(a) The consummation of a transaction, approved by the shareholders of the Trust, tomerge the Trust into or consolidate the Trust with another entity, sell or otherwise disposeof all or substantially all of its assets or adopt a plan of liquidation, provided, however,that a Change in Control shall not be deemed to have occurred by reason of a transaction, ora substantially concurrent or otherwise related series of transactions, upon the completionof which 50% or more of the beneficial ownership of the voting power of the Trust, thesurviving corporation or corporation directly or indirectly controlling the Trust or thesurviving corporation, as the case may be, is held by the same persons (as defined below)(although not necessarily in the same proportion) as held the beneficial ownership of thevoting power of the Trust immediately prior to the transaction or the substantiallyconcurrent or otherwise related series of transactions, except that upon the completionthereof, employees or employee benefit plans of the Trust may be a new holder of suchbeneficial ownership.     (b) The “beneficial ownership” (as defined in Rule 13d-3 under the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) of securities representing 50% or more of thecombined voting power of the Trust is acquired, other than from the Trust, by any “person”as defined in Sections 13(d) and 14(d) of the Exchange Act (other than any trustee or otherfiduciary holding securities under an employee benefit or other similar stock plan of theTrust).     (c) At any time during any period of two consecutive years, individuals who at thebeginning of such period were members of the Board of Trustees of the Trust cease for anyreason to constitute at least a majority thereof (unless the election, or the nomination forelection by the Trust’s shareholders, of each new trustee was approved by a vote of at leasttwo-thirds of the trustees still in office at the time of such election or nomination whowere trustees at the beginning of such period).For purposes of this Agreement, the following terms shall be defined as indicated:     (i) The term “Beneficial Owner” shall mean beneficial owner as defined in Rule13d-3 under the Exchange Act.     (ii) Entities shall be treated as being under “common control” during anyperiod in which they are “affiliates” of each other as that term is defined in theExchange Act.     (iii) The term “person” shall be as defined in Sections 13(d) and 14(d) of theExchange Act, but shall exclude any trustee or other fiduciary holding securitiesunder an employee benefit or other similar stock plan of the Trust.     4. Compensation During the Employment Period. During the Employment Period, theExecutive shall be compensated as follows:
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     (a) He shall receive an annual salary which is not less than his annual salaryimmediately prior to the Employment Period, payable in accordance with the normal payrollpractices of the Trust.     (b) He shall be entitled to participate in annual cash-based incentive compensationplans which, in the aggregate, provide bonus opportunities which are not materially lessfavorable to the Executive than the greater of (i) the opportunities provided by the Trustfor executives with comparable levels of responsibility as in effect from time to time; and(ii) the opportunities provided to the Executive under all such plans in which he wasparticipating prior to the Employment Period, which bonuses shall be paid in accordance withthe terms of the applicable bonus arrangement.     (c) He shall be eligible to participate in other incentive compensation plans and otheremployee benefit plans on a basis not materially less favorable to the Executive than thatapplicable to other executives of the Trust with comparable levels of responsibility as ineffect from time to time.     5. Termination. For purposes of this Agreement, the term “Termination” shall meantermination of the employment of the Executive by the Trust during the Employment Period (I) by theTrust, for any reason other than death, Disability, or Cause, or (II) by Constructive Discharge ofthe Executive (as these terms are described below). For purposes of this Agreement:     (a) The Executive shall be considered to have a “Disability” during the period in whichhe is unable, by reason of a medically determinable physical or mental impairment, to engagein the material and substantial duties of his regular occupation, and such condition isexpected to be permanent, as determined by the Chief Executive Officer of the Trust.     (b) For purposes of this Agreement, “Cause” shall mean, in the reasonable judgment ofthe Chief Executive Officer of the Trust (i) the willful and continued failure by theExecutive to substantially perform his duties with the Trust or any subsidiary after writtennotification by the Trust or subsidiary, (ii) the willful engaging by the Executive inconduct which is demonstrably injurious to the Trust or any subsidiary, monetarily orotherwise, or (iii) the engaging by the Executive in egregious misconduct involving seriousmoral turpitude. For purposes hereof, no act, or failure to act, on the Executive’s partshall be deemed “willful” unless done, or omitted to be done, by the Executive not in goodfaith and without reasonable belief that such action was in the best interest of the Trustand its subsidiaries.     (c) The Executive shall be considered to have a “Constructive Discharge” if:     (i) after a Change in Control and within 90 days after the Executive hasknowledge of circumstances constituting Good Reason (as
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     defined below), the Executive provides written notice to the Trust which noticeshall specifically identify the circumstances which the Executive believesconstitute Good Reason;     (ii) within 30 days following receipt of the notice from the Executive, theTrust fails to cure such circumstances or fails to notify the Executive of theTrust’s intended method of correction and the timing thereof; and     (iii) the Executive resigns within 90 days after the expiration of the cureperiod or the timing specified in the Trust’s response to the Executive.For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s expresswritten consent (and except in consequence of a prior termination of the Executive’semployment), the occurrence of any of the following circumstances which occur during theEmployment Period:     (I) a substantial adverse alteration in the nature of the Executive’s status orresponsibilities from those in effect immediately prior to the Employment Period;     (II) a material failure to provide salary and other compensation and benefitsin accordance with paragraph 4; or     (III) the Trust’s material breach of this Agreement.If the Executive becomes employed by the entity into which the Trust merged, or the purchaser ofsubstantially all of the assets of the Trust, or a successor to such entity or purchaser, theExecutive shall not be treated as having terminated employment for purposes of this Agreement untilsuch time as the Executive terminates employment with the merged entity or purchaser (orsuccessor), as applicable. If the Executive is transferred to employment with a subsidiary of theTrust (regardless of whether before, on, or after a Change in Control), such transfer shall notconstitute a Termination for purposes of this Agreement     6. Severance Benefits. Subject to the provisions of paragraphs 7 and 8 below, in theevent of a Termination described in paragraph 5, in lieu of the amount otherwise payable underparagraph 4:     (a) The Executive shall be entitled to the bonus(es) payable for the performanceperiod(s) in which the date of the Executive’s Termination occurs, with payment based onachievement of a target level of performance for the entire period (regardless of actualperformance for the period); provided, however, that the amount of the bonus shall besubject to a pro-rata reduction to reflect the portion of the applicable performance periodfollowing the date of
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Termination. Payment under this subparagraph 6(a) shall be made at the regularlyscheduled time for payment of such amounts to active employees.     (b) As of the date of Termination, the Executive shall be fully vested in all benefitsaccrued through the date of Termination under the ProLogis Nonqualified Savings Plan (the“NSP”) and all such benefits shall be payable in accordance with the NSP.     (c) Any awards granted under the ProLogis 1997 Long Term Incentive Plan, the ProLogis2006 Long Term Incentive Plan or under any other incentive, compensation or other plan thatare held by the Executive on the date of Termination shall vest and shall be exercisable orpayable in accordance with their terms.     (d) The Executive shall continue to receive medical insurance and life insurancecoverage in accordance with subparagraph 4(c) above for a period of period of 12 monthsafter the date of Termination To the extent such coverage is taxable to the Executive, suchbenefits shall be provided each month during the continuation period. If such benefits arerequired to be suspended in accordance with paragraph 20 during the six month periodfollowing the Executive’s Termination, the Executive shall pay to the Trust the applicablepremiums required to continue such benefits and the Trust shall pay to the Executive as ofthe first date permitted under paragraph 20 the accumulated amount of such premiums thatwere not otherwise required of the Executive to continue such coverages during theapplicable 6 month suspension period.     (e) Subject to the terms and conditions of this Agreement, the Executive shall beentitled to a lump sum payment in cash no later than 10 business days after the date ofTermination equal to the sum of:     (i) an amount equal to one times the Executive’s annual salary rate in effectimmediately prior to the Employment Period; and     (ii) an amount equal to one times the Executive’s target level of the annualbonus for the fiscal year in which the date of Termination occurs.     (f) The Trust shall, for a period not to exceed twelve months after the date ofTermination, provide for standard outplacement services by any one qualified outplacementagency selected by the Trust.Except as may be otherwise specifically provided in an amendment of this paragraph 6 adopted inaccordance with paragraph 15, the Executive’s rights under this paragraph 6 shall be in lieu of anybenefits with respect to a Termination following a Change in Control that may be otherwise payableto or on behalf of the Executive pursuant to the terms of any severance pay arrangement of theTrust or any subsidiary or any other, similar arrangement of the Trust or any subsidiary providingbenefits upon involuntary termination of employment. Notwithstanding the foregoing provisions ofthis paragraph
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6 or any other provision of the Agreement to the contrary, with respect to any amounts that aresubject to section 409A of the Code, this paragraph 6 shall be interpreted and administered inaccordance with section 409A of the Code and shall not result in an offset or substitution of anyamount in violation of section 409A of the Code.     7. Tax Limitations. The following shall apply with respect to amounts to or on behalfof the Executive:     (a) If any payment or benefit to which the Executive is entitled from the Trust, anyaffiliate, or trusts established by the Trust or by any affiliate (the “Payments,” whichshall include, without limitation, the vesting of an option or other non-cash benefit orproperty) are more likely than not to result in a loss of a deduction to the Trust by reasonof section 280G of the Internal Revenue Code of 1986 or any successor provision to thatsection, the Payments shall be reduced to the extent required to avoid such loss ofdeduction.     (b) If reductions are required in the Executive’s Payments in accordance withsubparagraph 7(a) above, the reduction shall first be made by reducing payments and orbenefits that are not subject to section 409A of the Code (as elected by the Executive) and,if further reduction is necessary, from non-cash payments or benefits (as determined by theCompany) and finally from cash payments. Upon request of the Executive, the Trust shallprovide the Executive with sufficient tax and compensation data to enable the Executive orhis tax advisor to independently make the calculations described in this paragraph 7 and theTrust shall reimburse the Executive for reasonable fees and expenses incurred for any suchverification.     (c) If the Executive gives written notice to the Trust of any objection to the resultsof the Trust’s calculations under this paragraph 7 within 60 days of the Executive’s receiptof written notice thereof, the dispute shall be referred for determination to tax counselselected by the independent auditors of the Trust (“Tax Counsel”). The Trust shall pay allfees and expenses of such Tax Counsel. Pending such determination by Tax Counsel, thedetermination by the Trust shall be binding on all parties. To the extent the Tax Counseldetermines that this paragraph 7, and the reductions required under this paragraph 7, areinapplicable, the Trust shall pay the Executive any additional amount determined by TaxCounsel to be due under this paragraph 7 (together with interest thereon at a rate equal to120% of the short-term applicable federal rate determined under section 1274(d) of the Code)within 10 days after such determination but in no event later than the date which is 2-1/2months following the calendar year in which the Change in Control occurs.     8. Withholding. All payments to the Executive under this Agreement will be subject toall applicable withholding of state and federal taxes.     9. Arbitration of All Disputes. Any controversy or claim arising out of or relatingto this Agreement or the breach thereof shall be settled by arbitration in Denver,
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Colorado, in accordance with the laws of the State of Colorado, by three arbitrators appointedby the parties. If the parties cannot agree on the appointment of the arbitrators, one shall beappointed by the Trust and one by the Executive and the third shall be appointed by the first twoarbitrators. If the first two arbitrators cannot agree on the appointment of a third arbitrator,then the third arbitrator shall be appointed by the Chief Judge of the United States Court ofAppeals for the Tenth Circuit. The arbitration shall be conducted in accordance with the rules ofthe American Arbitration Association, except with respect to the selection of arbitrators whichshall be as provided in this paragraph 9. Judgment upon the award rendered by the arbitrators maybe entered in any court having jurisdiction thereof.     10. Legal and Enforcement Costs. This paragraph 10 shall apply if it becomesnecessary or desirable for the Executive to retain legal counsel or incur other costs and expensesin connection with either enforcing any and all of his rights under this Agreement or defendingagainst any allegations of breach of this Agreement by the Trust:     (a) The Executive shall be entitled to recover from the Trust reasonable attorneys’fees, costs and expenses incurred by him in connection with such enforcement or defense.     (b) Payments required under this paragraph 10 shall be made by the Trust to theExecutive (or directly to the Executive’s attorney) promptly following submission to theTrust of appropriate documentation evidencing the incurrence of such attorneys’ fees, costs,and expenses.     (c) The Executive shall be entitled to select his legal counsel; provided, however,that such right of selection shall not affect the requirement that any costs and expensesreimbursable under this paragraph 10 be reasonable.     (d) The Executive’s rights to payments under this paragraph 10 shall not be affected bythe final outcome of any dispute with the Trust; provided, however, that to the extent thatthe arbitrators shall determine that under the circumstances recovery by the Executive ofall or a part of any such fees and costs and expenses would be unjust or inappropriate, theExecutive shall not be entitled to such recovery; and to the extent that such amount havebeen recovered by the Executive previously, the Executive shall repay such amounts to theTrust.     11. Mitigation and Set-Off. The Executive shall not be required to mitigate theamount of any payment provided for in this Agreement by seeking other employment or otherwise. TheTrust shall not be entitled to set off against the amounts payable to the Executive under thisAgreement any amounts owed to the Trust by the Executive, any amounts earned by the Executive inother employment after termination of his employment with the Trust, or any amounts which mighthave been earned by the Executive in other employment had he sought such other employment.
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     12. Notices. Notices and all other communications provided for in this Agreementshall be in writing and shall be delivered personally or sent by registered or certified mail,return receipt requested, postage prepaid (provided that international mail shall be sent viaovernight or two-day delivery), or sent by facsimile or prepaid overnight courier to the parties atthe addresses set forth below (or such other addresses as shall be specified by the parties by likenotice). Such notices, demands, claims and other communications shall be deemed given:     (a) in the case of delivery by overnight service with guaranteed next day delivery, thenext day or the day designated for delivery;     (b) in the case of certified or registered U.S. mail, five days after deposit in theU.S. mail; or     (c) in the case of facsimile, the date upon which the transmitting party receivedconfirmation of receipt by facsimile, telephone or otherwise;provided, however, that in no event shall any such communications be deemed to be given later thanthe date they are actually received. Communications that are to be delivered by the U.S. mail orby overnight service or two-day delivery service to the Executive shall be to the last address hehas filed in writing with the Trust, and such deliveries to the Trust shall be to the followingaddress:ProLogis