UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 6, 2018
QTS Realty Trust, Inc.
QualityTech, LP
(Exact name of registrant as specified in its charter)
Maryland (QTS Realty Trust, Inc.) |
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001-36109 |
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46-2809094 |
(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
12851 Foster Street |
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66213 |
(Address of principal executive offices) |
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(Zip Code) |
(913) 814-9988
Registrants telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 6, 2018, QTS Realty Trust, Inc. (the Company), QualityTech, LP (the Operating Partnership) and Quality Technology Services, LLC (Employer) entered into an amendment (the Amendment) to the employment agreement with William Schafer, the Companys Executive Vice President Finance and Accounting, dated February 16, 2017 and that became effective on April 3, 2017 (the Employment Agreement). Among other things, the Amendment provides for a base salary of $350,000, which may be adjusted upon annual review, and a bonus opportunity targeted at 100% of base salary based on factors and criteria, including the financial performance of the Company and the performance by Mr. Schafer of his duties under the Employment Agreement, as determined in the sole discretion of the Company. Previously, the Employment Agreement provided for a base salary of not less than $350,000, subject to review by the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) no less than annually and which could not be decreased, and a bonus targeted at 100% of base salary for threshold performance, with additional amounts paid for exceptional performance as determined by the Compensation Committee. The Amendment further provides that Mr. Schafer will be eligible to receive grants of equity awards, as determined by the Company, subject to three-year time-based vesting but may be subject to performance-based vesting, with a target award value of 100% of his base salary. Previously, the Employment Agreement provided that such awards had a target value of 200% of base salary.
Under the Amendment, Mr. Schafer waived his right of termination for Good Reason under the Employment Agreement related to any changes contained in the Amendment or any prior modifications or actions by the Company prior to the signing of the Amendment. In addition, a notice for termination for Good Reason must be given within 45 days of the event, if such event cannot be cured, instead of 152 days as previously provided in the Employment Agreement.
The Amendment continues to provide for a one-year term, expiring April 3rd of each year, unless either party gives a non-renewal notice, but such notice must be given at least 30 days prior to the expiration of the term, rather than 90 days prior thereto, as previously provided in the Employment Agreement.
Except as set forth in the Amendment, all other terms of the Employment Agreement shall remain in full force and effect.
The foregoing description of the Amendment does not purport to be complete, and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The following exhibits are filed as part of this report:
Exhibit |
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Exhibit Description |
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10.1 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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QTS Realty Trust, Inc. | |
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DATE: August 10, 2018 |
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/s/ Shirley E. Goza |
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Shirley E. Goza |
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Secretary, Vice President and General Counsel |
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QualityTech, LP | |
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By: QTS Realty Trust, Inc., | |
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its general partner | |
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DATE: August 10, 2018 |
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/s/ Shirley E. Goza |
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Shirley E. Goza |
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Secretary, Vice President and General Counsel |
AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT
(WILLIAM H. SCHAFER)
THIS AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT is entered into on August 6, 2018, by and among QTS Realty Trust, Inc., a Maryland corporation (together with any successor general partner of the Operating Partnership, the Company), QualityTech, LP, a Delaware limited partnership (the Operating Partnership), Quality Technology Services, LLC, a Delaware limited liability company and an affiliate of the Operating Partnership (the Employer), and William H. Schafer, an individual (Executive), with respect to the following facts and circumstances:
WHEREAS, the Company, the Operating Partnership, the Employer, and Executive entered into an Employment Agreement dated February 16, 2017 (Agreement); and
WHEREAS, the Board of Directors of the Company moved Executive from the position of Chief Financial Officer (CFO) to the position of Executive Vice President Finance and Accounting (EVP Finance and Accounting), effective on April 3, 2017; and
WHEREAS, the Agreement was amended on June 23, 2017, June 5, 2018 and June 29, 2018;
WHEREAS, the parties desire to engage in this Amendment No. 4 to modify the Agreement;
NOW, THEREFORE, the Parties hereby amend the Agreement as follows so as to reflect their mutual understanding in place as of the Effective Date of the Agreement, as defined therein:
1. Article 1 of the Agreement shall be amended as follows:
1.2 Term. The period of employment of the Executive by Employer shall commence upon the Effective Date and, subject to earlier termination as provided in this Agreement, continue thereafter for a one (1)-year term (the Term); provided, that the Term shall automatically renew for additional one (1) year periods thereafter unless either Employer or Executive gives notice of non-renewal at least thirty (30) days prior to expiration of the Term (as it may have been extended by any renewal period).
2. Article 2 of the Agreement shall be amended as follows:
2.1 Salary. In consideration for Executives services hereunder, Employer shall pay Executive an annual salary at the rate of $350,000 per year (Base Pay) during each of
the years of the Term, payable in accordance with Employers regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). Executives salary may be adjusted upon annual review.
2.2 Bonus. In addition to Base Pay, if the Executive achieves certain corporate and individual objectives as established by the Company, then the Employer shall pay to the Executive bonus compensation (Bonus), not later than 90 days following the end of the fiscal year. Employers award of bonus compensation to the Executive shall be determined by the factors and criteria, including the financial performance of the Company and the performance by the Executive of his duties hereunder, as determined in the sole discretion of the Company, that may be established from time to time for the calculation of bonus awards by the Company. Annual bonuses will be targeted at 100% of Base Pay.
2.3 Equity Award. Equity awards may be made pursuant to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan, or any successor equity incentive plan adopted by the Company or the QTS Companies, in accordance with the Companys policies and as deemed appropriate by Company (the Equity Awards). The Equity Awards will be targeted at an award value of 100% of Base Pay, to be awarded depending on factors and criteria established from time to time by the Company and which may be above or below target depending on factors and criteria established from time to time by the Company, which may include the financial performance of the Company and the performance by the Executive of his duties hereunder, as determined in the sole discretion of the Company. These Equity Awards typically will be subject to a three (3)-year vesting schedule (33% one-year vesting following grant and 8.375% vesting per quarter following the first year); however, a performance-based component may be included with a different vesting schedule. Additional equity awards may be made in accordance with the Companys policies and as deemed appropriate by the Company.
3. Article 4 of the Agreement shall be amended as follows:
4.1.3 Good Reason. Executive may terminate his employment under this Agreement by giving written notice to Employer upon the occurrence of any one or more of the following events (which, for purposes of this Agreement, shall constitute Good Reason):
(a) a material diminution in Executives authority, duties or responsibilities, or any significant adverse change in Executives title as EVP Finance and Accounting of the Company, the Operating Partnership and Employer;
(b) Executives place of employment is moved more than fifty (50) miles from the Companys current location in Overland Park, Kansas;
(c) a material diminution in Executives Base Pay, as in effect from time to time; or
(d) a material breach by Employer or the Company of any term of this Agreement.
It shall be a condition precedent to Executives right to terminate his employment for Good Reason that (a) he shall have first given the Board written notice stating with reasonable specificity the act(s) on which such termination is premised within forty-five (45) days after Executive becomes aware of such act(s), (b) if such act(s) is susceptible of cure or remedy, it has not been cured or remedied within thirty (30) days after receipt of such notice, and Executive has terminated his employment within twelve (12) months after the occurrence of the event giving rise to Good Reason.
4. Executive waives his right of termination for Good Reason under the Agreement related to any changes contained in this Amendment No. 4 or any modifications or actions by Company prior to the signing of this Amendment No. 4.
5. Except as otherwise specifically set forth herein, the provisions of the Agreement shall continue in full force and effect in accordance with their terms.
6. Defined terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Employment Agreement to be duly executed and delivered as of the date first above written.
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COMPANY | ||
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QTS REALTY TRUST, INC. | ||
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By: |
/s/ Chad L. Williams | |
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Name: |
Chad L. Williams | |
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Title: |
Chief Executive Officer | |
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OPERATING PARTNERSHIP | ||
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QUALITYTECH, LP | ||
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By: |
QTS REALTY TRUST, INC., | |
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General Partner | |
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By: |
/s/ Chad L. Williams |
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Name: Chad L. Williams |
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Title: Chief Executive Officer |
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EMPLOYER | ||
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QUALITY TECHNOLOGY SERVICES, LLC | ||
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By: |
/s/ Chad L. Williams | |
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Name: |
Chad L. Williams | |
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Title: |
Chief Executive Officer | |
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EXECUTIVE | ||
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/s/ William H. Schafer | ||
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WILLIAM H. SCHAFER |