exv10w1



 





Exhibit 10.1



PROLOGIS 2000 SHARE OPTION PLAN

FOR OUTSIDE TRUSTEES

(As Amended and Restated Effective as of May 18, 2004)




 









 





PROLOGIS 2000 SHARE OPTION PLAN

FOR OUTSIDE TRUSTEES

(As Amended and Restated Effective as of May 18, 2004)


     1. History, Purpose and Effective Date of the Plan. ProLogis, a Maryland
real estate investment trust (the “Trust”), established the ProLogis Trust 2000
Share Option Plan for Outside Trustees (the “Plan”) effective as of May 18,
2000. The Plan is intended to advance the interests of the Trust and its
shareholders by affording to the Trustees who are not officers or employees of
the Trust or its affiliates an additional opportunity to participate in the
ownership of the Trust and to benefit from any appreciation in the market value
of the Shares in order to motivate, retain and attract the highly competent
individuals upon whose judgment, initiative, leadership and continued efforts
the success of the Trust depends. Effective as of September 26, 2002, the name
of the Plan was changed to “ProLogis 2000 Share Option Plan for Outside
Trustees”. The following provisions constitute an amendment, restatement and
continuation of the Plan as in effect immediately prior May 18, 2004.


     2. Definitions. Unless the context otherwise requires, the following
words as used herein shall have the following meanings:


     (a) “Administrator” — The Secretary of the Trust or other person (who is
not an Outside Trustee) designated by the Board to administer the Plan.


     (b) “Annual Meeting” — The annual meeting of shareholders of the Trust.


     (c) “Award”
— Collectively or individually, as the context provides, any
Option, Deferred Share Unit or other grant of a right under the Plan.


     (d) “Beneficiary”
— With respect to an Outside Trustee, the person or
persons the Outside Trustee designates to receive the balance in his or her
Deferred Unit Account in the event his or her Termination Date occurs on
account of death. Any designation of a Beneficiary shall be in writing, signed
by the Outside Trustee and filed with the Administrator prior to the Outside
Trustee’s death. A Beneficiary designation shall be effective when filed with
the Administrator in accordance with the preceding sentence. If more than one
Beneficiary has been designated, the balance in the Outside Trustee’s Deferred
Unit Account shall be distributed to each such Beneficiary per capita. In the
absence of a Beneficiary designation or if no Beneficiary survives the Outside
Trustee, the Beneficiary shall be the Outside Trustee’s estate.


     (e) “Board”
— The Board of Trustees of ProLogis.


     (f) “Cause” shall mean, in the reasonable judgment of the Administrator,
(i) the willful and continued failure by the Trustee to substantially perform
his or her duties with the Trust after written notification by the Trust, (ii)
the willful engaging by the Trustee in conduct which is


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demonstrably injurious to the Trust or any affiliate, monetarily or
otherwise, or (iii) the engaging by the Trustee in egregious misconduct
involving serious moral turpitude. For purposes hereof, no act, or failure to
act, on the Trustee’s part shall be deemed “willful” unless done, or omitted to
be done, by the Trustee not in good faith and without reasonable belief that
such action was in the best interest of the Trust or the affiliate.


     (g) Change
in Control” — As defined in Section 12.


     (h) “Deferred
Unit Account” — A bookkeeping account maintained by the
Trust on behalf of each Outside Trustee who is granted a Deferred Share Unit
hereunder.


     (i) “Deferred
Share Unit” — A stock unit granted pursuant to the
provisions hereof.


     (j) “Disability” — Disability resulting from injury or illness which, as
determined by the Administrator, renders the Participant unable to serve as a
Trustee of the Trust.


     (k) “Dividend
Equivalent Units” — As defined in Section 11.


     (l) “Exchange
Act” — The Securities Exchange Act of 1934, as amended


     (m) “Fair
Market Value” — The closing price of Shares on the New York Stock
Exchange, as such price is reported in the Wall Street Journal on the business
day immediately following the date on which the determination is to be made.


     (n) “Option”
— An option to purchase Shares granted pursuant to the
provisions hereof.


     (o) “Outside
Trustee” — A Trustee of the Trust who is not an officer or
employee of the Trust or its affiliates.


     (p) “Participant”
— An Outside Trustee who has been granted an Award under
this Plan.


     (q) “Plan”
— ProLogis 2000 Share Option Plan for Outside Trustees set
forth herein.


     (r) “Retirement”
— Retirement shall mean the termination of the Trustee’s
position as a Trustee after providing at least five years of service as a
Trustee to the Trust and attaining age 60.


     (s) “Share
Option Agreement” — The agreement described in Section 5
between the Trust and the Participant evidencing the grant of an Option
hereunder pursuant to which the Participant may purchase Shares hereunder.


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     (t) “Shares” — The Trust’s present common shares of beneficial interest
and any share or shares of beneficial interest or other securities of the Trust
hereafter issued or issuable upon, in respect of or in substitution or in
exchange therefor.



     (u) “Termination
Date” — The date on which an Outside Trustee’s service as
an Outside Trustee terminates for any reason.



     (v) “Trustee”
— A person who is a member of the Board.



     3. Administration of the Plan. The Plan shall be administered by the
Administrator, who shall, in accordance with the provisions hereof: (i) direct
the preparation of any appropriate documentation, including Share Option
Agreements, to document the grant of Options, (ii) process and supervise the
exercise and termination of Options, (iii) make necessary adjustments to the
Shares because of changes in capitalization of the Trust, (iv) maintain, adjust
and supervise payments from Deferred Unit Accounts, and (iv) perform such other
ministerial acts as are necessary to carry out the purposes of the Plan.



     4. Shares Subject to Plan. There shall be reserved for use upon exercise
of Options granted under the Plan 400,000 Shares (unless such maximum shall be
increased or decreased by reason of changes in capitalization as provided in
Section 10 hereof). The Shares subject to the Plan may be authorized but
unissued Shares, or may be issued Shares which have been reacquired by the
Trust. Shares with respect to which an Option has been exercised shall not
again be available for Option hereunder, unless the Option shall expire or
terminate for any reason without having been exercised in full (including
Shares which are surrendered pursuant to Section 5(d)), in which case new
Options may be granted hereunder covering such Shares.



     5. Options.



     (a) Option Grant and Agreement. On the date of an Outside Trustee’s
initial election to the Board, the Outside Trustee shall be granted an Option
to purchase in the aggregate such number of Shares are determined by the Board
for the exercise price and subject to the other provisions described below.
Each Option granted hereunder shall be evidenced by a written Share Option
Agreement dated as of the date of grant, which Agreement shall set forth an
offer to sell, at the Option price, the number of Shares subject to the offer,
the period of time during which the offer shall remain open, and such other
terms and provisions that are consistent with the Plan. Any Option granted
pursuant to this Section 5(a) shall be fully vested and exercisable from and
after the date of the grant, subject to the other terms and conditions thereof.



     (b) Option Price. The Option price per Share subject to each Option shall
be the greater of par value or the Fair Market Value of a Share on the date the
Option is granted.



     (c) Option Period. The term of each Option shall be ten (10) years. Each
Option shall be subject to earlier termination as hereinafter provided.



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     (d) Share Appreciation Rights Under Certain Circumstances.




     (i) In the event of the acquisition of fifty percent (50%) or more
of the outstanding Shares as a result of any cash tender offer or
exchange offer, other than one made by the Trust, the Trust shall give
written notice to each optionholder promptly after the date on which the
corporation, person or other entity making a cash tender offer or
exchange offer acquires fifty percent (50%) or more of the outstanding
Shares. Each optionholder shall thereafter have the right, for a period
of thirty (30) days after the date of receipt of such notice from the
Trust, to either (i) exercise his or her Option in full, or (ii)
surrender his or her Option, or the unexercised portion thereof, to the
Trust in exchange for a cash payment to be made by the Trust to the
Participant within ten (10) days after receipt by the Trust of the Option
in an amount representing the difference between the Option price per
Share under the Option and the cash price paid per Share in the tender
offer, or in the event of an exchange offer, the value per Share of the
securities and/or other property offered in such exchange offer.




     (ii) In the event of the dissolution or liquidation of the Trust,
each Option granted under this Plan shall terminate as of such
dissolution or liquidation date, provided that optionholder shall have
the right during the thirty (30) day period prior to such date to
exercise his or her Option in full. At the end of such period, any
unexercised Option, or any unexercised portion thereof, shall terminate
and be of no further effect.



     6. Deferred Share Units. On such date determined by the Board (but in no
event prior to the approval of this amended and restated Plan by the Trust’s
shareholders), each Outside Trustee on such date shall be granted a Deferred
Share Unit with respect to that number of Shares having a Fair Market Value
equal to $50,000. Any Deferred Share Unit granted pursuant to this Section 6
shall be subject to the following terms and conditions of this Section 6 and
all other terms and conditions of the Plan.



     (a) Crediting of Deferred Share Units. As of each date on which an
Outside Trustee is granted a Deferred Share Unit under the Plan, his or her
Stock Unit Account will be credited with that number of units equal to the
number of shares subject to the Deferred Share Unit granted to the Outside
Trustee as of such date.



     (b) Dividend Equivalent Units. A Participant’s Deferred Unit Account
shall be credited with Dividend Equivalent Units in accordance with Section 11.



     (c) Distribution of Deferred Unit Account. As of the Outside Trustee’s
Termination Date, he or she shall be entitled to a distribution of that number
of Shares equal to the sum of (i) the number of units and (ii) the number of
Dividend Equivalent Units credited to his or her Deferred Unit Account as of
his or her Termination Date. Any distribution pursuant to this Section 6(c)
shall be made as soon as practicable following the Outside Trustee’s
Termination Date.



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     (d) Distributions in the Event of Death. If a Outside Trustee’s
Termination Date occurs on account of his or her death, any distributions to
which the Outside Trustee is otherwise entitled hereunder shall be made to the
Outside Trustee’s Beneficiary as soon as practicable after the Outside
Trustee’s death.



     (e) Whole Shares Only. Settlement of all units and Dividend Equivalent
Units with respect to a Participant’s Deferred Unit Account from shall be made
in the form of whole Shares. Any fractional Shares shall be settled in cash.
Upon settlement of a unit or Dividend Equivalent Unit (or any portion thereof),
neither the Participant nor any other person shall have any rights to or with
respect to such unit or Dividend Equivalent Unit (or the portion thereof so
settled).



     7. Non-Transferability and Nonassignment. An Option shall not be
transferable otherwise than by will or by the laws of descent and distribution,
and an Option may be exercised, during the lifetime of the Participant, only by
the Participant or by his or her guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon the Option shall be null and void and
without effect. Notwithstanding the foregoing provisions this Section 7, the
Administrator may permit Options awarded under the Plan to be transferred to or
for the benefit of the Participant’s family (including, without limitation, to
a trust or partnership for the benefit of a Participant’s family), subject to
such procedures as the Administrator may establish. Neither an Outside
Trustee’s nor any other person’s rights to payments under the Plan are subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors of the Outside Trustee.



     8. Exercise of Options; Termination, Death, Disability or Retirement.
Each exercise of an Option, or any part thereof, shall be evidenced by a notice
in writing to the Trust. The purchase price of the Shares as to which an
Option shall be exercised shall be paid in full in cash or by check at the time
of exercise. An optionholder shall not have any of the rights of a shareholder
of the Trust with respect to the Shares covered by the Option except to the
extent that one or more certificates for such Shares shall have been delivered
to the optionholder, or the optionholder has been determined by the Trust’s
Transfer Agent to be a shareholder of record upon due exercise of the Option.
If the Participant’s Termination Date occurs for any reason other than death,
Disability or Retirement, the Participant shall have the right, during the
period ending three months after such Termination Date, to exercise such
Option, to the extent vested, but in no event more than the Option period
described in Section 5(c). In the event of death, Disability or Retirement,
the Participant in the event of Retirement, the Participant or his or her
guardian or legal representative in the event of Disability, or his or her
personal representatives, heirs, legatees or distributees in the event of his
or her death, shall have the right, up to twelve (12) months from the date of
Disability or date of death and up to twelve (12) months from the date of
Retirement, as the case may be, to exercise the Option to the extent that the
Option is vested and is not exercised (but in any event not more than the
Option period described in Section 5(c)). Prior to the date the Shares would
otherwise be transferred pursuant to the



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exercise of an Option, to the extent permitted by the Administrator, a
Participant may irrevocably elect to defer receipt of such Shares until the
last day of a later calendar year, but in no event later than the date on which
the Participant’s Termination Date.



     9. Compliance with Securities and Other Laws. In no event shall the Trust
be required to sell or issue Shares under any Option if the issuance thereof
would constitute a violation by either the Participant or the Trust of any
provision of any law or regulation of any governmental authority or any
national securities exchange. To the extent that the Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.



     10. Adjustments Upon Changes in Capitalization. The Options and units
credited to an Outside Trustee’s Deferred Unit Account shall be adjusted from
time to time as follows:



     (a) Subject to any required action by shareholders, the number of Shares
covered by each outstanding Option, and the Option price, and the number of
units credited to an Outside Trustee’s Deferred Unit Account shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a subdivision or consolidation of Shares or the payment
of a stock dividend (but only in Shares) or any other increase or decrease in
the number of Shares effected without receipt of consideration by the Trust.



     (b) Subject to any required action by shareholders, if the Trust shall be
the surviving corporation in any merger or consolidation, each outstanding
Award shall pertain to and apply to the securities to which a holder of the
number of Shares subject to the Option would have been entitled and, to the
extent determined by the Administrator, the Option price of an Option shall
also be equitably adjusted. A merger or consolidation in which the Trust is
not the surviving corporation shall cause each outstanding Option to terminate
and to cause the balance in the Outside Trustee’s Deferred Unit Account to be
distributed in a lump sum, provided that each optionholder shall, in such
event, have the right immediately prior to such merger or consolidation in
which the Trust is not the surviving corporation to exercise his or her
outstanding Options in full.



     (c) In the event of a change in the Shares as presently constituted which
is limited to a change of all of its authorized Shares with par value into the
same number of Shares with a different par value or without par value, the
Shares resulting from any such change shall be deemed to be Shares within the
meaning of this Plan.



     To the extent that the foregoing adjustments relate to Shares, such
adjustments shall be made by the Administrator, whose determination shall be
final, binding and conclusive. The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Trust to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to



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merge or to consolidate or to dissolve, liquidate or sell, or transfer all or
any part of its business or assets.



     11. Dividend Equivalent Units.



     (a) Award of Dividend Equivalent Units With Respect to Options. For
periods on and after September 1, 2001, “Dividend Equivalent Units” shall not
be granted to any Participant with respect to any Option except to the extent
and on such terms and conditions as specifically provided by the Board. With
respect to “Dividend Equivalent Units” granted with respect to any Option, the
provisions of subparagraphs (i) and (ii) shall apply.




     (i) Crediting of Dividend Equivalent Units. Dividend Equivalent
Units granted in connection with Options under the Plan shall be subject
to the following:





	 	(A)	 	Annual Crediting of Dividend
Equivalent Units. As of the last day of each calendar
year, if the Option and the corresponding Dividend
Equivalent Unit are then outstanding, the Participant
shall be credited with a number of Dividend Equivalent
Units equal to (I) the Trust’s annual dividend for such
calendar year, multiplied by (II) the number of Shares
underlying the Participant’s outstanding Options that
are entitled to awards under this subparagraph (i)
during such calendar year (reduced pro rata to reflect
Shares underlying such Options that were not outstanding
on the record date with respect to each dividend payment
date during such year) and divided by (III) the Trust’s
average Share price for such calendar year.
	 
	 	(B)	 	Additional credits to reflect
dividend payments on Dividend Equivalent Units. As of
the last day of each calendar year, each Participant
shall be credited with a number of additional Dividend
Equivalent Units equal to (I) the Trust’s annual
dividend for such calendar year, multiplied by (II) the
number of Dividend Equivalent Units outstanding during
such calendar year (reduced pro rata to reflect Dividend
Equivalent Units that were not outstanding on each
dividend payment date during such year) and divided by
(III) the Trust’s average Share price for such calendar
year.






     (ii) Terms and Conditions of Dividend Equivalent Units. Dividend
Equivalent Units shall be subject to the following terms and conditions:



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	 	(A)	 	Vesting. Dividend Equivalent Units
shall vest in accordance with the vesting schedule
applicable to the Option with respect to which the
Dividend Equivalent Unit was awarded.
	 
	 	(B)	 	Time of Settlement. Each vested
Dividend Equivalent Unit shall entitle the holder
thereof to a Share in which occurs the first of (A) the
date the Participant exercises the Option with respect
to which the Dividend Equivalent Unit was awarded, or
(B) the date such Option expires by its terms (whether
by reason of termination of service or otherwise).
Notwithstanding the foregoing, in the case of any
Dividend Equivalent Units awarded prior to September 1,
2001, to the extent permitted by the Administrator in
its sole discretion, a Participant may irrevocably
elect, prior to the date the Shares would otherwise be
payable, to defer receipt of such Shares as of the last
date of a later calendar year, but in no event later
than as of the last day of the calendar year in which
occurs the tenth anniversary of the grant of the
underlying Option. Any such deferral election shall be
made in such form and at such times as the Administrator
may determine in its sole discretion. Any payments with
respect to Dividend Equivalent Units shall be made as
soon as practicable after the date as of which payment
is to be made in accordance with the foregoing.
	 
	 	(C)	 	Forfeiture. All Dividend Equivalent
Units which are not vested upon the date of the
termination of the Trustee’s position as a trustee shall
be forfeited.
	 
	 	(D)	 	Whole Shares Only. Settlement of all
Dividend Equivalent Units shall be made in the form of
whole Shares. Any fractional Shares shall be settled in
cash. Upon settlement of a Dividend Equivalent Unit (or
any portion thereof), neither the Participant nor any
other person shall have any rights to or with respect to
such Dividend Equivalent Unit (or the portion thereof so
settled).





     (b) Award of Dividend Equivalent Units With Respect to Deferred Share
Units. Each Participant’s Deferred Unit Account shall be credited with
Dividend Equivalent Units in accordance with the following provisions of this
paragraph (b):




     (i) Annual Crediting of Dividend Equivalent Units. As of the last
day of each calendar year, each Participant’s Deferred Unit Account shall
be credited with a number of Dividend Equivalent Units equal to (A) the
Trust’s annual dividend for such calendar year, multiplied by (B) the
number of units held in Participant’s Deferred Unit Account Shares during
such calendar year (reduced pro rata to reflect units that were not held
in



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the Participant’s Deferred Unit Account on the record date with
respect to each dividend payment date during such year) and divided by
(C) the Trust’s average Share price for such calendar year.




     (ii) Additional credits to reflect dividend payments on Dividend
Equivalent Units. As of the last day of each calendar year, each
Participant shall be credited with a number of additional Dividend
Equivalent Units equal to (A) the Trust’s annual dividend for such
calendar year, multiplied by (B) the number of Dividend Equivalent Units
held in the Participant’s Deferred Unit Account during such calendar year
(reduced pro rata to reflect Dividend Equivalent Units that were not held
in the Participant’s Deferred Unit Account not held under the
Participants Deferred Unit Account on each dividend payment date during
such year) and divided by (C) the Trust’s average Share price for such
calendar year.



     12. Change in Control. In the event that (i) a Trustee’s service is
terminated by the Trust or the successor to the Trust for reasons other than
Cause following a Change in Control of the Trust (as defined below) or (ii) the
Plan is terminated by the Trust or its successor following a Change in Control
without provision for the continuation of outstanding Awards hereunder, all
Options and related Awards which have not otherwise expired shall become
immediately exercisable. For purposes of the Plan, a “Change in Control” means
the happening of any of the following:



     (a) the consummation of a transaction, approved by the shareholders of the
Trust, to merge the Trust into or consolidate the Trust with another entity,
sell or otherwise dispose of 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, or a substantially
concurrent or otherwise related series of transactions, upon the completion of
which 50% or more of the beneficial ownership of the voting power of the Trust,
the surviving corporation or corporation directly or indirectly controlling the
Trust or the surviving 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 the voting power of the Trust immediately
prior to the transaction or the substantially concurrent or otherwise related
series of transactions, except that upon the completion thereof, employees or
employee benefit plans of the Trust may be a new holder of such beneficial
ownership; or



     (b) the “beneficial ownership” (as defined in Rule 13d-3 under the
Exchange Act of securities representing 50% or more of the combined 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 other fiduciary holding securities under an employee benefit or other
similar stock plan of the Trust); or



     (c) at any time during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board cease for any
reason to constitute at least a



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majority thereof (unless the election, or the nomination for election by
the Trust’s shareholders, of each new Trustee was approved by a vote of at
least two-thirds of the Trustees still in office at the time of such election
or nomination who were Trustees at the beginning of such period).



     For purposes of this Section, a Trustee’s service shall be deemed to be
terminated by the Trust or the successor to the Trust if the Trustee terminates
service after (x) a substantial adverse alteration in the nature of the
Trustee’s status or responsibilities from those in effect immediately prior to
the Change in Control, or (y) a material reduction in the Trustee’s annual
compensation as in effect immediately prior to the Change in Control. If, upon
a Change in Control, awards in other shares or securities are substituted for
outstanding Awards pursuant to Section 10, and immediately following the Change
in Control the Trustee becomes trustee of the entity into which the Trust
merged, or the purchaser of substantially all of the assets of the Trust, or a
successor to such entity or purchaser, the Trustee shall not be treated as
having terminated service for purposes of this Section 12 until such time as
the Trustee terminates service with the merged entity or purchaser (or
successor), as applicable.



     13. Amendment of the Plan. All provisions of the Plan (including the form
of Share Option Agreement) may at any time or from time to time be modified or
amended by the Board; provided, however, that no Option at any time outstanding
under the Plan may be materially adversely modified, impaired or cancelled
without the consent of the holder thereof and no amendment of the Plan shall
materially adversely affect the rights of any Outside Trustee accrued under the
Plan prior to the date such amendment is adopted by the Board.



     14. Plan Termination. The Plan shall terminate on December 31, 2010
except as to Options outstanding on such date and no Option shall be granted
under this Plan after that date.




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