Partners' Capital and Incentive Compensation Plans

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Partners' Capital and Incentive Compensation Plans

9. Partners’ Capital and Incentive Compensation Plans

The General Partner has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership.

As of September 30, 2013, the Company had five classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A units”), Class C units of limited partnership interest (“Class C units”), Class D units of limited partnership interest (“Class D units”), Class RS units and Class O units. Class C units and Class D Units were converted to Class A units on a one-for-one basis in accordance with their terms immediately prior to the consummation of the initial public offering of QTS.

The Class A Units are redeemable at fair value at any time on or after one year following the later of the beginning of the first full calendar month following the first date on which the common shares of the General Partner (or its successor general partner) are publicly traded or the date of initial issuance of the units. The General Partner may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares.

Class RS units or Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan. Class RS units and Class O units may be subject to vesting and are pari passu with Class A units. Vested Class RS units and Class O units are convertible into Class A units based on formulas contained in the Partnership Agreement.

As of September 30, 2013, the Company sponsored the QualityTech, LP 2010 Equity Incentive Plan for its employees. Awards generally vest over a defined service period. For the nine months ended September 30, 2013, 224,244 awards were granted, 45,531 Class O units were forfeited and 3,750 Class RS units were converted to Class A units.

The following table summarizes information about awards outstanding as of September 30, 2013.

	Awards Outstanding
	Exercise prices		Awards outstanding		Weighted remaining contractual life (years)
RS units	$	—		175,000		3
O units	$	20-25		1,648,075		3
Total				1,823,075

All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on an accelerated basis based upon the Company meeting various performance goals. As of September 30, 2013 nonvested awards outstanding were 1.3 million and 0.1 million for the Class O units and Class RS units, respectively. The number of Class O units outstanding were not included in the Statements of Changes in Partners’ (Deficit) Capital.

On August 14, 2013, the Company made a distribution to its partners in an aggregate amount of $7.7 million.

Following the completion of the IPO, the Company may issue Class RS units or Class O units pursuant to the QTS Realty Trust, Inc. 2013 Equity Incentive Plan.