Exhibit 10.45

DIGITAL REALTY TRUST, INC.

560 MISSION STREET, STE. 2900

SAN FRANCISCO, CA 94105

December 24, 2008

Scott E. Peterson

c/o Digital Realty Trust, Inc.

560 Mission Street, Suite 2900

San Francisco, California 94105

 

  Re: EMPLOYMENT TERMS

Dear Scott:

Digital Realty Trust, Inc. (the “REIT”) and DLR, LLC (the “Employer”) and
together with the REIT, the “Company”) are pleased to offer 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 the date hereof (the
“Effective Date”). This Agreement amends and restates in its entirety that
certain employment letter agreement (the “Original Agreement”), dated July 30,
2004, between you, the REIT and Digital Realty, L.P. (the “Operating
Partnership”).

1. POSITION, DUTIES AND RESPONSIBILITIES. As of the Effective Date, the Company
will employ you, and you agree to be employed by the Company, as Senior Vice
President, Acquisitions of the REIT and the Employer. In the capacity of Senior
Vice President, Acquisitions, you will have such duties and responsibilities as
are normally associated with such position and will devote your full business
time and attention 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 Chief Executive Officer of the REIT or the Employer, as
applicable, 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.

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

2. BASE COMPENSATION. During your employment with the Company, the Company will
pay you a base salary of $250,000 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 base salary may
be subject to increase pursuant to the Company’s policies as in effect from time
to time.

3. ANNUAL BONUS. In addition to the base salary set forth above, during your
employment with the Company, you will be eligible to participate in the
Company’s incentive bonus plan applicable to similarly situated employees 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 50%
and 75%, respectively, of your base salary actually paid 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).

4. BENEFITS AND VACATION. During your employment with the Company, 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 employees of the
Company, subject to the terms and conditions thereof. During such employment,
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 employees of the Company, subject to the terms and conditions of the
applicable Company plans or policies.

5. COMPENSATION GROSS-UP. The amount of compensation payable to you pursuant to
Sections 2 and 3 above will be “grossed up” as necessary (on an after-tax basis)
to compensate for any duplicate social security withholding taxes due as a
result of your shared employment by the Employer, the REIT and, if applicable,
any subsidiary and/or affiliate thereof; provided however, that no such gross-up
will be made to the extent you will be entitled to a refund of any such amounts.
If any amounts become payable to you pursuant to this Section 5, then such
amounts shall be paid to you promptly following the remittance of such taxes to
the appropriate taxing authority, but in no event later than the end of the
calendar year following that in which any such remittance is made.

6. AT-WILL EMPLOYMENT. Your employment with the Company is “at-will,” and either
you or the Company may terminate your employment for any reason whatsoever (or
for no reason) by giving 30 days prior written notice of such termination to the
other party. This at-will employment relationship cannot be changed except in a
writing signed by you and an authorized representative of the Company.

 

2

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

7. TERMINATION OF EMPLOYMENT.

(a) Without Cause. Subject to Section 7(e) below, in the event that you incur a
“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”), and Treasury Regulation Section 1.409A-1(h)) (a “Separation from
Service”) by reason of a termination of your employment hereunder by the Company
without Cause (as defined below), then, subject to Section 7(d) below, in
addition to any other accrued amounts payable to you through the date of
termination of your employment, the Company will pay you within 60 days after
the date of your Separation from Service (such date, the “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 50% of the sum of (x) your
annual base salary as in effect on the Termination Date plus (y) your target
annual bonus for the fiscal year in which the Termination Date occurs.

(b) Change in Control.

(i) Subject to Section 7(e) below, in the event that a “Change in Control” (as
defined in the First Amended and Restated Digital Realty Trust, Inc., Digital
Services, Inc. and Digital Realty Trust, L.P. 2004 Incentive Award Plan, as
amended from time to time, or any successor incentive plan) occurs during your
employment with the Company and, on the date of or within one year after such
Change in Control, you incur a Separation from Service by reason of a
termination of employment by the Company without Cause (as defined below), then,
subject to Section 7(d) below, in lieu of the severance payment set forth in
Section 7(a) above, the Company will pay and provide you with the following
payments and benefits in addition to any other accrued amounts payable to you
through the date of termination of your employment:

(A) payable within 60 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) your annual base salary as in
effect on the Termination Date plus (y) the greater of (i) your target annual
bonus for the fiscal year in which the Termination Date occurs or (ii) the
annual bonus paid or payable to you by the Company for the fiscal year
immediately preceding the fiscal year in which the Termination Date occurs; and

(B) to the extent that any outstanding Company stock options or other
equity-based awards issued to you under the Company’s equity incentive plans
(other than any Class C profits interest units of the Operating Partnership) 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.

(ii) Subject to Section 7(e) below, in the event that you incur a Separation
from Service by reason of a termination of your employment hereunder by the
Company without Cause (as defined below) within the six-month period immediately
preceding a Change in Control in connection with such Change in Control, then,
subject to Section 7(d) below, in addition to the severance payment set forth in
Section 7(a) above, the Company will pay and provide you with the following
payments and benefits:

(A) payable upon the earlier to occur of (i) the six month anniversary of your
Termination Date or (ii) if such Change in Control constitutes a “change in
control event” (within the meaning of Section 409A(a)(2)(A)(v) of the Code, and
Treasury Regulation Section 1.409A-3(i)(5)), then the date on which such Change
in Control occurs, a lump-sum severance payment in an amount equal to the excess
of the amount of severance payable pursuant to Section 7(b)(i)(A) over the
amount of severance payable pursuant to Section 7(a); and

 

3

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

(B) to the extent that any outstanding Company stock options or other
equity-based awards issued to you under the Company’s equity incentive plans
(other than any Class C profits interest units of the Operating Partnership) are
subject to vesting based on continued employment or the lapse of time, such
awards shall become vested and exercisable immediately prior to the date of the
Change in Control.

Notwithstanding the foregoing, the vesting of any awards that are subject to
vesting based on the satisfaction of performance goals, including, without
limitation, Class C 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. For purposes of clarification, the
terms set forth in this Agreement, including this Section 7, are intended to be
in addition to (and not in lieu of) the vesting and acceleration features
related to Company stock options and other equity-based awards (including Class
C 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.

(c) Death or Disability. In no event shall you or your estate or beneficiaries
be entitled to any payments or benefits set forth in this Section 7 upon any
termination of your employment by reason of your total and permanent disability
or your death.

(d) 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 7, shall be paid to
you during the 6-month period following your Separation from Service 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 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 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

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

(e) Release. Your right to receive the payments and benefits set forth in this
Section 7 is conditioned on and subject to your execution within 21 days (or, to
the extent required by applicable law, 45 days) following the Termination Date
and non-revocation within 7 days thereafter of a general release of claims
against the Digital Group (as defined below), in a form reasonably acceptable to
the Company.

(f) Definition of Cause. For purposes of this Agreement, “Cause” will be
determined in the reasonable discretion of the Company, and will include,
without limitation, the following: (i) willful and gross misconduct by you which
materially injures the general reputation of any member of the Digital Group or
interferes with contracts or operations of any member of the Digital Group;
(ii) your conviction of, or entry of a guilty or no contest plea to, a felony or
any crime involving moral turpitude; (iii) fraud, misrepresentation, or breach
of trust by you in the course of your employment which adversely affects any
member of the Digital Group; (iv) 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; (v) a material breach of your
covenants set forth in Section 8 below; or (vi) a material breach by you of any
of your obligations under this Agreement.

8. CONFIDENTIALITY AND NON-SOLICITATION.

(a) As a condition of your employment with the Company, you agree that during
the term of such employment 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 maintained
in the ordinary course of business of the Digital Group, and that you will
return any such documents or materials otherwise in your possession. You further
agree that, upon termination of your employment, you will maintain in strict
confidence the projects in which any member of the Digital Group is involved or
contemplating.

(b) You further agree that during the term of such employment and for six months
after your employment is terminated, you will not directly or indirectly
solicit, induce, or encourage any employee, consultant, agent, customer, vendor,
or other parties doing business with any member of the Digital Group to
terminate their employment, agency, or other relationship with the Digital Group
or such member or to render services for or transfer their business from the
Digital Group or such member 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.

(c) 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)
and (b) above, that monetary damages for such breach would not be readily
calculable, and that the Company

 

5

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

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
the Company determines that any compensation or benefits payable under this
Agreement may not be either exempt from or compliant with Section 409A of the
Code and related Department of Treasury guidance, the Company may adopt such
amendments to this Agreement 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 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 an 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 7(d)
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 7 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 7(d) hereof, be payable only upon (or, as applicable, within
the specified time following) your Separation from Service.

(d) To the extent that any payments or reimbursements provided to you under this
Agreement are deemed to constitute compensation to which Treasury Regulation
Section 1.409A-3(i)(1)(iv) would apply, such 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.

 

6

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

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 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(c) 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
administered by JAMS/Endispute in San Francisco, California in accordance with
the then existing JAMS/Endispute 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 expenses associated with such arbitration to the
extent permitted by applicable law; provided, however, that if you prevail in
such arbitration, the Company shall reimburse you for the fees and expenses
actually incurred by you in connection with such arbitration (including, without
limitation, your reasonable attorneys’ fees).

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 succeeded to in connection
with the initial public offering of the REIT’s common stock or the transactions
related thereto. You agree that any 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 any 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.

 

7

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

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.

[SIGNATURE PAGE FOLLOWS]

 

8

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

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.,     DLR, LLC, a Maryland corporation     a Maryland
limited liability company       By: Digital Realty, L.P. By:  

/s/ Michael F. Foust

    Its: Managing Member Name:   Michael F. Foust       Title:   Chief Executive
Officer             By:  

/s/ Michael F. Foust

      Name:   Michael F. Foust       Title:   Chief Executive Officer Accepted
and Agreed,       this 24th day of December, 2008.       By:  

/s/ Scott E. Peterson

        Scott E. Peterson      

 

9