8-KLeadership ChangesOther Events

DIGITAL REALTY TRUST, INC. 8-K Report, Executive Changes (Apr 11, 2012)

Filed April 11, 2012For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) filed an 8-K on April 10, 2012, reporting two key events. Firstly, the resignation of Senior Vice President of Sales, Brent Behrman, effective April 20, 2012, with the sales team reporting directly to the CEO in the interim. Secondly, and more significantly for investors, the company announced its intention to convert all outstanding shares of its 4.375% Series C Cumulative Convertible Preferred Stock into common stock. This conversion, set to be effective on April 17, 2012, will result in approximately 5.1 million shares of Series C Preferred Stock converting into common stock at a rate of 0.5480 shares of common stock per $25.00 liquidation preference. Fractional shares will be settled in cash based on the common stock's closing price on April 16, 2012. Holders will not receive accrued dividends from March 30, 2012, through the conversion date.

Key Highlights

  • 1Resignation of Brent Behrman, Senior Vice President, Sales, effective April 20, 2012.
  • 2Interim reporting structure for the sales team directly to the CEO, Michael F. Foust.
  • 3Notice of Conversion issued for all outstanding 4.375% Series C Cumulative Convertible Preferred Stock.
  • 4Conversion to be effective on April 17, 2012.
  • 5Conversion rate: 0.5480 shares of common stock per $25.00 liquidation preference of Series C Preferred Stock.
  • 6Approximately 5,126,214 shares of Series C Preferred Stock outstanding as of April 6, 2012.
  • 7Fractional shares will be paid in cash based on the common stock's closing price on April 16, 2012.
  • 8Holders of Series C Preferred Stock will not receive dividends accrued from March 30, 2012, through the conversion date.

Frequently Asked Questions

The primary financial event is the company's decision to convert all outstanding shares of its 4.375% Series C Cumulative Convertible Preferred Stock into shares of common stock. This conversion is scheduled to be effective on April 17, 2012.

The conversion rate is 0.5480 shares of Digital Realty Trust's common stock for every $25.00 liquidation preference of Series C Preferred Stock.

Fractional shares will not be issued. Instead, holders will receive cash payment equal to the value of the fractional interest, calculated using the closing sale price per share of Digital Realty Trust's common stock on the New York Stock Exchange on April 16, 2012.

No, holders of Series C Preferred Stock will not receive any portion of the dividend that would have accrued from March 30, 2012 (the last dividend payment date) through the conversion date of April 17, 2012.