this Agreement may not be compliant with or exempt from Section 409A of
the Code and related Department of Treasury guidance, the parties shall work
together to adopt such amendments to this Agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take such other actions, as the parties determine are necessary or
appropriate to (i) exempt such compensation and benefits from Section 409A of
the Code and/or preserve the intended tax treatment of such compensation and
benefits, or (ii) comply with the requirements of Section 409A of the Code and
related Department of Treasury guidance; provided, however, that this
Section 9(a) shall not create any obligation on the part of the Company to adopt
any such amendment, policy or procedure or take any such other action.

(b) To the extent permitted under Section 409A of the Code, any separate payment
or benefit under this Agreement or otherwise shall not be deemed “nonqualified
deferred compensation” subject to Section 409A of the Code and Section 6(f)
hereof to the extent provided in the exceptions in Treasury Regulation
Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception
or provision of Section 409A of the Code.

(c) To the extent that compensation or benefits payable under Section 6 of this
Agreement (i) constitute “nonqualified deferred compensation” within the meaning
of Section 409A of the Code or (ii) are intended to be exempt from Section 409A
of the Code under Treasury Regulation Section 1.409A-1(b)(9)(iii), and are
designated under this Agreement as payable upon (or within a specified time
following) your termination of employment, such compensation or benefits shall,
subject to Section 6(f) hereof, be payable only upon (or, as applicable, within
the specified time following) your “separation from service” from the Company
(within the meaning of Section 409A(a)(2)(A)(i) of the Code).

(d) To the extent that any payments or reimbursements provided to you under this
Agreement, including, without limitation under Section 18 hereof, are deemed to
constitute compensation to which Treasury Regulation Section 1.409A-3(i)(1)(iv)
would apply, such

 

9

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

amounts shall be paid or reimbursed to you reasonably promptly, but not later
than December 31 of the year following the year in which the expense was
incurred. The amount of any such payments eligible for reimbursement in one year
shall not affect the payments or expenses that are eligible for payment or
reimbursement in any other taxable year, and your right to such payments or
reimbursement shall not be subject to liquidation or exchange for any other
benefit.

10. COMPANY RULES AND REGULATIONS. As an employee of the Company, you agree to
abide by Company rules and regulations as set forth in the Company’s Employee
Handbook, Code of Conduct and Business Ethics, Statement of Policies and
Procedures Governing Material Non-Public Information and the Prevention of
Insider Trading and as otherwise promulgated.

11. PAYMENT OF FINANCIAL OBLIGATIONS. In the event that your employment or
consultancy is shared among the Company and/or its subsidiaries and affiliates,
the payment or provision to you by the Company of any remuneration, benefits or
other financial obligations pursuant to this Agreement may be allocated to the
Company and, as applicable, its subsidiaries and/or affiliates in accordance
with an employee sharing or expense allocation agreement entered into by such
parties.

12. WITHHOLDING. The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

13. ARBITRATION. Except as set forth in Section 8(d) above, any disagreement,
dispute, controversy or claim arising out of or relating to this Agreement or
the interpretation of this Agreement or any arrangements relating to this
Agreement or contemplated in this Agreement or the breach, termination or
invalidity thereof shall be settled by final and binding arbitration before a
single neutral arbitrator. Arbitration shall be administered by JAMS in San
Francisco, California in accordance with the then existing JAMS Arbitration
Rules and Procedures for Employment Disputes. Except as provided herein, the
Federal Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or federal law, or both, as
applicable, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.
Judgment upon the award may be entered in any court having jurisdiction thereof.
Each party shall pay his or its own attorneys’ fees and costs of suit associated
with such arbitration to the extent permitted by applicable law, and the Company
shall pay the administrative fees and all arbitrator fees associated with such
arbitration; provided, however, that if you prevail in such arbitration, the
Company shall reimburse you for the reasonable attorneys’ fees actually incurred
by you in connection with such arbitration.

14. ENTIRE AGREEMENT. As of the Effective Date, this Agreement constitutes the
final, complete and exclusive agreement between you and the Company with respect
to the subject matter hereof and replaces and supersedes any and all other
agreements, offers or promises, whether oral or written, made to you by any
member of the Digital Group or any entity, or representative thereof, whose
business or assets any member of the Digital Group

 

10

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

succeeded to in connection with the initial public offering of the REIT’s common
stock or the transactions related thereto (including, without limitation, the
Prior Agreement). You agree that the Prior Agreement and any other such
agreement, offer or promise is hereby terminated and will be of no further force
or effect, and that upon his execution of this Agreement, you will have no right
or interest in or with respect to the Prior Agreement or any other such
agreement, offer or promise. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

15. ASSUMPTION BY SUCCESSOR. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.

16. ACKNOWLEDGEMENT. You hereby acknowledge (a) that you have consulted with or
have had the opportunity to consult with independent counsel of your own choice
concerning this Agreement, and have been advised to do so by the Company, and
(b) that you have read and understand this Agreement, are fully aware of its
legal effect, and have entered into it freely based on your own judgment.

17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to conflicts
of laws principles thereof.

18. LEGAL FEES. The Company shall reimburse you for up to $15,000 in legal fees
actually incurred by you in connection with the negotiation, preparation and
execution of this Agreement on or prior to the Effective Date. Subject to
Section 9(d) above, the Company shall reimburse such legal fees within thirty
(30) days following your delivery to the Company of documentation evidencing
such fees.

[SIGNATURE PAGE FOLLOWS]

 

11

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

Please confirm your agreement to the foregoing by signing and dating the
enclosed duplicate original of this Agreement in the space provided below for
your signature and returning it to Ellen Jacobs. Please retain one
fully-executed original for your files.

Sincerely,

 

Digital Realty Trust, Inc.,

a Maryland corporation

   

DLR LLC,

a Maryland limited liability company

By:  

/s/ Robert H. Zerbst

    By:   Digital Realty Trust, L.P. Name:  

Robert H. Zerbst

    Its:   Managing Member Title:  

Director

            By:   Digital Realty Trust, Inc.       Its:   General Partner      
By:  

/s/ Robert H. Zerbst

      Name  

Robert H. Zerbst

      Title:  

Director

Digital Realty Trust, L.P.,

a Maryland limited partnership

     

By:

  Digital Realty Trust, Inc.      

Its

 

General Partner

     

By:

 

/s/ Robert H. Zerbst

     

Name:

 

Robert H. Zerbst

     

Title:

 

Director

     

Accepted and Agreed,

     

By:

 

/s/ A. William Stein

        A. William Stein      

 

12