As of March 31, 2021, 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 initial public offering on October 13, 2013 ("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”), pursuant to which the Company may issue shares of Class A common stock pursuant to various types of awards. As of March 31, 2021, 5.9 million shares of Class A common stock were authorized and available for issuance under the 2013 Equity Incentive Plan. On March 4, 2021, the Board of Directors approved an amendment and restatement of the 2013 Equity Incentive Plan, to among other things, increase the number of shares available for issuance under the plan by an additional 2.0 million shares, which amendment is expected to be approved at our 2021 Annual Meeting of Stockholders on May 4, 2021.

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.

c.Restricted Stock Awards — the restricted stock awards vest as to 33% of the shares subject to awards on the first anniversary of the date of grant and as to 8.375% of the shares subject to the awards each quarter-end thereafter, subject to the named executive officer’s continued service as an employee as of each vesting date.


	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 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
Granted	—	—		—		96,366	59.06		10.53		270,464	59.07		105,402	64.72		105,402	59.06
Exercised/Vested (1)	—	—		—		(51,220)	38.63		7.91		(123,438)	54.57		—	—		—	—
Cancelled/Expired	—	—		—		—	—		—		(3,716)	57.24		—	—		—	—
Outstanding at March 31, 2021	75,435	$	25.00	$	6.11	1,981,553	$	39.55	$	7.40	559,806	$	54.96	273,954	$	66.06	237,669	$	54.82

(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 three months ended March 31, 2021 are included in the following table on a per unit basis (unaudited). 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.


	Three Months Ended March 31, 2021
Fair value of FFO units and restricted stock granted	$	59.06		-	$	61.17
Fair value of TSR units granted					$	64.72
Fair value of options granted	$	3.79		-	$	11.36
Expected term (years)	0.4			-	5.5
Expected volatility	28		%	-	31		%
Expected dividend yield	3.39						%
Expected risk-free interest rates	0.06		%	-	0.90		%


	QTS Realty Trust, Inc. Awards Outstanding
	Exercise prices					Awards outstanding	Weight average remaining vesting period (years)
Restricted stock	$	—				559,806	1.1
TSR units	—					273,954	1.1
FFO units	—					237,669	0.8
Options to purchase Class A common stock	$	21.00	-	$	59.06	1,981,553	0.9
Total QTS Realty Trust, Inc. awards outstanding						3,052,982

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 March 31, 2021, 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 March 31, 2021, we had $51.4 million of unrecognized equity-based compensation expense which will be recognized over a remaining weighted-average vesting period of approximately 1 year. The total intrinsic value of Class O units and options to purchase Class A common stock outstanding at March 31, 2021 was $47.5 million.


Three Months Ended March 31, 2021
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock

December 22, 2020	January 7, 2021	$	0.47	$	33.4
				$	33.4

Series A Preferred Stock

December 31, 2020	January 15, 2021	$	0.45	$	1.9
				$	1.9

Series B Preferred Stock

December 31, 2020	January 15, 2021	$	1.63	$	5.1
				$	5.1


Three Months Ended March 31, 2020
Record Date	Payment Date	Per Share Rate		Aggregate Dividend/Distribution Amount (in millions)
Common Stock

December 20, 2019	January 7, 2020	$	0.44	$	28.6
				$	28.6

Series A Preferred Stock

December 31, 2019	January 15, 2020	$	0.45	$	1.9
				$	1.9

Series B Preferred Stock

December 31, 2019	January 15, 2020	$	1.63	$	5.1
				$	5.1

Class A Common Stock

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. During the three months ended March 31, 2021, we settled the remaining shares subject to the forward sale agreements.

Because we had utilized substantially all of the offering capacity of the Prior ATM Program, 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 expect to physically settle (by delivering shares of common stock) the forward sales under the Current ATM Program prior to the first anniversary date of each respective transaction. 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.

In June 2020, we conducted an underwritten offering of 4,400,000 shares of our common stock on a forward basis. During the three months ended March 31, 2021 we settled a portion of the 4,400,000 shares subject to the forward sales agreements. We expect to physically settle the remaining 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. 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, 2020	9,961		$	581,598	(2)
Forward Equity - Sales	1,504		91,620
Forward Equity - Settlements	(3,865)	(3)	(215,964)
Shares and net proceeds available as of March 31, 2021	7,600		$	457,254

(2)Proceeds available reported in the Form 10-K for the period ended December 31, 2020 were $587.6 million. The $6 million decrease is primarily due to QTS’ declared dividends, which reduces cash expected to be received upon full physical settlement of the forward shares.

As of March 31, 2021, we had outstanding 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 as well as 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. Dividends on the Series A Preferred Stock and Series B 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. 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. Under certain conditions, upon the occurrence of a change of control, we may redeem the Series A Preferred Stock in whole, at any time, or in part, from time to time within 120 days after the occurrence of such event and the holders will have the right to convert their Series A Preferred Stock to Class A common stock in accordance with the terms of the Series A Preferred Stock.

The Series B Preferred Stock does not have a stated maturity date. 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 March 31, 2021 is 2.1436 shares of the Company’s Class A common stock per share of Series B Preferred Stock. 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.