As of December 31, 2020, the Operating Partnership had four classes of limited partnership units outstanding: Series A Preferred Units, Series B Convertible Preferred Units, Class A units of limited partnership interest (“Class A units”) and Class O LTIP units of limited partnership units (“Class O units”). The Class A units currently outstanding are now redeemable on a one-for-one exchange rate at any time for cash or shares of Class A common stock of QTS. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class O units are pari passu with Class A units. Each Class O unit is convertible into Class A units by the Operating Partnership at any time or by the holder at any time based on formulas contained in the partnership agreement.

In connection with its IPO, QTS issued Class A common stock and Class B common stock. Class B common stock entitles the holder to 50 votes per share and was issued to enable our Chief Executive Officer to exchange 2% of his Operating Partnership units so he may have a vote proportionate to his economic interest in the Company. Also in connection with its IPO, QTS adopted the QTS Realty Trust, Inc. 2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares of Class A common stock to be issued under the 2013 Equity Incentive Plan, including options to purchase Class A common stock if exercised. On May 4, 2015, following approval by our stockholders at our 2015 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 3.0 million shares. On May 9, 2019, following approval by our stockholders at our 2019 Annual Meeting of Stockholders, the total number of shares available for issuance under the 2013 Equity Incentive Plan was increased by an additional 1.1 million to 5.9 million.

a.Performance-Based FFO Unit Awards — performance-based restricted share unit awards, which may be earned based on Operating Funds From Operations (“OFFO”) per diluted share measured over a two-year performance period (performance-based FFO units or “FFO Units”), with two-thirds of the earned FFO Units vesting and settling in shares of Class A common stock on the date that performance is certified following the end of the performance period and the remaining one-third of the FFO Units vesting and settling at the end of three years from the award grant date. The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on actual performance over the performance period, with the number of shares to be determined based on a linear interpolation basis between threshold and target and target and maximum performance.

b.Performance-Based Relative TSR Unit Awards — performance-based restricted share unit awards, which may be earned based on total stockholder return (“TSR”) as compared to the MSCI U.S. REIT Index (the “Index”) over a three-year performance period (the performance-based relative TSR units or “TSR Units”). The number of shares of Class A common stock subject to the awards that can be earned ranges from 0% to 200% of the target award based on our TSR compared to the Index. In addition, award payouts will be determined on a linear interpolation basis between threshold and target and target and maximum performance; and will be capped at the target performance level if our TSR is negative.


	2010 Equity Incentive Plan					2013 Equity Incentive Plan
	Numbers of Class O units	Weighted average exercise price		Weighted average fair value		Options	Weighted average exercise price		Weighted average fair value		Restricted Stock / Deferred Stock	Weighted average fair value at grant date		TSR Units	Weighted average fair value at grant date		FFO Units	Weighted average fair value at grant date
Outstanding at January 1, 2018	568,040	$	23.52	$	5.00	1,369,270	$	38.18	$	7.80	381,864	$	46.37	—	$	—	—	$	—
Granted	—	—		—		674,081	34.05		5.63		348,152	35.27		—	—		—	—
Exercised/Vested (1)	(465,761)	23.40		4.76		(6,188)	21.50		3.68		(224,660)	46.23		—	—		—	—
Cancelled/Expired	—	—		—		—	—		—		(85,047)	43.50		—	—		—	—
Outstanding at December 31, 2018	102,279	$	24.05	$	5.67	2,037,163	$	36.86	$	7.10	420,309	$	37.83	—	$	—	—	$	—
Granted	—	—		—		135,594	42.27		7.62		274,564	42.25		86,089	54.64		86,089	42.01
Exercised/Vested (1)	(19,969)	20.25		4.42		(125,213)	30.80		6.21		(279,429)	39.20		—	—		—	—
Cancelled/Expired	—	—		—		(112,706)	45.86		9.43		(25,694)	42.17		(1,739)	54.64		(1,739)	42.01
Outstanding at December 31, 2019	82,310	$	24.97	$	5.97	1,934,838	$	37.11	$	7.05	389,750	$	39.67	84,350	$	54.64	84,350	$	42.01
Granted	—	—		—		99,872	56.84		9.35		302,591	57.47		84,202	79.18		84,202	56.84
Performance Adjustment (2)	—	—		—		—	—		—		—	—		—	—		59,844	42.01
Exercised/Vested (1)	(6,875)	25.00		4.49		(98,303)	28.84		5.18		(264,466)	39.89		—	—		(96,129)	42.01
Cancelled/Expired	—	—		—		—	—		—		(11,379)	49.38		—	—		—	—
Outstanding at December 31, 2020	75,435	$	25.00	$	6.11	1,936,407	$	38.55	$	7.26	416,496	$	52.20	168,552	$	66.90	132,267	$	51.45

(1)Represents (i) Class O units which were converted to Class A units, (ii) options to purchase Class A common stock which were exercised, and (iii) the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock, with respect to the applicable column.

The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the years ended December 31, 2020, 2019 and 2018 are included in the following table on a per unit basis. Options to purchase shares of Class A common stock were valued using the Black-Scholes model and TSR Units were valued using a Monte-Carlo simulation that leveraged similar assumptions to those used to value the Class A common stock and FFO Units.


	2020			2019			2018
Fair value of FFO units and restricted stock granted	$56.84	-	$65.96	$42.01	-	$51.25	$34.03	-	$54.01
Fair value of TSR units granted			$79.18			$54.64			N/A
Fair value of options granted			$9.35	$7.56	-	$8.28	$5.55	-	$5.64
Expected term (years)			5.5			5.5	5.5	-	6.0
Expected volatility			27%			28%			28%
Expected dividend yield			3.31 %	3.89%	-	4.19%			4.82%
Expected risk-free interest rates			0.61 %	2.33 %	-	2.56 %	2.69 %	-	2.73 %


	QTS Realty Trust, Inc. Awards Outstanding
	Exercise prices				Awards outstanding	Weight average remaining vesting period (years)
Restricted stock	$	—			416,496	1.0
TSR units	—				168,552	0.9
FFO units	—				132,267	0.7
Options to purchase Class A common stock	$	21.00	-	$56.84	1,936,407	0.9
Total QTS Realty Trust, Inc. awards outstanding					2,653,722

Any awards outstanding as of the end of the period have been valued as of the grant date and generally vest ratably over a defined service period. As of December 31, 2020 all restricted Class A common stock, TSR units, and FFO units outstanding were unvested and approximately 0.1 million options to purchase Class A common stock were outstanding and unvested. As of December 31, 2020 we had $26.5 million of unrecognized equity-based compensation expense which will be recognized over a remaining weighted-average vesting period of approximately 0.9 years. The total intrinsic value of Class O units and options to purchase Class A common stock outstanding at December 31, 2020 was $48.3 million.


Year Ended December 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 18, 2020	October 6, 2020	$	0.47	$	32.0
June 19, 2020	July 7, 2020	0.47		31.5
March 20, 2020	April 7, 2020	0.47		31.5
December 20, 2019	January 7, 2020	0.44		28.6
				$	123.6

Series A Preferred Stock
September 30, 2020	October 15, 2020	$	0.45	$	1.9
June 30, 2020	July 15, 2020	0.45		1.9
March 31, 2020	April 15, 2020	0.45		1.9
December 31, 2019	January 15, 2020	0.45		1.9
				$	7.6

Series B Preferred Stock
September 30, 2020	October 15, 2020	$	1.63	$	5.1
June 30, 2020	July 15, 2020	1.63		5.1
March 31, 2020	April 15, 2020	1.63		5.1
December 31, 2019	January 15, 2020	1.63		5.1
				$	20.4


Year Ended December 31, 2019
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock
September 19, 2019	October 4, 2019	$	0.44	$	27.3
June 25, 2019	July 9, 2019	0.44		27.3
March 20, 2019	April 4, 2019	0.44		27.3
December 21, 2018	January 8, 2019	0.41		23.7
				$	105.6

Series A Preferred Stock
September 30, 2019	October 15, 2019	$	0.45	$	1.9
June 30, 2019	July 15, 2019	0.45		1.9
March 31, 2019	April 15, 2019	0.45		1.9
December 31, 2018	January 15, 2019	0.45		1.9
				$	7.6

Series B Preferred Stock
September 30, 2019	October 15, 2019	$	1.63	$	5.1
June 30, 2019	July 15, 2019	1.63		5.1
March 31, 2019	April 15, 2019	1.63		5.1
December 31, 2018	January 15, 2019	1.63		5.1
				$	20.4

In February 2019, we conducted an underwritten offering of 7,762,500 shares of our Class A common stock, $0.01 par value per share (the “Class A common stock”) consisting of 4,000,000 shares issued during the first quarter of 2019 and 3,762,500 shares which were issued on a forward basis. During the year ended December 31, 2019 we settled a portion of the 3,762,500 shares subject to the forward sales agreements, and during the year ended December 31, 2020 we settled the remaining shares subject to the forward sale agreements as shown in the table below.

In June 2019, we established an “at-the-market” equity offering program (the “Prior ATM Program”) pursuant to which we could issue, from time to time, up to $400 million of our Class A common stock, $0.01 par value per share (the “Class A common stock”), which could include shares to be sold on a forward basis. The use of forward sales under the Prior ATM Program generally allowed us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

In May 2020, we established a new “at-the-market” equity offering program (the “Current ATM Program”) pursuant to which we may issue, from time to time, up to $500 million of our Class A common stock, which may include shares to be sold on a forward basis. As under the Prior ATM Program, the use of forward sales under the Current ATM Program generally allows us to lock in a price on the sale of shares of our Class A common stock when sold by the forward sellers, but defer receiving the net proceeds from such sales until the shares of our Class A common stock are issued at settlement on a later date. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.

At any time during the term of any forward sale under the Prior ATM Program or the Current ATM Program we may settle the forward sale by physical delivery of shares of Class A common stock to the forward purchasers or, at our election, cash settle or net share settle. The initial forward sale price per share under each forward sale equals the product of (x) an amount equal to 100% minus the applicable forward selling commission and (y) the volume weighted average price per share at which the borrowed shares of our common stock were sold pursuant to the equity distribution agreement by the relevant forward seller during the applicable forward hedge selling period for such shares to hedge the relevant forward purchaser’s exposure under such forward sale. Thereafter, the forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor equal to the specified daily rate less a spread, and is decreased based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. If the specified daily rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the applicable forward sale price.

During the year ended December 31, 2020, we received $286.3 million of net proceeds from the settlement of forward shares as noted in the table below. We expect to physically settle (by delivering shares of Class A common stock) the remaining forward sales under the Prior ATM Program and Current ATM Program prior to the first anniversary date of each respective transaction. In addition, during the year ended December 31, 2020, we utilized the forward provisions under the Prior ATM Program and the Current ATM Program to allow for the sale of additional shares of our common stock as noted in the table below.

In June 2020, we conducted an underwritten offering of 4,400,000 shares of common stock offered on a forward basis at a price of $64.90 per share representing available net proceeds upon physical settlement of approximately $266.9 million as of December 31, 2020. We expect to physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds, subject to certain adjustments, from the sale of those shares of common stock by June 30, 2021, although we have the right to elect settlement prior to that time. We have concluded that the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. The initial forward sale price is subject to daily adjustment based on a floating interest rate factor equal to the specified daily rate less a spread, and will decrease based on specified amounts related to dividends on shares of our common stock during the term of the applicable forward sale. Our earnings per share dilution resulting from the forward sale agreements, if any, is determined using the two-class method.


Offering Program	Forward Shares Sold/(Settled)		Net Proceeds Available/(Received) (1)
Shares and net proceeds available as of December 31, 2019	3,795		$	173,776	(2)
February 2019 Offering - Settlement	(931)	(3)	(35,841)
June 2019 Prior ATM Program - Sales	4,550		243,577
June 2019 Prior ATM Program - Settlements	(4,981)	(3)	(250,496)
May 2020 Current ATM Program - Sales	3,128		189,640
June 2020 Offering - Sales	4,400		266,894
Shares and net proceeds available as of December 31, 2020	9,961		$	587,550

On March 15, 2018, QTS issued 4,280,000 shares of 7.125% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) with a liquidation preference of $25.00 per share, which included 280,000 shares of the underwriters’ partial exercise of their option to purchase additional shares. In connection with the issuance of the Series A Preferred Stock, on March 15, 2018 the Operating Partnership issued to the Company 4,280,000 Series A Preferred Units, which have economic terms that are substantially similar to the Company’s Series A Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series A Preferred Stock to the Operating Partnership.

Dividends on the Series A Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to common stock and pari passu with the Series B Preferred Stock with respect to the payment of distributions and other amounts. Except in instances relating to preservation of QTS’ qualification as a REIT or pursuant to the Company’s special optional redemption right, the Series A Preferred Stock is not redeemable prior to March 15, 2023. On and after March 15, 2023, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, the Company has a special optional redemption right that enables it to redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, within 120 days after the first date on which a change of control has occurred resulting in neither QTS nor the surviving entity having a class of common shares listed on the NYSE, NYSE Amex, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption.

Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s Series A Preferred Stock into a number of shares of Class A common stock, par value $0.01 per share, equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price; and

On June 25, 2018, QTS issued 3,162,500 shares of 6.50% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) with a liquidation preference of $100.00 per share, which included 412,500 shares the underwriters purchased pursuant to the exercise of their overallotment option in full. In connection with the issuance of the Series B Preferred Stock, on June 25, 2018 the Operating Partnership issued to the Company 3,162,500 Series B Preferred Units, which have economic terms that are substantially similar to the Company’s Series B Preferred Stock. The Series B Preferred Units were issued in exchange for the Company’s contribution of the net offering proceeds of the offering of the Series B Preferred Stock to the Operating Partnership.

Dividends on the Series B Preferred Stock are payable quarterly in arrears on or about the 15th day of each January, April, July and October. The Series B Preferred Stock is convertible by holders into shares of Class A common stock at any time at the then-prevailing conversion rate. The conversion rate as of December 31, 2020 is 2.1404 shares of the Company’s Class A common stock per share of Series B Preferred Stock. The Series B Preferred Stock does not have a stated maturity date. Upon liquidation, dissolution or winding up, the Series B Preferred Stock will rank senior to common stock and pari passu with the Series A Preferred Stock with respect to the payment of distributions and other amounts. The Series B Preferred Stock is not

redeemable by the Company. At any time on or after July 20, 2023, the Company may at its option cause all (but not less than all) outstanding shares of the Series B Preferred Stock to be automatically converted into the Company’s Class A common stock at the then-prevailing conversion rate if the closing sale price of the Company’s Class A common stock is equal to or exceeds 150% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days, including the last trading day of such 30-day period, ending on the trading day prior to the issuance of a press release announcing the mandatory conversion.

If a holder converts its shares of Series B Preferred Stock at any time beginning at the opening of business on the trading day immediately following the effective date of a fundamental change (as described in the prospectus supplement) and ending at the close of business on the 30th trading day immediately following such effective date, the holder will automatically receive a number of shares of the Company’s Class A common stock equal to the greater of:

•the sum of (i) a number of shares of the Company’s Class A common stock, as may be adjusted, as described in the Articles Supplementary for the 6.50% Series B Cumulative Convertible Perpetual Preferred Stock filed with the State Department of Assessments and Taxation of Maryland on June 22, 2018 (the “Articles Supplementary”) and (ii) the make-whole premium described in the Articles Supplementary; and

In June 2015, we established the QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2015 Plan”) to give eligible employees the opportunity to purchase, through payroll deductions, shares of our Class A common stock in the open market by an independent broker with the Company paying brokerage commissions and fees associated with such share purchases. The 2015 Plan became effective July 1, 2015. We reserved 250,000 shares of our Class A common stock for purchase under the 2015 Plan, which were registered pursuant to a registration statement on Form S-8 filed on June 17, 2015.

On May 4, 2017, our stockholders approved the 2017 Amended and Restated QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “2017 Plan”). The 2017 Plan became effective July 1, 2017 and is administered by the compensation committee (the “Compensation Committee”) of the board of directors (or by a committee of one or more persons appointed by it or the board of directors). The 2017 Plan permits participants to purchase our Class A common stock at a discount of up to 10% (as determined by the Compensation Committee). Employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who perform at least thirty hours of service per week for our Company are eligible to participate in the 2017 Plan, excluding any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or who is a Section 16 officer. Under the 2017 Plan, there are four purchase periods per year, and participants may deduct a minimum of $20 per paycheck and a maximum of $1,000 per paycheck towards the purchase of shares. Shares purchased under the 2017 Plan are subject to a one-year holding period following the purchase date, during which they may not be sold or transferred. We reserved 239,989 shares of our Class A common stock, subject to certain adjustments, for purchase under the 2017 Plan, which were registered pursuant to a registration statement on Form S-8 originally filed on June 17, 2015 and amended on June 30, 2017.

Effective February 1, 2020, the 2017 Plan was further amended and restated to, among other things, provide that employees of our Company and our majority-owned subsidiaries who have been employed for at least thirty days and who are regular full-time employees are eligible to participate in the 2017 Plan, excluding temporary or part-time employees and interns, any employee who, at any time during which the payroll deductions are made on behalf of the participating employees to purchase stock, owns shares representing five percent or more of the total combined voting power or value of all classes of shares of our Company, or any employee who is a Section 16 officer. In addition, such amendment and restatement provides that the $1,000 per paycheck limit on each participant’s purchase of shares assumes 24 pay periods per year and will be adjusted to the extent a participant is paid on a more frequent or infrequent basis.