EXHIBIT 10.29
SPECIAL EQUITY AGREEMENT
This Special Equity Agreement (this "Agreement"), is made this 5th day
of March, 2003 (the "Effective Date"), by and between ProLogis and Xxxxxx X.
Xxxxx, III (the "Executive");
WITNESSETH:
WHEREAS, the Executive is currently employed by ProLogis in an
executive capacity; 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
Executive 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 enter into this Agreement on the terms herein
provided;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, ProLogis and the Executive hereby agree as follows:
1. Continued Employment. The parties agree that the Executive will
continue in employment with ProLogis through December 31, 2004; provided,
however, that (a) ProLogis reserves its right to terminate the employment of the
Executive to the same extent that it had such right without regard to this
Agreement, and (b) the Executive 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 Executive
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
Executive'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 Executive 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 Executive'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) next above, dividend
equivalent units ("DEUs") with respect to options granted to the Executive
(including Existing Options) will continue to be credited after the Executive's
Retirement, Disability or death until the fifth anniversary of the Executive's
Retirement, Disability or death. For purposes of applying the foregoing and for
applying the provisions of the Incentive Plan to the options granted to the
Executive thereunder (including the Existing Options), the Executive shall be
treated as though he has attained age 60 as of December 31, 2004 without regard
to whether he has actually attained age 60 as of that date. The provisions of
any option granted to the Executive 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, except as specifically provided in the
immediately preceding sentence.
3. Noncompetition. In consideration for the additional payments and
benefits awarded to the Executive pursuant to this Agreement, the Executive
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), except to the extent expressly agreed by ProLogis;
(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
Executive is to provide to the Competitor are the same as, or
substantially similar to, any of the services that the
Executive 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 proprietary information (including, without
limitation, confidential or proprietary methods) of ProLogis
and its affiliates to which the Executive 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
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Exchange or the American Stock Exchange or included in the
NASDAQ System), except to the extent expressly agreed by
ProLogis.
Nothing in this Section 3 or Section 4 shall be construed as limiting the
Executive'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 Executive's employment with ProLogis during the
24-month period prior to the Executive's Termination Date. For
the avoidance of doubt, King and Xxxxx, X.X. ("Xxxx & Xxxxx")
shall not be deemed a Competitor with respect to the Phase II
Bayside Business Park Land in Fremont, California and
Xxxxxxxxx Pass Business Park Land in Tracy, California
currently owned by King & Xxxxx.
(B) The term "Noncompetition Period" means the period commencing
on the Executive's Termination Date and ending on the fifth
anniversary of his Termination Date.
(C) The term "Termination Date" means the date on which the
Executive's employment with ProLogis terminates for any
reason.
4. Confidentiality. The Executive agrees that, 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
Executive during his employment with ProLogis or otherwise; provided, however,
that the foregoing confidentiality obligations of the Executive 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 Executive prior to its disclosure to him by
ProLogis or its affiliates.
5. Equitable Remedies. The Executive acknowledges that ProLogis would
be irreparably injured by a violation of Section 3 or 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
preliminary injunction, temporary restraining order, or other equivalent relief,
restraining the Executive from any actual or threatened breach of Section 3 or
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).
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7. Effect of Death Following Retirement. The provisions of this
Agreement shall continue to apply for periods after the Executive'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 Agreement
shall be without force and effect until it is approved by the Committee and the
Board.
IN WITNESS WHEREOF, the Executive 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/ Xxxxxx X. Xxxxx, III
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Xxxxxx X. Xxxxx, III, Executive
PROLOGIS
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Secretary and General Counsel
Acknowledged and Agreed:
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chairman
Management Development & Compensation
Committee
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