EXHIBIT 10.28
AMENDED AND RESTATED
SPECIAL EQUITY AGREEMENT
This Amended and Restated Special Equity Agreement (this "Agreement"),
is made this 5th day of March, 2003 (the "Effective Date"), by and between
ProLogis and K. Xxxx Xxxxxxxxx (the "CEO");
WITNESSETH THAT:
WHEREAS, ProLogis and the CEO are parties to a Special Equity
Agreement, dated as of December 15, 2000 (the "Original Agreement"), and the
parties desire to amend and restate the Original Agreement as herein provided;
and
WHEREAS, the CEO is currently employed by ProLogis as its Chief
Executive Officer; and
WHEREAS, the Management Development and Compensation Committee (the
"Committee") of the Board of Trustees (the "Board") of ProLogis has the
authority to determine compensation of ProLogis' executives; and
WHEREAS, the Committee has determined that, to ensure that the CEO
receives a competitive compensation package, to maintain continuity in the
management of ProLogis' affairs, and to protect ProLogis' valuable business
interests, it is appropriate to amend and restate the Original Agreement on the
terms herein provided;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, ProLogis and the CEO hereby amend and restate the Original Agreement and
agree as follows:
1. Continued Employment. The parties agree that the CEO will continue
in employment with ProLogis through December 31, 2004; provided, however, that
(a) ProLogis reserves its right to terminate the employment of the CEO to the
same extent that it had such right without regard to this Agreement, and (b) the
CEO reserves his right to terminate employment with ProLogis to the same extent
that he had such right without regard to this Agreement.
2. Extension of Option Expiration. ProLogis hereby agrees that:
(a) each stock option which has been granted to the CEO under the
ProLogis 1997 Long-Term Incentive Plan (the "Incentive Plan")
and which is outstanding on the Effective Date (each an
"Existing Option") shall be amended, effective as of the
Effective Date, to provide that the Expiration Date (as
defined in the Incentive Plan) thereof shall be no earlier
than the fifth anniversary of the first to occur of the
CEO's Retirement (as defined in the Incentive Plan),
Disability (as defined in the Incentive Plan) or death, but in
no event later than the tenth anniversary of the date the
Existing Option was granted; and
(b) each stock option which is granted to the CEO under the
Incentive Plan on or after the Effective Date shall provide
that the Expiration Date thereof shall be no earlier than the
fifth anniversary of the first to occur of the CEO's
Retirement, Disability or death, but in no event later than
the tenth anniversary of the date the option is granted.
Notwithstanding the provisions of paragraphs 2 (a) and (b) above, dividend
equivalent units ("DEUs") with respect to options granted to the CEO (including
Existing Options) will continue to be credited after the CEO's Retirement,
Disability or death until the fifth anniversary of the CEO's Retirement,
Disability or death. The provisions of any option granted to the CEO under the
Incentive Plan (including any Existing Option) relating to terminations other
than on account of Retirement, Disability or death shall not be affected by the
provisions of this Agreement or any amendment to any Existing Option.
3. Grant of RSUs. Effective as of December 31, 2000, the CEO shall be
granted 167,500 fully vested restricted share units ("RSUs") in accordance with
the Incentive Plan, which RSUs will be settled in Shares (as defined in the
Incentive Plan). The RSUs granted to the CEO pursuant to this Section 3 shall be
payable in four substantially equal annual installments on each of December 31,
2005, December 31, 2006, December 31, 2007 and December 31, 2008. Prior to
settlement of the RSUs, dividends will be paid to CEO in cash on a quarterly
basis with respect to such RSUs.
4. Noncompetition. In consideration for the additional payments and
benefits awarded to the CEO pursuant to this Agreement, the CEO hereby agrees as
follows:
(a) while he is employed by ProLogis, he shall not, directly or
indirectly, be employed by, serve as a consultant to, or
otherwise assist or provide services to a Competitor (defined
below);
(b) during the Noncompetition Period (as defined below), he shall
not, directly or indirectly, (i) serve on the board of
directors or trustees of or serve as an officer or employee of
any real estate investment trust with a class of securities
registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, or (ii) be employed by,
serve as a consultant to, or otherwise assist or provide
services to a Competitor if: (A) the services that the CEO is
to provide to the Competitor are the same as, or substantially
similar to, any of the services that the CEO provided to
ProLogis and its affiliates, and such services are to be
provided with respect to any location in which ProLogis or any
of its affiliates had material operations during the 24-month
period prior to the Termination Date, or with respect to any
location in which ProLogis or any of its affiliates had
devoted material resources to establishing operations during
the 24-month period prior to the Termination Date; or (B) the
trade secrets, confidential information, or
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proprietary information (including, without limitation,
confidential or proprietary methods) of ProLogis and its
affiliates to which the CEO had access could reasonably be
expected to benefit the Competitor if the Competitor were to
obtain access to such secrets or information;
(c) while he is employed by ProLogis and during the Noncompetition
Period, he shall not, directly or indirectly own an equity,
partnership or profits interest in any Competitor (other than
ownership of 5% or less of the outstanding stock of any
corporation listed on the New York Stock Exchange or the
American Stock Exchange or included in the NASDAQ System);
(d) while he is employed by ProLogis and so long as he shall live
thereafter, he agrees to keep confidential all, and not to
disclose any, data, knowledge or information with respect to
the conduct and details of business of ProLogis and its
affiliates, including trade secrets, and the formulas,
methods, processes, ideas, improvements, machines, tools,
inventions and discoveries related in any way to the business
of ProLogis and its affiliates, which are shown, communicated
or otherwise made known to CEO during his employment with
ProLogis or otherwise; provided, however, that the foregoing
confidentiality obligations of the CEO shall not be applicable
to any such data, knowledge or information which is (i)
available to the general public or industry other than as a
result of a breach of this Agreement, or (ii) known to the CEO
prior to its disclosure to him by ProLogis or its affiliates.
Nothing in this Section 4 shall be construed as limiting the CEO's duty of
loyalty to ProLogis while he is employed by ProLogis, or any other duty he may
otherwise have to ProLogis while he is employed by ProLogis. For purposes of
this Agreement the following capitalized terms shall have the meanings
indicated:
(A) The term "Competitor" means any enterprise (including a
person, firm or business, whether or not incorporated) during
any period in which it is materially competitive in any way
with any business in which ProLogis was engaged during the
period of the CEO's employment with ProLogis during the
24-month period prior to the CEO's Termination Date.
(B) The term "Noncompetition Period" means the period commencing
on the CEO's Termination Date and ending on the fifth
anniversary of his Termination Date.
(C) The term "Termination Date" means the date on which the CEO's
employment with ProLogis terminates for any reason.
5. Equitable Remedies. The CEO acknowledges that ProLogis would be
irreparably injured by a violation of Section 4 of this Agreement, and he agrees
that ProLogis, in addition to any other remedies available to it for such breach
or threatened breach, shall be entitled to a
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preliminary injunction, temporary restraining order, or other equivalent relief,
restraining the CEO from any actual or threatened breach of Section 4.
6. Severability. The invalidity or unenforceability of any provision of
this Agreement 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).
7. Effect of Death Following Retirement. The provisions of this
Agreement shall continue to apply for periods after the CEO's death following
Retirement.
8. Applicable Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Colorado, without regard to the
conflict of law provisions of any state.
9. Amendment. This Agreement may be amended by the mutual agreement of
the parties; provided, however, that any such amendment which would affect any
outstanding award under the Incentive Plan shall be without effect unless the
Committee consents thereto and any amendment which requires an amendment of the
Incentive Plan shall be without effect unless the Board consents thereto.
10. Conditioned on Approval of the Committee and Board. This Amended
and Restated Agreement shall be without force and effect until it is approved by
the Committee and the Board.
IN WITNESS WHEREOF, the CEO has hereunto set his hand and ProLogis has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
/s/ K. Xxxx Xxxxxxxxx
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K. Xxxx Xxxxxxxxx, CEO
PROLOGIS
Acknowledged and Agreed: By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxx X. Xxxxxx Secretary and General Counsel
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Xxxxxx X. Xxxxxx
Chairman
Management Development & Compensation
Committee
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