(b) The Executive shall report to the Board. The Executive agrees that he shall perform hisduties faithfully and efficiently and to the best of his abilities, subject to the directions ofthe Board. The Executive’s duties may include providing services for both the Company and theSubsidiaries (as defined below), as determined by the Board; provided, that the Executive shallnot, without his consent, be assigned tasks that would be inconsistent with those of a chiefexecutive officer of a comparable company to the Company. The Executive shall have such authority,power, responsibilities and duties as are inherent in his positions (and the undertakingsapplicable to his positions) and necessary to carry out his responsibilities and the dutiesrequired of him hereunder.          (c) Notwithstanding the foregoing provisions of this paragraph 2, during the Agreement Term,the Executive may devote reasonable time to the supervision of his personal investments andactivities involving professional, charitable, community, educational, religious and similar typesof organizations, speaking engagements, membership on the boards of directors of otherorganizations, and similar types of activities, to the extent that such other activities do not, inthe judgment of the Board, interfere with the performance of the Executive’s duties under thisAgreement, violate the terms of any of the covenants contained in paragraph 8 or 9 hereof orotherwise conflict in any material way with the business of the Company or any Subsidiary;provided, however, that the Executive shall not serve on the board of any business, or hold anyother position with any business, without the prior consent of a majority of the nonemployeemembers of the Board.          (d) For purposes of this Agreement, the term “Subsidiary” shall mean any corporation,partnership, joint venture or other entity during any period in which at least a fifty percent(50%) interest in such entity is owned, directly or indirectly, by the Company (or a successor tothe Company).     3. Compensation. Subject to the terms of this Agreement, during the Agreement Term,while the Executive is employed by the Company, the Company shall compensate him for his servicesas follows:          (a) For the portion of the Agreement Term commencing on the Effective Date and ending onDecember 31, 2008, the Executive shall receive a base salary at the annual rate of $630,000 (the“Salary”). Effective for each 12-consecutive month period of the Agreement Term commencing onJanuary 1, 2009 and ending on each anniversary thereof, the Executive’s annual rate of Salary shallbe equal to $1,000,000. The Executive’s Salary shall be payable in installments in the same manneras salary is paid to other corporate-level senior managers of the Company.          (b) For calendar year 2008, the Executive shall receive a bonus equal to $840,000, payable atthe same time as bonuses are paid to other corporate-level senior managers of the Company. For thecalendar year commencing on January 1, 2009, the Executive may receive an annual bonus that has atarget equal to 200% of his Salary (the “Target Bonus”) and that shall be not less than zero andnot more than 200% of the Target Bonus; provided, however, that the actual amount of the annualbonus earned by and payable to the Executive in any year shall be determined upon the satisfactionof goals and objectives established by the Committee and communicated to the Executive, and shallbe subject to such other terms and conditions of
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the Company’s annual bonus plan as in effect from time to time, including the right of theCommittee, in its discretion, to reduce the amount of the annual bonus following the end of theyear in which such annual bonus shall have been earned. Such bonuses shall be paid at the sametime as bonuses are paid to other corporate-level senior managers of the Company. The corporatefinancial goals and objectives established for the Executive shall be the corporate financial goalsand objectives established for other corporate-level senior managers of the Company in terms ofmeasurement and definition. Any additional operating, strategic or other goals and objectivesestablished for the Executive shall be as determined by the Committee and communicated to theExecutive not later than the time that the corporate financial goals and objectives arecommunicated to the Executive.          (c) Special LTIP Award. On November 11, 2008, the Executive was awarded stock optionsand restricted stock units under the Company’s 2006 Long-Term Incentive Plan (the “LTIP”). Suchawards (the “Special LTIP Awards”) will vest as 25% of the applicable grant on each of December 31,2008, 2009, 2010 and 2011, respectively, provided that vesting for each 25% of the grant shall beconditioned upon the Executive’s continuous employment by the Company through the vesting dateapplicable to the 25% of the grant in question (or as otherwise provided in this Agreement). Inall other respects, such awards shall be subject to the standard terms and conditions as apply tothe grants of such awards made under the LTIP and shall be evidenced by an appropriate grantagreement.          (d) Incentive Awards.          (i) During each calendar year of the Agreement Term (that is, for 2009, 2010 and 2011),the Executive shall be granted equity-based awards under the LTIP, as amended from time totime (or a successor plan thereto) and/or a cash incentive award (such annual award, whetherin the form of equity-based awards, cash or a combination thereof, being referred to hereinas the “Incentive Award”), having an annual aggregate value (as determined under generallyaccepted accounting principles consistently applied by the Company to Incentive Awards tosenior executives granted at such time) of $7,500,000, in such form(s) as determined by theCommittee but consistent with the forms of Incentive Awards granted to other seniorexecutives of the Company and consistent with the proportion of each type of Incentive Awardgranted to other senior executives of the Company; provided, however, that for calendar year2008, the Executive’s Incentive Award shall be an amount having an aggregate value (asdetermined under generally accepted accounting principles consistently applied by theCompany to awards to senior executives granted at that time) of $3,500,000. To the extentapplicable, each stock option granted pursuant to this clause 3(d)(i) shall have a term of10 years from its date of grant. Except as otherwise expressly provided in thissubparagraph 3(d), the date on which the grants of the Incentive Awards pursuant to thisclause 3(d)(i) shall occur and the terms and conditions applicable to such Incentive Awardsshall be determined by the Committee in its discretion, provided that the Incentive Awardsmade pursuant to this clause 3(d)(i) shall be made at the same time and, except as otherwiseexpressly provided in this subparagraph 3(d), shall have the same terms as annual IncentiveAwards granted to other senior executives of the Company (or if not granted to other seniorexecutives, such awards shall be granted to the Executive at least annually, based on theterms applicable under the last such type awards granted to
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them) and that the first such grant for 2008 shall be made not later than the timeIncentive Awards are made for other senior executives of the Company. For the avoidance ofdoubt, the Executive shall be entitled to an Incentive Award for 2011 if he remainscontinuously employed by the Company through 2011, even though such Incentive Award may bemade after the Agreement Term expires; provided, however, that, with respect to theIncentive Award for 2011, the Company, in its discretion, may determine (1) the form of theaward (e.g., cash, equity-based or a combination thereof) without regard to the form ofIncentive Awards granted to other senior executives of the Company and (2) the timing of theaward as long as it is made no later than the time at which the Incentive Awards for 2011are made for other senior executives of the Company.          (ii) Any provision of clause 3(d)(i) to the contrary notwithstanding, each equity-basedaward Incentive Award that is granted to the Executive under the LTIP (or a successorthereto) on or after the Effective Date and the Special LTIP Awards (collectively, the “NewIncentive Awards”) shall provide as of the date on which such New Incentive Award isgranted:          (1) If the Date of Termination (as defined in subparagraph 4(h)) occurs duringthe Agreement Term as the result of (A) termination by the Company without Cause (asdefined in subparagraph 4(c)), (B) by Constructive Discharge (as defined insubparagraph 4(d)), or (C) due to the Executive’s death or Disability (as defined insubparagraph 4(b)), or if the Agreement Term expires on December 31, 2011 and theExecutive’s Date of Termination does not occur prior such date, any New IncentiveAward that is not then vested or exercisable shall continue to vest in accordancewith its terms as though the Executive had remained an employee of the Company untilsuch New Incentive Award is fully vested.          (2) If the Date of Termination occurs during the Agreement Term for any reasonother than as specified in subclause 3(d)(ii)(1), any portion of the New IncentiveAwards that are not vested or exercisable as of the Date of Termination shall beforfeited as of the Date of Termination and the Executive shall have no furtherrights under or with respect thereto.          (3) To the extent applicable and to the extent vested, each New Incentive Awardshall remain exercisable through the expiration date thereof, which shall be definedas the ten year anniversary of the date of grant, unless the Date of Terminationoccurs pursuant to subclause 3(d)(ii)(1) in which case the Expiration Date shall bethat defined the LTIP (or a successor thereto) or the applicable award agreementevidencing the New Incentive Award, as applicable.          (4) Notwithstanding the foregoing provisions of this paragraph 3(d), if, withinone year following the Date of Termination, the Executive breaches the provisions ofparagraph 8 or subparagraphs 9(a) or 9(b), any New Incentive Awards that are notvested upon the date of such breach shall be
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forfeited and the Executive shall have no further rights under or with respectthereto.          (iii) Any provision of clause 3(d)(i) to the contrary notwithstanding, eachequity-based award that has been granted to the Executive under the LTIP (or the ProLogis1997 Long-Term Incentive Plan (the “1997 Plan”)) prior to the Effective Date and that isoutstanding on the Effective Date other than the Special LTIP Awards (collectively, the“Existing Incentive Awards”) shall provide (or shall be amended to provide) as follows as ofthe Effective Date:          (1) If the Date of Termination occurs during the Agreement Term as the resultof (A) termination by the Company without Cause , (B) by Constructive Discharge, or(C) due to the Executive’s death or Disability, or if Executive remains continuouslyemployed by the Company through December 31, 2009, any Existing Incentive Award thatis not then vested or exercisable shall continue to vest in accordance with itsterms as though the Executive had remained an employee of the Company until suchExisting Incentive Award is fully vested.          (2) If the Date of Termination occurs prior to December 31, 2009 for any reasonother than as specified in subclause 3(d)(iii)(1), any portion of the ExistingIncentive Awards that are not vested or exercisable as of the Date of Terminationshall be forfeited as of the Date of Termination and the Executive shall have nofurther rights under or with respect thereto.          (3) To the extent applicable and to the extent vested, each Existing IncentiveAward shall remain exercisable through the expiration date thereof, which shall bedefined as the ten year anniversary of the date of grant, unless the Date ofTermination occurs pursuant to subclause 3(d)(iii)(1) in which case the ExpirationDate shall be that defined in the 1997 Plan, the LTIP or the applicable awardagreement evidencing the Existing Incentive Award, as applicable.          (4) Notwithstanding the foregoing provisions of this paragraph 3(d), if, withinthe one year period beginning on the earlier of the Date of Termination or December31, 2009 the Executive breaches the provisions of paragraph 8 or subparagraphs 9(a)or 9(b), any Existing Incentive Awards that are not vested upon the date of suchbreach shall be forfeited and the Executive shall have no further rights under orwith respect thereto.          (iv) Except as otherwise specifically provided to the contrary in clause 3(d)(i)(relating to Incentive Awards for calendar year 2011), in no event shall the Executive beentitled to any awards pursuant to this subparagraph 3(d) if his Date of Termination hasoccurred prior to the date on which the awards are made under the LTIP for the applicablecalendar year. Nothing in this clause 3(d)(iv) shall affect the Executive’s rights underparagraph 5.
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          (e) Except as otherwise specifically provided to the contrary in this Agreement, the Executiveshall be eligible to participate in the Company’s employee benefit plans, programs, policies andarrangements to the same extent and on the same terms as those benefits are provided by the Companyfrom time to time to the Company’s other similarly situated senior management employees whoseprincipal residence and Company workplace is in the United States.          (f) In the event that the Company materially restates or otherwise materially modifies any ofits financial statements, the Company and the Executive shall submit to arbitration, pursuant toparagraph 24 hereof, the question of whether and in what amount, if any, compensation previouslypaid to the Executive based upon the satisfaction of goals and objectives established by theCommittee pursuant to this paragraph 3 exceeded the amount of compensation that would have beenpaid to the Executive based upon the extent to which such goals and objectives actually had beensatisfied, as determined based upon the restated or modified financial statements (such excessbeing referred to herein as the “Excess Compensation”). If it is determined pursuant to sucharbitration proceeding that the Executive was paid Excess Compensation, the Executive shall pay tothe Company a cash amount equal to the Excess Compensation within 30 days following the Executive’sreceipt of notice of such determination. If the Executive fails to pay such cash amount to theCompany within such 30-day period, the Company shall be entitled, in its discretion, (i) to set offthe amount of the Excess Compensation against amounts of compensation payable, or to becomepayable, to the Executive by the Company, (ii) cause the Executive to forfeit stock options grantedby the Company and held by the Executive having an aggregate intrinsic value (i.e., the Fair MarketValue of one Share as of the date of determination, minus the stock option exercise price) equal tothe amount of the Excess Compensation, (iii) cause the Executive to forfeit any Shares acquired bythe Executive (after tax withholding therefrom) upon the vesting of any awards granted by theCompany having an aggregate Fair Market Value on the date of such forfeiture (after tax withholdingtherefrom) equal to the amount of the Excess Compensation or (iv) take any combination of theactions described in the foregoing clauses (i), (ii) and (iii). Notwithstanding the foregoing, inno event shall any such offset be applied to any compensation otherwise payable to the Executivethat is subject to section 409A of the Code.          (g) The Executive is authorized to incur reasonable expenses for entertainment, travel, meals,lodging and similar items in promoting the Company’s business. The Company will reimburse theExecutive for reasonable expenses so incurred in accordance with the normal practices of theCompany.          (h) The Company shall pay the Executive’s professional fees incurred to negotiate thisAgreement in an amount not to exceed $100,000. The Executive shall submit a copy of the statementfor such professional services to the Company on or before February 28, 2009, and the Company shallmake such payment not later than 30 days following the date on which the Company receives the copyof such statement.          (i) Within twelve (12) months after the time the Executive receives any portion of the$7,500,000 Incentive Award described in subparagraph 3(d) above (if paid in cash) or after the timeany such Incentive Award vests (in the case of equity-based awards), the Executive shall contribute15% of the value of such Incentive Award (determined as of the time
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of payment, in the case of cash awards, and at the time an award vests and is paid, in thecase of an equity-based award) to The ProLogis Foundation.     4. Termination. The Executive’s employment with the Company during the Agreement Termmay be terminated by the Company or the Executive without any breach of this Agreement only underthe circumstances described in subparagraphs 4(a) through 4(f):          (a) Death. The Executive’s employment hereunder will terminate upon his death.          (b) Disability. The Company may terminate the Executive’s employment during anyperiod in which he is Disabled. The Executive shall be considered “Disabled” or to have a“Disability” during any period in which he is, by reason of a medically determinable physical ormental impairment, entitled to receive cash benefits (after completion of any applicable waitingperiod) under the Company’s long-term disability benefit plan as in effect from time to time forthe Executive.          (c) Cause. The Company may terminate the Executive’s employment hereunder at any timefor Cause. For purposes of this Agreement, the term “Cause” shall mean in the reasonable judgmentof the Board (i) the willful and continued failure by the Executive to substantially perform hisduties with the Company or any Subsidiary which failure is not corrected within 30 days afterwritten notification by the Company or Subsidiary, (ii) the willful engaging by the Executive inconduct which is demonstrably injurious to the Company or any Subsidiary, monetarily or otherwise,or (iii) the engaging by the Executive in egregious misconduct involving serious moral turpitude.For purposes hereof, no act, or failure to act, on the Executive’s part shall be deemed “willful”if done, or omitted to be done, by the Executive in good faith or with a reasonable belief thatsuch action was in the best interest of the Company or Subsidiary.          (d) Constructive Discharge. If (x) the Executive provides written notice to theCompany of the occurrence of Good Reason (as defined below) within 90 days after the Executivefirst has knowledge of the circumstances constituting Good Reason, which notice shall specificallyidentify the circumstances which the Executive believes constitute Good Reason; (y) the Companyfails to correct the circumstances constituting “Good Reason” within 30 days after such notice; and(z) the Executive resigns within six months after the initial existence of such circumstances; thenthe Executive shall be considered to have been subject to a Constructive Discharge by the Company.For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s express writtenconsent (and except in consequence of a prior termination of the Executive’s employment), theoccurrence of any of the following circumstances:          (i) The assignment of any duties to the Executive that are materially inconsistent withhis position and status as Chief Executive Officer of the Company.          (ii) A material reduction by the Company in the Executive’s Salary or Target Bonuspercentage to an amount that is less than that required under subparagraph 3(a) or 3(b), or,for periods prior to January 1, 2009, a material reduction in the 2008
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Bonus, as the case may be, provided that the Committee’s exercise of its discretion toreduce the dollar amount of the annual bonus in accordance with subparagraph 3(b) hereofshall not constitute Good Reason.          (iii) Upon or within 24 months following a Change in Control, relocation of theExecutive’s base office to an office that is more than 30 highway miles from the Executive’sbase office on the day immediately preceding the date of the Change in Control;          (iv) Failure of the Company to obtain a satisfactory agreement from any successor toassume and agree to perform this Agreement.          (v) Upon or within 24 months following a Change in Control, either (A) the Executive isnot the chief executive officer of the publicly-traded entity resulting from such Change inControl or of the publicly-traded parent of such entity, in either case reporting directlyto the board of directors of such publicly-traded entity or such publicly-traded parent, or(B) there is no publicly-traded entity resulting from such Change in Control and nopublicly-traded parent of such entity.The Executive’s right to terminate his employment pursuant to this subparagraph 4(d) shall not beaffected by his incapacity due to physical or mental illness. The Executive’s continued employmentduring any notice and cure period set forth in this subparagraph 4(d) shall not constitute consentto the applicable Good Reason event and shall not constitute a waiver of the Executive’s right toterminate employment on account of Good Reason after expiration of any cure period in accordancewith this subparagraph 4(d).          (e) Termination by Executive. The Executive may terminate his employment hereunder atany time for any reason by giving the Company prior written Notice of Termination (as defined insubparagraph 4(g)), which Notice of Termination shall be effective not less than 60 days after itis given to the Company, provided that nothing in this Agreement shall require the Executive tospecify a reason for any such termination. However, to the extent that the procedures specified insubparagraph 4(d) are required, the procedures of this subparagraph 4(e) may not be used in lieu ofthe procedures required under subparagraph 4(d).          (f) Termination by Company. The Company may terminate the Executive’s employmenthereunder at any time for any reason, by giving the Executive prior written Notice of Termination,which Notice of Termination shall be effective immediately, or such later time as is specified insuch notice. The Company shall not be required to specify a reason for the termination under thissubparagraph 4(f), provided that termination of the Executive’s employment by the Company shall bedeemed to have occurred under this subparagraph 4(f) only if it is not for reasons described insubparagraph 4(b), 4(c), 4(d), or 4(e). Notwithstanding the foregoing provisions of thissubparagraph 4(f), if the Executive’s employment is terminated by the Company in accordance withthis subparagraph 4(f), and within a reasonable time period thereafter, it is determined by theBoard that circumstances existed which would have constituted a basis for termination of theExecutive’s employment for Cause in accordance with subparagraph 4(c) disregarding circumstanceswhich could have been remedied if notice had
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been given in accordance with subparagraph 4(c), the Executive’s employment will be deemed tohave been terminated for Cause in accordance with subparagraph 4(c).          (g) Notice of Termination. Any termination of the Executive’s employment by theCompany or the Executive (other than a termination pursuant to subparagraph 4(a)) must becommunicated by a written Notice of Termination to the other party hereto. For purposes of thisAgreement, a “Notice of Termination” means a dated notice which indicates the Date of Termination(not earlier than the date on which the notice is provided), and which indicates the specifictermination provision in this Agreement relied on and, except for a termination pursuant tosubparagraph 4(e) or 4(f), which sets forth in reasonable detail the facts and circumstances, ifany, claimed to provide a basis for termination of the Executive’s employment under the provisionso indicated. No purported termination of the Executive’s employment which is not effectedpursuant to a Notice of Termination satisfying the requirements of this subparagraph shall beeffective.          (h) Date of Termination. “Date of Termination” means the last day the Executive isemployed by the Company and the Subsidiaries, provided that the Executive’s employment isterminated in accordance with the foregoing provisions of this paragraph 4 and such terminationconstitutes a “separation from service” within the meaning of Treasury Regulation Section1.409A-1(h) determined in accordance with the default provisions thereof.          (i) Effect of Termination. If, on the Date of Termination, the Executive is a memberof the Board or the board of trustees or board of directors of any of the Subsidiaries, or holdsany other position with the Company or any of the Subsidiaries (other than the position describedin subparagraph 2(a) hereof), the Executive shall resign from all such positions as of the Date ofTermination. Notwithstanding anything to the contrary in this Agreement, in the event that theExecutive’s employment is terminated pursuant to subparagraph 4(a) (relating to the Executive’sdeath), subparagraph 4(b) (relating to the Executive being Disabled), subparagraph 4(d) (relatingto Constructive Discharge) or subparagraph 4(f) (relating to termination by the Company withoutCause), any portion of the Incentive Award (including but not limited to any pro rata IncentiveAward that is paid pursuant to clauses 5(b)(ii) or 5(d)(v)) that is paid or vests on or after theearlier of the date that Notice of Termination is provided or the Executive’s Date of Terminationshall not trigger any obligation by the Executive to make a contribution to The ProLogisFoundation pursuant to subparagraph 3(i).     5. Rights Upon Termination. The Executive’s right to payments and benefits under thisAgreement for periods after his Date of Termination shall be determined in accordance with thefollowing provisions of this paragraph 5:          (a) If the Executive’s Date of Termination occurs during the Agreement Term for any reason, orupon the expiration of the Agreement Term as provided in paragraph 1 hereof, the Company shall payto the Executive:          (i) The Executive’s Salary (to the extent not previously paid) for the period ending onthe Date of Termination, payable within 30 days following the Date of Termination (or suchearlier date required by applicable law).
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          (ii) Payment for unused vacation days, as determined in accordance with Company policyas in effect from time to time, payable within 30 days following the Date of Termination (orsuch earlier date required by applicable law).          (iii) If the Date of Termination occurs after the end of a performance period and priorto the payment of the Target Bonus or other applicable bonus amount (as described insubparagraph 3(b)) for the period, the Executive shall be paid such bonus amount at theregularly scheduled time.          (iv) Any other payments or benefits to be provided to the Executive by the Companypursuant to any employee benefit plans or arrangements of the Company, to the extent suchamounts are due from the Company.          (v) Any unreimbursed business expenses payable pursuant to clause 3(g) for the periodending on such termination.          (vi) Any amounts to which the Executive may be entitled under subparagraph 10(c),payable in accordance with subparagraph 10(c).Nothing in this Agreement shall be construed as requiring the Executive to be treated as employedby the Company for purposes of any employee benefit plan or arrangement following the date of theExecutive’s Date of Termination.          (b) If the Executive’s Date of Termination occurs during the Agreement Term undercircumstances described in subparagraph 4(a) (relating to the Executive’s death) or in subparagraph4(b) (relating to the Executive’s being Disabled), then, in addition to the amounts payable inaccordance with subparagraph 5(a), the Executive shall be entitled to:          (i) a bonus pursuant to subparagraph 3(b) for the fiscal year in which the Date ofTermination occurs based on actual performance for such full fiscal year under theapplicable bonus plan, determined solely by the achievement of those corporate financialgoals and objectives established for the corporate-level senior managers of the Company,including the Executive (and not upon the achievement of any additional operating, strategicor other goals or objectives established only for the Executive, and without the exercise ofany negative discretion), multiplied by a fraction, the numerator of which is the number ofdays that the Executive was employed by the Company during such fiscal year, and thedenominator of which is 365. Any prorated bonus payable pursuant to this clause 5(b)(i)shall be payable at the time that bonuses are payable to senior managers of the Companygenerally for such fiscal year (and not later than March 15 following the year in which theDate of Termination occurs); and          (ii) a pro rata portion of the Incentive Award pursuant to subparagraph 3(d) for thecalendar year in which the Date of Termination occurs determined by multiplying $7,500,000by a fraction, the numerator of which is the number of days that the Executive was employedby the Company during such calendar year, and the denominator of which is 365. Any proratedIncentive Award payable pursuant to this clause 5(b)(ii) shall be payable and/or granted onthe Date of Termination.
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          (c) If the Executive’s Date of Termination occurs during the Agreement Term undercircumstances described in subparagraph 4(c) (relating to the Executive’s termination for Cause),subparagraph 4(e) (relating to the Executive’s resignation other than his Constructive Discharge),or if the Executive’s employment with the Company terminates upon the expiration of the AgreementTerm (as contemplated in paragraph 1), then, except as otherwise expressly provided in thisAgreement or otherwise agreed in writing between the Executive and the Board, the Company shallhave no obligation to make payments under this Agreement for periods after the Executive’s Date ofTermination.          (d) If the Executive’s Date of Termination occurs during the Agreement Term undercircumstances described in subparagraph 4(d) (relating to Constructive Discharge) or subparagraph4(f) (relating to termination by the Company without Cause), then, in addition to the amountspayable in accordance with subparagraphs 5(a):          (i) The Executive shall receive from the Company an amount equal to the product of (x)two (2) multiplied by (y) the sum of the Executive’s Salary plus his Target Bonus or, if theTermination Date occurs prior to January 1, 2009, the 2008 Bonus (in each case determinedwithout regard for any reduction constituting Good Reason), which amount shall be payable tothe Executive in substantially equal payroll installments for the 24-month period followingthe Date of Termination (the “Severance Period”). The Severance Period, and the Company’sobligation to make payments under this clause 5(d)(i) shall cease with respect to periodsafter the breach by the Executive of any of the provisions of paragraph 8, subparagraph 9(b)or paragraph 12 of this Agreement. In no event, however, shall the Executive be entitled toreceive any amounts, rights, or benefits under this subparagraph 5(d) unless the “ReleaseRequirements” are satisfied and such requirements will be satisfied if he executes a releaseof claims against the Company in the form attached hereto as Exhibit A within 45 daysfollowing the date such release is tendered by the Company to the Executive, which tendershall be made by the Company within 15 days following the Date of Termination, and allperiods within which the Executive shall have the right to revoke such release, or anyportion thereof, shall have expired. In the event that a termination described in thisclause 5(d)(i) occurs upon, prior to and either at the direction of a third party orotherwise in connection with, or during the 24-month period after, the occurrence of aChange in Control, the amount set forth in this clause 5(d)(i) above shall be paid in a lumpsum within 14 days after the date on which the Release Requirements are satisfied providedsuch Change in Control also constitutes a change in the ownership or effective control ofthe Company or a sale of a substantial portion of the assets of the Company, in accordancewith the requirements of section 409A(a)(2)(A)(v) of the Code and Treasury RegulationSection 1.409A-3(i)(5) (or any successor provision) thereunder. If the Release Requirementsmay be satisfied in more than one calendar year, payments hereunder will be made or begin inthe later year.          (ii) The Executive shall receive continuation of coverage under the medical and dentalplans and arrangements of the Company in which the Executive was participating at the timeof his termination of employment for 24 months following the Date of Termination; providedthat in no event shall the benefits provided (or made available) with respect to any medicalor dental plan or arrangement under this clause
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5(d)(ii) be materially less favorable to the Executive than the benefits most favorableto the Executive that are provided (or were available) during the one-year period prior tosuch termination of employment.          (iii) Payment of $12,000 in a lump sum amount within 30 days after the date ofexecution of the release specified in clause 5(d)(i) hereof in lieu of providing thecontinuation for the Severance Period of benefits under welfare benefit plans of theCompany, other than medical and dental plans, in which the Executive participates.          (iv) Payment of a bonus pursuant to subparagraph 3(b) for the fiscal year in which theDate of Termination occurs based on actual performance for such full fiscal year under theapplicable bonus plan, determined solely by the achievement of those corporate financialgoals and objectives established for the corporate-level senior managers of the Company,including the Executive (and not upon the achievement of any additional operating, strategicor other goals or objectives established only for the Executive, and without the exercise ofany negative discretion), multiplied by a fraction, the numerator of which is the number ofdays that the Executive was employed by the Company during such fiscal year, and thedenominator of which is 365 Any prorated bonus payable pursuant to this clause 5(d)(iv)shall be payable at the time that bonuses are payable to senior managers of the Companygenerally for such fiscal year (and not later than March 15 following the year in which theDate of Termination occurs).          (v) Payment or grant of a pro rata portion of the Incentive Award pursuant tosubparagraph 3(d) for the calendar year in which the Date of Termination occurs determinedby multiplying $7,500,000 by a fraction, the numerator of which is the number of days thatthe Executive was employed by the Company during such calendar year, and the denominator ofwhich is 365. Any prorated Incentive Award payable pursuant to this clause 5(d)(v) shall bepayable and/or granted on the Date of Termination.The foregoing provisions of this subparagraph 5(d) to the contrary notwithstanding, if on the Dateof Termination the Executive is a specified employee (within meaning of Treasury Regulation Section1.409A-1(i)), to the minimum extent required to satisfy section 409A(a)(2)(B)(i) of the Code andTreasury Regulations thereunder, the Executive shall not receive any separation payments orbenefits under subparagraph 5(d) during the 6-month period immediately following the Date ofTermination. During such 6-month period, to the minimum extent required (if at all so required) tosatisfy section 409A of the Code and the Treasury Regulations thereunder, the Executive shall payto the Company the additional premiums not otherwise payable by the Executive under clause 5(d)(ii)required to continue benefits. The amount of separation payments or benefits that would have beenpayable to the Executive under this subparagraph 5(d) during the 6-month period following the Dateof Termination plus any amount paid by the Executive to continue benefits shall be paid to theExecutive on the first regular payroll date following the expiration of such 6-month periodtogether with interest thereon at the short-term applicable federal rate in effect under section1274(d) of the Code on the Date of Termination. With respect to payments under this Agreement, forpurposes of Section 409A of the Code, each payment will be considered one of a series of separatepayments.
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          (e) Except as may be otherwise specifically provided in an amendment of this subparagraph 5(e)adopted in accordance with paragraph 17, the Executive’s rights under this paragraph 5, and underparagraphs 3(c) and 3(d), shall be in lieu of any benefits that may be otherwise payable to or onbehalf of the Executive pursuant to the terms of any severance pay arrangement of the Company orany Subsidiary or any other, similar arrangement of the Company or any Subsidiary providingbenefits upon involuntary termination of employment.     6. Duties on Termination. Subject to the terms and conditions of this Agreement,during the period beginning on the date of delivery of a Notice of Termination, and ending on theDate of Termination, the Executive shall continue to perform his duties as set forth in thisAgreement, and shall also perform such services for the Company as are necessary and appropriatefor a smooth transition to the Executive’s successor, if any. Notwithstanding the foregoingprovisions of this paragraph 6, following the delivery of a Notice of Termination providing for theExecutive’s resignation, or delivery by the Company of a Notice of Termination providing for theExecutive’s termination of employment for any reason, the Company may accelerate the Date ofTermination by written notice to the Executive.     7. Mitigation; No Offset. The Executive shall not be required to mitigate the amountof any payment provided for in this Agreement by seeking other employment. Notwithstanding theforegoing, if, following the Date of Termination, the Executive, through subsequent employment orservice, becomes eligible to receive any employee benefit that is comparable to an employee benefitbeing provided to the Executive by the Company pursuant to paragraph 5(d)(ii) hereof, the Company’sobligation to continue to provide such employee benefit to the Executive pursuant to paragraph5(d)(ii) shall cease. As soon as practicable after the Executive becomes eligible for any suchemployee benefit, he shall notify the Company in writing of such eligibility. Except as providedin accordance with paragraph 3(g), the Company shall not be entitled to set off against the amountspayable to the Executive under this Agreement any amounts owed to the Company by the Executive, anyamounts earned by the Executive in other employment after termination of his employment with theCompany, or any amounts which might have been earned by the Executive in other employment had hesought such other employment.     8. Confidential Information. The Executive agrees that, during the Agreement Term,and at all times thereafter:          (a) Except as may be required by the lawful order of a court or agency of competentjurisdiction, except as necessary to carry out his duties to the Company and its Subsidiaries, orexcept to the extent that the Executive has express authorization from the Company, the Executiveagrees to keep secret and confidential indefinitely, all Confidential Information, and not todisclose the same, either directly or indirectly, to any other person, firm, or business entity, orto use it in any way.          (b) To the extent that any court or agency seeks to have the Executive disclose ConfidentialInformation, he shall promptly inform the Company, and he shall take such reasonable steps toprevent disclosure of Confidential Information until the Company has been informed of suchrequested disclosure, and the Company has an opportunity to respond to such court or agency. Tothe extent that the Executive obtains information on behalf of the Company
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or any of the Subsidiaries that may be subject to attorney-client privilege as to theCompany’s attorneys, the Executive shall take reasonable steps to maintain the confidentiality ofsuch information and to preserve such privilege.          (c) Nothing in the foregoing provisions of this paragraph 8 shall be construed so as toprevent the Executive from using, in connection with his employment for himself or an employerother than the Company or any of the Subsidiaries, knowledge which was acquired by him during thecourse of his employment with the Company and the Subsidiaries, and which is generally known topersons of his experience in other companies in the same industry.          (d) For purposes of this Agreement, the term “Confidential Information” shall include allnon-public information (including, without limitation, information regarding litigation and pendinglitigation) concerning the Company and the Subsidiaries which was acquired by or disclosed to theExecutive during the course of his employment with the Company, or during the course of hisconsultation with the Company following his Date of Termination (regardless of whether consultationis pursuant to paragraph 10 hereof).          (e) This paragraph 8 shall not be construed to unreasonably restrict the Executive’s abilityto disclose confidential information in an arbitration proceeding or a court proceeding inconnection with the assertion of, or defense against any claim of breach of this Agreement inaccordance with paragraph 24. If there is a dispute between the Company and the Executive as towhether information may be disclosed in accordance with this subparagraph 8(e) the matter shall besubmitted to the arbitrators or the court (whichever is applicable) for decision.     9. Noncompetition; Nonsolicitation.          (a) During the Restricted Period (as defined below) the Executive will not, without theCompany’s prior written consent, directly or indirectly, for the Executive’s own account or for oron behalf of any other person or entity, whether an officer, director, employee, partner,consultant or otherwise, engage or participate in, directly or indirectly, alone or as principal,agent, employee, employer, consultant, investor or partner of, or assist in the management of, orprovide advisory or other services to, or own any stock or any other ownership interest in, or makeany financial investment in, any business or entity which is Competitive with the Company (asdefined below) or purchase any property which could reasonably be used to provide or develop abusiness that is Competitive with the Company. For purposes of this Agreement:          (i) With respect to this subparagraph 9(a), the term “Restricted Period” means theperiod during which the Executive is employed by the Company and, irrespective of whetherthe Executive’s employment is terminated prior to, on or after December 31, 2011, if suchtermination of employment is due to any reason other than (x) a termination by the Companywithout Cause or (y) a termination by the Executive for Good Reason, the Restricted Periodwill continue during the period commencing on the date of the Executive’s termination ofemployment and ending on the first anniversary of such termination of employment.
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          (ii) A business or entity shall be considered “Competitive with the Company” if itengages in any of the businesses in which the Company or any of its affiliates engages,including the business of providing distribution facilities or services, the acquisitions ofproperties for such purpose and the design of business strategies for such purpose. Forpurposes of the portion of the Restricted Period following the Executive’s termination ofemployment, the businesses in which the Company or any of its affiliates engages shall bedetermined as of the Executive’s termination of employment.          (iii) For periods after the Executive’s termination of employment, a business entityshall not be considered “Competitive with the Company” (as defined in clause (ii) above) forpurposes of this Agreement if it builds anything other than industrial warehouses oracquires property for purposes of developing anything other than industrial warehouses andthe Executive’s investment in such business or entity does not exceed $10,000,000 withrespect to any one transaction or $20,000,000 in the aggregate for all transactions for theportion of the Restricted Period following his Date of Termination.          (b) While the Executive is employed by the Company or any entity controlled by the Company andfor a period of one year after the date the Executive terminates employment for any reason, theExecutive covenants and agrees that he will not, whether for himself or for any other person,business, partnership, association, firm, company or corporation, initiate contact with, solicit,divert or take away any of the customers (entities or individuals from which the Company or anyentity controlled by the Company receives payment for services) of the Company or entity controlledby the Company or employees of the Company or any entity controlled by the Company, provided suchcustomer or employee (i) was a customer or employee of the Company or any entity controlled by theCompany during the Executive’s employment with the Company and (ii is a customer or employee of theCompany of any entity controlled by the Company and at the time of such initiation, solicitation ordiversion.     10. Standstill. The Executive agrees that, for the 12-month period immediatelyfollowing his Date of Termination and provided the Company timely makes the payments described insubparagraph 10(c), without the consent of the Company:          (a) the Executive will not, and will cause each of his affiliates and his respectiveRepresentatives (as defined below) not to, for or on behalf of the Executive, singly or as part ofa group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, asamended), directly or indirectly: (i) in any manner acquire or propose to acquire in excess of 5%of the voting securities of the Company or material assets of the Company or any rights to acquirein excess of 5% of such voting securities or any such material assets (other than upon the exerciseof options or vesting of other awards granted by the Company on or prior to the Date ofTermination), (ii) participate in any solicitation of proxies or become a participant in anyelection contest with respect to the Company or any of its subsidiaries, (iii) form, join or in anyway participate in a group with respect to any voting securities of the Company or any of itssubsidiaries, (iv) act in concert with any other entity with respect to any voting securities orotherwise act, alone or in concert with others, to seek or offer to control or influence, in anymanner, the management, Board or policies of the Company or any of its subsidiaries, (v)
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communicate with stockholders of the Company or any of its subsidiaries with regard to any ofthe foregoing, or (vi) advise, assist or encourage any other person in connection with any of theforegoing; or          (b) unless specifically invited in writing by the Company, the Executive will not, and willcause each of his Representatives not to make any public announcement with respect to (i) any formof merger, tender or exchange offer, consolidation, business combination, recapitalization,liquidation, dissolution, change of control or other similar transaction with respect to theCompany or any of its subsidiaries, (ii) any request to amend, waive or terminate the provisions ofthis paragraph 10 or (iii) any proposal or other statement inconsistent with the terms of thisparagraph 10. For purposes of this paragraph 10, the term “Representatives” includes theExecutive’s agents, advisors or any other person or entity acting on behalf of the Executive inconnection with any prohibited activity under subparagraph 10(a) (including, without limitation,attorneys, accountants, consultants, bankers, financial advisors and any representatives of hisadvisors).          (c) In consideration of the Executive’s agreement and compliance with the provisions of thisparagraph 10, the Company shall pay to the Executive an amount equal to his annual Salary as ineffect immediately prior to his Date of Termination, which amount shall be paid in substantiallyequal installments over the one-year period immediately following the Date of Termination inaccordance with the normal payroll practices of the Company .     11. Assistance with Claims. The Executive agrees that, for the period beginning onthe Effective Date and continuing for a reasonable period after the Executive’s termination ofemployment, the Executive will assist the Company and the Subsidiaries in defense of any claimsthat may be made against the Company and the Subsidiaries, and will assist the Company and theSubsidiaries in the prosecution of any claims that may be made by the Company or the Subsidiaries,to the extent that such claims may relate to services performed by the Executive for the Companyand the Subsidiaries. The Executive agrees to promptly inform the Company if he becomes aware ofany lawsuits involving such claims that may be filed against the Company or any Subsidiary. TheCompany agrees to provide legal counsel to the Executive in connection with such assistance (to theextent legally permitted), and to reimburse the Executive for all of the Executive’s reasonableout-of-pocket expenses associated with such assistance, including travel expenses and reasonablelegal expenses. The Executive shall choose his legal counsel in his reasonable sole discretion.For periods after the Executive’s employment with the Company terminates, the Company agrees toprovide reasonable compensation to the Executive for such assistance. The Executive also agrees topromptly inform the Company if he is asked to assist in any investigation of the Company or theSubsidiaries (or their actions) that may relate to services performed by the Executive for theCompany or the Subsidiaries, regardless of whether a lawsuit has then been filed against theCompany or the Subsidiaries with respect to such investigation.     12. Nondisparagement.          (a) The Executive agrees that he shall not directly (or through any other person or entity)make any public or private statement (whether oral or in writing) that is derogatory or damaging tothe Company or any of its Subsidiaries or affiliates, including, but not limited to, theirbusinesses, activities, operations, affairs, products, services, reputation or
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prospects or any of their officers, employees or directors; provided, however, that thisparagraph 12(a) shall not prevent the Executive from having any communications with his immediatefamily or his financial and tax advisors, accountants or attorneys or from giving testimonypursuant to compulsory process of law.          (b) The Company agrees that the executive officers, members of the Board and management-levelhuman resources employees of the Company shall not directly (or through any other person or entity)make any public statement or any statement to a third party (whether oral or written) that isderogatory or damaging to the Executive or his business reputation; provided, however, that thissubparagraph 12(b) shall not (i) prevent such executive officers, members of the Board ormanagement-level human resources employees of the Company from having any communications with oneanother or with their legal or professional advisors, or (ii) prevent the Company or any of itsrepresentatives from making disclosure that may be required under any applicable law, regulation orrule, including any rule of any securities exchange upon which any securities of the Company arelisted, or giving testimony that may be required before any tribunal or administrative agency orpursuant to compulsory process of law or other applicable law.     13. Equitable Remedies. The Executive acknowledges that the Company would beirreparably injured by a violation of paragraphs 8, 9 or 10 hereof and he agrees that the Company,in addition to any other remedies available to it for such breach or threatened breach, shall beentitled to a preliminary injunction, temporary restraining order, or other equivalent relief,restraining the Executive from any actual or threatened breach of any of paragraphs 8, 9 or 10. Ifa bond is required to be posted in order for the Company to secure an injunction or other equitableremedy, the parties agree that said bond need not be more than a nominal sum.     14. Nonalienation. Except as otherwise required by law, the interests of theExecutive under this Agreement are not subject in any manner to anticipation, alienation, sale,transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Executiveor the Executive’s beneficiary.     15. Withholding. All payments and benefits under this Agreement are subject towithholding of all applicable taxes.     16. Directors and Officers Insurance. The Executive shall be named as an insured andcovered against the same claims and at the same level of insurance under the Directors and Officersinsurance purchased by the Company for members of the Board.     17. Indemnity. To the maximum extent permitted by all of applicable law, the Amendedand Restated Declaration of Trust of the Company and the Amended and Restated Bylaws of the Company(in the case of such Declaration of Trust and Bylaws, as in effect on the date hereof), the Companyshall indemnify the Executive against, and shall pay and advance to the Executive, all expenses,including, without limitation, attorneys’ fees, disbursements and retainers, accounting and witnessfees, travel and deposition costs, expenses of investigations, judicial or administrativeproceedings and appeals, amounts paid in settlement by the Executive or on behalf of the Executive,actually incurred by the Executive in connection with any threatened, pending or completed claim,action, suit or proceeding, formal or informal, whether
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brought in the right of the Company or otherwise and whether of a civil, criminal,administrative or investigative nature, by reason of the fact that the Executive was serving as adirector, officer, employee or agent of the Company or its affiliates or was serving at theCompany’s request as a director, officer, employee, or agent of another corporation, limitedliability company, partnership, joint venture, trust, or other enterprise; provided, however, thatthe Company shall not be required to advance any such amounts to the Executive unless the Executivefurnishes to the Company a written undertaking reasonably satisfactory to the Company to repay tothe Company all amounts to be advanced to the Executive by the Company in the event that it isdetermined in accordance with this paragraph 17 that the Executive is not entitled to anyindemnification pursuant to this paragraph 17.     18. Amendment. This Agreement may be amended or cancelled only by mutual agreement ofthe parties in writing without the consent of any other person. So long as the Executive lives, noperson, other than the parties hereto, shall have any rights under or interest in this Agreement orthe subject matter hereof. In the event of the Executive’s death prior to the date that theExecutive receives payment of all amounts due and payable to the Executive under this Agreement,such amounts shall be paid to the Executive’s estate. Without limiting the generality of theforegoing, it is the intent of the parties that all payments hereunder comply with the requirementsof section 409A of Code and applicable guidance issued thereunder and that this Agreement shall beinterpreted in accordance with such intent. To the extent applicable, this Agreement shall beamended as the parties deem necessary or appropriate to comply with the requirements of section409A and applicable guidance issued thereunder in a manner that preserves to the extent possiblethe intended benefits of this Agreement for the parties.     19. Applicable Law. The provisions of this Agreement shall be construed in accordancewith the laws of the State of Colorado, without regard to the conflict of law provisions of anystate.     20. Severability. The invalidity or unenforceability of any provision of thisAgreement will not affect the validity or enforceability of any other provision of this Agreement,and this Agreement will be construed as if such invalid or unenforceable provision were omitted(but only to the extent that such provision cannot be appropriately reformed or modified).     21. Waiver of Breach. No waiver by any party hereto of a breach of any provision ofthis Agreement by any other party, or of compliance with any condition or provision of thisAgreement to be performed by such other party, will operate or be construed as a waiver of anysubsequent breach by such other party of any similar or dissimilar provisions and conditions at thesame or any prior or subsequent time. The failure of any party hereto to take any action by reasonof such breach will not deprive such party of the right to take action at any time while suchbreach continues.     22. Successors. This Agreement shall be binding upon, and inure to the benefit of,the Company and its successors and assigns and upon any person acquiring, whether by merger,consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assetsand business , and the successor shall be substituted for the Company under this Agreement.
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     23. 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 prepaid overnight courier to the parties at theaddresses 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, the nextday or the day designated for delivery;          (b) in the case of certified or registered U.S. mail, 5 days after deposit in the U.S. mail;orprovided, 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 or byovernight service or two-day delivery service are to be delivered to the addresses set forth below:          to the Company:          4545 Airport Way          Denver, CO 80239          Attn: General Counsel          or to the Executive:          To his last address shown on the payroll records of the Company     All notices to the Company shall be directed to the attention of the General Counsel of theCompany, with a copy to the Secretary of the Company. Each party, by written notice furnished tothe other party, may modify the applicable delivery address, except that notice of change ofaddress shall be effective only upon receipt.     24. Arbitration of All Disputes. Except as otherwise provided in paragraph 12, anycontroversy or claim arising out of or relating to this Agreement (or the breach thereof) shall besettled by final, binding and non-appealable arbitration in Colorado by three arbitrators. Exceptas otherwise expressly provided in this paragraph 24, the arbitration shall be conducted inaccordance with the Commercial Rules of the American Arbitration Association (the “Association”)then in effect. One of the arbitrators shall be appointed by the Company, one shall be appointed bythe Executive, and the third shall be appointed by the first two arbitrators. If the first twoarbitrators cannot agree on the third arbitrator within 30 days of the appointment of the secondarbitrator, then the third arbitrator shall be appointed by the Association. Judgment on the awardrendered by the arbitrators may be entered in any court having jurisdiction thereof. Thearbitrators shall have the authority to award any remedy or relief that a court of competentjurisdiction could order or grant, including, without limitation, the issuance of an injunction.However, either party may, without inconsistency with this arbitration provision, apply to anycourt having jurisdiction over such dispute or controversy and seek interim provisional, injunctiveor other equitable relief until the arbitration award is rendered or the controversy is
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otherwise resolved. Except as necessary in court proceedings to enforce this arbitrationprovision or an award rendered hereunder, to obtain interim relief or as otherwise required by law,neither a party nor an arbitrator may disclose the existence, content or results of any arbitrationhereunder without the prior written consent of the Company and the Executive. The Company and theExecutive acknowledge that this Agreement evidences a transaction involving interstate commerce.Notwithstanding any choice of law provision included in this Agreement, the United States FederalArbitration Act shall govern the interpretation and enforcement of this arbitration provision.     25. Legal and Enforcement Costs. The provisions of this paragraph 25 shall apply ifit becomes necessary or desirable for the Executive to retain legal counsel or incur other costsand expenses in connection with any proceeding to enforce any or all of his rights under thisAgreement:          (a) Subject to paragraph 25(d) hereof, the Executive shall be entitled to recover from theCompany reasonable attorneys’ fees, costs and expenses incurred by him in connection with suchenforcement, provided that the Executive shall only be reimbursed for attorneys’ fees, costs orexpenses incurred after, or during the 10 day period preceding, written notice to the Company thathe intends to seek recovery from the Company under this paragraph 25.          (b) The Company shall advance to the Executive (or directly to the Executive’s attorneys)reasonable attorneys’ fees, experts’ fees, costs and expenses incurred by the Executive inaccordance with this paragraph 25 following submission by the Executive to the Company inaccordance with paragraph 26 hereof of appropriate documentation (redacted for privilege, ifappropriate) evidencing the incurrence of such attorneys’ fees, costs and expenses; provided,however, that the Company shall not be required to advance any such amounts to the Executive unlessthe Executive furnishes to the Company a written undertaking reasonably satisfactory to the Companyto repay to the Company all amounts to be advanced to the Executive by the Company in the eventthat it is determined in accordance with paragraph 25(d) hereof that the Executive is not entitledto recover such attorneys’ fees, costs or expenses from the Company.          (c) The Executive shall be entitled to select his legal counsel; provided, however, that suchright of selection shall not affect the requirement that any costs and expenses reimbursable underthis paragraph 25 be reasonable.          (d) Respecting any proceeding under paragraph 12 or 24, if the Executive is not successful onthe merits of at least one material issue in dispute in such proceeding or to the extent that thearbitrators in such proceeding shall determine that under the circumstances recovery by theExecutive of all or a part of any such fees and costs and expenses would be unjust orinappropriate, the Executive shall not be entitled to such recovery; and to the extent that suchamounts shall have been recovered by the Executive previously, the Executive shall repay suchamounts to the Company. If the Executive initiated such proceeding and is successful on the meritsof at least one material issue in dispute in such proceeding, but is not successful on the meritsof all material issues set forth in the Executive’s demand for arbitration in such proceeding, theExecutive shall be entitled to a pro rata portion of such attorneys’ fees, costs and
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expenses based upon the ratio of the amount in controversy with respect to which the Executivewas successful in such proceeding to the total amount in controversy pursuant to the Executive’sdemand for arbitration in such proceeding, unless the arbitrators in such proceeding shalldetermine that under the circumstances that recovery by the Executive of such lesser amount of theExecutive’s fees, costs and expenses would be unjust or inappropriate.     26. Payment of Reimbursable Expenses. Any reimbursement (including any reimbursementunder paragraph 11 or advancement under paragraph 17) payable to the Executive pursuant to thisAgreement shall be conditioned on the submission by the Executive of all expense reports (orinvoices with respect to any advancement under paragraph 17) reasonably required by the Companyunder any applicable expense reimbursement policy, and shall be paid to the Executive within 30days following receipt of such expense reports (or invoices redacted for privilege as may beappropriate), but in no event later than the last day of the calendar year following the calendaryear in which the Executive incurred the reimbursable expense. Any amount of expenses eligible forreimbursement during a calendar year shall not affect the expenses eligibility for reimbursementduring any other calendar year. The right to reimbursement pursuant to this Agreement shall not besubject to liquidation or exchange for any other benefit.     27. Survival of Agreement. Except as otherwise expressly provided in this Agreement,the rights and obligations of the parties to this Agreement, including, without limitation, therights and obligations pursuant to subparagraph 3(f) and paragraph 5 hereof, shall survive thetermination of the Executive’s employment with the Company. Notwithstanding any other provision ofthis Agreement, unless otherwise expressly agreed to in writing by the Company, the respectiveobligations of the parties contained in paragraphs 5, 7, 8, 9, 10, 11, 12, 16, 17, 25, 26, 30, thisparagraph 27, and clauses 3(d)(ii) and 3(d)(iii), as well as all earned and vested amounts andbenefits hereunder, shall survive the termination of the Executive’s employment with the Company,the end of the Agreement Term and any termination of this Agreement.     28. Entire Agreement. Except as otherwise noted herein or in any separation agreementsubsequently entered into by the Executive and the Company, this Agreement, including anyExhibit(s) attached hereto, constitutes the entire agreement between the parties concerning thesubject matter hereof and supersedes all prior and contemporaneous agreements between the partiesrelating to the subject matter hereof, including, without limitation, the Executive ProtectionAgreement, dated as of March 15, 2005, the Confidentiality and Noncompetition Agreement, dated asof September 8, 1997, the Indemnification Agreement dated September 2, 1996, the Amended andRestated Employment Agreement dated February 6, 2008, and the Prior Employment Agreement in eachcase between the Company and the Executive (collectively the “Prior Agreements”), and the PriorAgreements are hereby terminated and shall be of no further force or effect. Notwithstanding theforegoing, in no event shall this Agreement have the effect of accelerating into 2008 any paymentor benefit which would have otherwise been provided under the Prior Agreements in a later year ordeferring to a year after 2008 any payment or benefit which would otherwise have been providedunder the Prior Agreements in 2008, in any case, to the extent that such payment or benefit issubject to section 409A of the Code.
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     29. Counterparts. This Agreement may be executed in two counterparts, each of whichshall be deemed to be an original but both of which together will constitute one and the sameinstrument. One or more counterparts of this Agreement may be delivered by facsimile, with theintention that delivery by such means shall have the same effect as delivery of an originalcounterpart thereof.     30. Make-Whole Payments. The following shall apply with respect to amounts payable toor on behalf of the Executive relating to any Change in Control that occurs after the EffectiveDate:          (a) Subject to the following provisions of this paragraph 30, if any payment or benefit towhich the Executive is entitled from the Company, any affiliate, or trusts established by theCompany or by any affiliate (a “Payment”) is subject to any tax under section 4999 of the Code, orany similar federal or state law (an “Excise Tax”), the Company shall pay to the Executive anadditional amount (the “Make-Whole Amount”) which is equal to (i) the amount of the Excise Tax,plus (ii) the aggregate amount of any interest, penalties, fines or additions to any tax which areimposed in connection with the imposition of such Excise Tax, plus (iii) all income, excise andother applicable taxes imposed on the Executive under the laws of any Federal, state or localgovernment or taxing authority by reason of the payments required under clause (i) and clause (ii)and this clause (iii). Notwithstanding the foregoing provisions of this subparagraph 30(a), if itshall be determined that the Executive is entitled to a Make-Whole Amount, but that the Executive,after taking into account the Payments and the Make-Whole Amount, would not receive a net after-taxbenefit (taking into account both income taxes and any Excise Tax) which is at least ten percent(10%) greater than the net after-tax proceeds to the Executive resulting from an elimination of theMake-Whole Amount and a reduction of the Payments, in the aggregate, to an amount (the “ReducedAmount”) that is one dollar less than the smallest amount that would give rise to any Excise Tax,then no Make-Whole Amount shall be paid to the Executive and the Payments, in the aggregate, shallbe reduced to the Reduced Amount.          (b) For purposes of determining the Make-Whole Amount, the Executive shall be deemed to betaxed at the highest marginal rate under all applicable local, state, federal and foreign incometax laws for the year in which the Make-Whole Amount is paid. The Make-Whole Amount payable withrespect to an Excise Tax shall be paid by the Company within 60 days following the Payment withrespect to which such Excise Tax relates.          (c) All calculations under this paragraph 30 shall be made initially by the Company and theCompany shall provide prompt written notice thereof to the Executive to enable the Executive totimely file all applicable tax returns. Upon request of the Executive, the Company shall providethe Executive with sufficient tax and compensation data to enable the Executive or his tax advisorto independently make the calculations described in paragraph 30(b) above and the Company shallreimburse the Executive for reasonable fees and expenses incurred for any such verification.          (d) If the Executive gives written notice to the Company of any objection to the results ofthe Company’s calculations within 60 days of the Executive’s receipt of written notice thereof, thedispute shall be referred for determination to tax counsel selected by the
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independent auditors of the Company (“Tax Counsel”). The Company shall pay all fees andexpenses of such Tax Counsel. Pending such determination by Tax Counsel, the Company shall pay theExecutive the Make-Whole Amount as determined by it in good faith. The Company shall pay theExecutive any additional amount determined by Tax Counsel to be due under this paragraph 30(together with interest thereon at a rate equal to the short-term applicable federal ratedetermined under section 1274(d) of the Code) promptly after such determination, but in no eventlater than the end of the calendar year next following the calendar year in which the applicabletax is remitted to the Tax Authority, as defined in paragraph 30(e) hereof.          (e) The determination by Tax Counsel shall be conclusive and binding upon all parties unlessthe Internal Revenue Service, a court of competent jurisdiction, or such other duly empoweredgovernmental body or agency (a “Tax Authority”) determines that the Executive owes a greater orlesser amount of Excise Tax with respect to any Payment than the amount determined by Tax Counsel.          (f) If a Taxing Authority makes a claim against the Executive which, if successful, wouldrequire the Company to make a payment under this paragraph 30, the Executive agrees to contest theclaim on request of the Company subject to the following conditions:          (i) The Executive shall notify the Company of any such claim within 10 days of becomingaware thereof. In the event that the Company desires the claim to be contested, it shallpromptly (but in no event more than 30 days after the notice from the Executive or suchshorter time as the Taxing Authority may specify for responding to such claim) request theExecutive to contest the claim. The Executive shall not make any payment of any tax whichis the subject of the claim before the Executive has given the notice or during the 30-dayperiod thereafter unless the Executive receives written instructions from the Company tomake such payment together with an advance of funds sufficient to make the requested paymentplus any amounts payable under this paragraph 30 determined as if such advance were anExcise Tax, in which case the Executive will act promptly in accordance with suchinstructions.          (ii) If the Company so requests, the Executive will contest the claim by either payingthe tax claimed and suing for a refund in the appropriate court or contesting the claim inthe United States Tax Court or other appropriate court, as directed by the Company;provided, however, that any request by the Company for the Executive to pay the tax shall beaccompanied by an advance from the Company to the Executive of funds sufficient to make therequested payment plus any amounts payable under this paragraph 30 determined as if suchadvance were an Excise Tax. If directed by the Company in writing the Executive will takeall action necessary to compromise or settle the claim, but in no event will the Executivecompromise or settle the claim or cease to contest the claim without the written consent ofthe Company; provided, however, that the Executive may take any such action if the Executivewaives in writing his right to a payment under this paragraph 30 for any amounts payable inconnection with such claim. The Executive agrees to cooperate in good faith with theCompany in contesting the claim and to comply with any reasonable request from the Companyconcerning the contest of the claim, including the pursuit of administrative remedies, theappropriate
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forum for any judicial proceedings, and the legal basis for contesting the claim. Uponrequest of the Company, the Executive shall take appropriate appeals of any judgment ordecision that would require the Company to make a payment under this paragraph 30. Providedthat the Executive is in compliance with the provisions of this clause 30(f)(ii), theCompany shall be liable for and indemnify the Executive against any loss in connection with,and all costs and expenses, including attorney’s fees, which may be incurred as a result of,contesting the claim, and shall provide to the Executive within 30 days after each writtenrequest therefor by the Executive cash advances or reimbursement for all such costs andexpenses actually incurred or reasonably expected to be incurred by the Executive as aresult of contesting the claim.          (iii) Should a Tax Authority finally determine that an additional Excise Tax is owed,then the Company shall pay an additional Make-Up Amount to the Executive in a mannerconsistent with this paragraph 30 with respect to any additional Excise Tax and any assessedinterest, fines, or penalties. If any Excise Tax as calculated by the Company or TaxCounsel, as the case may be, is finally determined by a Tax Authority to exceed the amountrequired to be paid under applicable law, then the Executive shall repay such excess to theCompany within 30 days of such determination; provided that such repayment shall be reducedby the amount of any taxes paid by the Executive on such excess which is not offset by thetax benefit attributable to the repayment.     IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has caused thesepresents to be executed in its name and on its behalf, all as of the Effective Date.      PROLOGIS