def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Rule 14a-12 |
ProLogis
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing. |
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Notice of 2009
Annual Meeting
and
Proxy Statement
April 8, 2009
4545 Airport
Way
Denver, Colorado
80239
April 8, 2009
Dear Shareholder,
You are cordially invited to attend the annual meeting of
shareholders of ProLogis, which will take place on May 20,
2009, at our world headquarters in Denver, Colorado.
We have elected to take advantage of the Securities and
Exchange Commission rules that allow issuers to furnish proxy
materials to their shareholders on the Internet. We believe that
these rules will allow us to provide our shareholders with the
information they need, while lowering the costs of printing and
delivery and reducing the environmental impact of our annual
meeting.
Details of the business to be conducted at the meeting are
set forth in the formal notice of annual meeting of shareholders
and proxy statement that accompany this letter.
Your vote is important. Whether or not you plan to attend the
annual meeting, it is important that your shares be represented
and voted at the meeting. I urge you to promptly vote and
authorize your proxy instructions electronically through the
Internet, by telephone or, if you have requested and received a
paper copy of the proxy statement, by completing, signing,
dating, and returning the proxy card enclosed with the proxy
statement. Voting through the Internet or by telephone will
eliminate the need to return your proxy card. If you decide to
attend the annual meeting, you will be able to vote in person,
even if you have previously submitted your proxy.
On behalf of the Board of Trustees, I would like to express
our appreciation for your continued interest in ProLogis.
Sincerely,
/s/ Walter C. Rakowich
Walter C. Rakowich
Chief Executive Officer
and Trustee
TABLE OF
CONTENTS
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Every shareholders vote is important. Please
authorize
your proxy through the Internet, by telephone, or
complete, sign,date, and return your proxy card.
NOTICE OF 2009
ANNUAL MEETING
OF SHAREHOLDERS
10:30 a.m., May 20,
2009
ProLogis World
Headquarters
4545 Airport Way
Denver, Colorado 80239
April 8,
2009
To our Shareholders:
The 2009 annual meeting of shareholders of ProLogis, a Maryland
real estate investment trust, will be held at ProLogis
world headquarters, 4545 Airport Way, Denver, Colorado 80239, on
Wednesday, May 20, 2009, at 10:30 a.m., local time,
for the following purposes:
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To elect ten trustees to serve until the 2010 annual meeting;
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To ratify the appointment of KPMG LLP as our independent
registered public accounting firm for the year 2009; and
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To consider any other matters that may properly come before the
meeting and at any adjournments or postponements of the meeting.
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Shareholders of record at the close of business on
March 23, 2009 are entitled to notice of, and to vote at,
the meeting and any adjournments or postponements of the
meeting. On or about April 8, 2009, we intend to mail our
shareholders a notice containing instructions on how to access
our 2009 proxy statement and 2008 annual report to shareholders
on the Internet and also how to vote on the Internet. The notice
also provides instructions on how you can request a paper copy
of these documents if you desire. If you received your annual
materials via
e-mail, the
e-mail
contains voting instructions and links to the proxy statement
and annual report on the Internet.
For the Board of Trustees,
/s/ Edward S. Nekritz
Edward S. Nekritz
Secretary
ProLogis,
4545 Airport Way, Denver, Colorado 80239
This proxy statement is furnished in connection with the
solicitation of proxies by the board of trustees of ProLogis for
the 2009 annual meeting of shareholders of ProLogis.
Distribution and electronic availability of this proxy statement
and proxy card are scheduled to begin on or about April 8,
2009.
In accordance with the rules of the Securities and Exchange
Commission (SEC), instead of mailing a printed copy of our proxy
materials to each shareholder of record or beneficial owner, we
are now furnishing proxy materials (our 2009 proxy statement and
our 2008 annual report to shareholders, which includes our
Annual Report on
Form 10-K)
by providing access to such documents on the Internet. Our
shareholders will not receive printed copies of the proxy
materials unless they elect this form of delivery or they are
participants in our 401(k) Savings Plan and Trust (401(k) Plan).
Printed copies will be provided upon request at no charge.
A Notice of Internet Availability of Proxy Materials (Notice of
Internet Availability) was mailed to our shareholders on or
about April 8, 2009. The Notice of Internet Availability
was provided in lieu of mailing the printed proxy materials and
instructed our shareholders as to how they may: (i) access
and review all of the proxy materials on the Internet;
(ii) submit their proxy; and (iii) receive printed
proxy materials.
Shareholders may request to receive printed proxy materials by
mail or electronically by
e-mail on an
ongoing basis by following the instructions included in the
Notice of Internet Availability. Providing future proxy
materials by
e-mail will
save us some of the costs associated with printing and
delivering the materials and will reduce the environmental
impact of our annual meetings. An election to receive proxy
materials by
e-mail will
remain in effect until such time as the shareholder elects to
terminate it.
You can ensure that your shares are voted at the meeting by
authorizing your proxy through the Internet, by telephone, or by
completing, signing, dating, and returning the printed proxy
card provided with the printed materials. If you are a
shareholder of record, you may still attend the meeting and vote
despite having previously authorized your proxy by any of these
methods. A shareholder of record who gives a proxy may revoke it
at any time before it is exercised by voting in person at the
annual meeting, by delivering a subsequent proxy, by notifying
the inspector of election in writing of such revocation, or, if
previous instructions were given through the Internet or by
telephone, by providing new instructions by the same means. An
admission ticket is required to attend the 2009 annual meeting.
Admission tickets are provided with the printed proxy materials
and with the Notice of Internet Availability.
Important Notice Regarding the Availability of Proxy
Materials for the Shareholders Meeting to be Held on
May 20, 2009:
This proxy statement and our 2008 annual report to
shareholders, which includes our Annual Report on
Form 10-K,
are available at
http://ir.prologis.com.
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SUMMARY OF
PROPOSALS SUBMITTED FOR VOTE
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Proposal 1:
Election of Trustees
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Nominees: At the annual meeting you
will be asked to elect ten trustees to the board of trustees.
The trustees will be elected to one-year terms and will hold
office until the 2010 annual meeting and until their successors
are elected and qualify.
Vote Required: You may vote for or
withhold your vote from any of the trustee nominees. Assuming a
quorum is present, the trustees receiving a majority of the
votes cast in person or by proxy at the meeting will be elected.
For this purpose, a majority of the votes cast means that the
number of common shares that are cast and are voted
For the election of a trustee must exceed the number
of common shares that are withheld from his or her election.
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Proposal 2:
Ratification of the Appointment of Independent Registered Public
Accounting Firm
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Independent Registered Public Accounting
Firm: At the annual meeting you will be asked
to ratify the audit committees appointment of KPMG LLP as
the companys independent registered public accounting firm
for the year 2009.
Vote Required: You may vote for, vote
against, or abstain from voting on ratifying the appointment of
the independent registered public accounting firm. Assuming a
quorum is present, the affirmative vote of a majority of the
common shares voted at the meeting in person or by proxy will be
required to ratify the audit committees appointment of the
independent registered public accounting firm.
The board
of trustees unanimously recommends that the shareholders vote
FOR each of the proposals listed above.
The foregoing are only summaries of the proposals.
You should review the full discussion of each proposal
in this proxy statement before casting your vote.
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At the 2009 annual meeting, all ten trustee nominees are
standing to be elected to hold office until the 2010 annual
meeting and until their successors are elected and qualify. The
ten nominees for election at the 2009 annual meeting, all
proposed by the board of trustees, are listed below with brief
biographies. They are all now ProLogis trustees. We do not know
of any reason why any nominee would be unable or unwilling to
serve as a trustee. However, if a nominee becomes unable to
serve or will not serve, proxies may be voted for the election
of such other person nominated by the board as a substitute or
the board may reduce the number of trustees.
Under our bylaws, trustees in non-contested elections must
receive a majority of affirmative votes cast for election at a
meeting at which a quorum is present. For this purpose, a
majority of the votes cast means that the number of common
shares that are cast and are voted For the election
of a trustee must exceed the number of common shares that are
withheld from his or her election. If a trustee fails to obtain
a majority, he or she must tender his or her resignation to the
board within three days after certification of the voting
results. The board, generally through a process managed by the
board governance and nomination committee, will decide what
action to take with regard to the tendered resignation. A
tendered resignation is effective 90 days from the date of
tender unless the board affirmatively determines to reject the
tendered resignation or accept the resignation on a specified
future date or upon the appointment of a replacement trustee to
fill the vacancy that will result from the resignation. The
board will then explain its decision to accept or reject the
tendered resignation in a Current Report on
Form 8-K,
which will be filed promptly with the SEC.
The board of trustees unanimously recommends that the
shareholders vote FOR the election of each nominee.
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Stephen L. Feinberg. Chairman since November 2008 and Trustee since January 1993
Mr. Feinberg, 64, has been Chairman of the Board and Chief Executive Officer of Dorsar Investment Company, a diversified holding company with interests in real estate and venture capital, since 1970.
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George L. Fotiades. Trustee since December 2001
Mr. Fotiades, 55, has been Chairman of the Healthcare investment practice of Diamond Castle Holdings, a private equity investment firm, since April 2007 and was President and Chief Operating Officer of Cardinal Health, Inc., a provider of services supporting the health care industry, until May 2006. He was previously President and Chief Executive Officer of Life Sciences Products and Services, a unit of Cardinal Health, Inc., and was with Cardinal Health, Inc. or its predecessor in various capacities from 1996 to 2006. He serves on the Board of Directors of Alberto Culver Company and Cantel Medical Corporation.
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Christine N. Garvey. Trustee since September 2005
Ms. Garvey, 63, has served as a consultant to Deutsche Bank AG, a global investment bank, since May 2004. From May 2001 to May 2004, Ms. Garvey served as Global Head of Corporate Real Estate Services at Deutsche Bank AG London. Ms. Garvey serves on the Board of Directors of Maguire Properties Group, HCP Inc., and UnionBanCal Corp. and she was a member of the Board of Directors of Catellus Development Corporation (Catellus) when it was merged with and into a subsidiary of ProLogis in September 2005.
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Lawrence V. Jackson. Trustee since March 2008
Mr. Jackson, 55, is Chairman and Chief Executive Officer of Source Mark, LLC, a medical and surgical supply manufacturer. He was President and Chief Executive Officer, Global Procurement of Wal-Mart Stores, Inc. (Wal-Mart), an international retailer, from April 2006 to February 2007 and, prior to that role, he was Executive Vice President and Chief People Officer of Wal-Mart. He was President and Chief Operating Officer of Dollar General Stores, Inc., a discount retailer, from August 2003 to September 2004.
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Donald P. Jacobs. Trustee since February 1996
Mr. Jacobs, 81, is the Gaylord Freeman Distinguished Professor of Banking and Dean Emeritus of the Kellogg School of Management and has been a member of its faculty since 1957. He serves on the Board of Directors of Terex Corporation.
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Walter C. Rakowich. Trustee since November 2008
Mr. Rakowich, 51, has been Chief Executive Officer of ProLogis since November 2008. Mr. Rakowich was ProLogis President and Chief Operating Officer from January 2005 to November 2008, Chief Financial Officer from December 1998 to September 2005, and Managing Director from December 1998 to December 2004. Mr. Rakowich has been with ProLogis in various capacities since July 1994. Prior to joining ProLogis, Mr. Rakowich was a consultant to ProLogis in the area of due diligence and acquisitions from October 1993 to June 1994 and, prior thereto, he was a partner with Trammell Crow Company, a diversified commercial real estate company in North America. Mr. Rakowich served as a Trustee from August 2004 to May 2008 and was reappointed as a Trustee in November 2008.
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D. Michael Steuert. Trustee since September 2003
Mr. Steuert, 60, has been Senior Vice President and Chief Financial Officer of Fluor Corporation, a publicly-traded engineering and construction firm, since 2001. He serves on the Board of Directors of Weyerhaeuser Corporation.
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J. André Teixeira. Trustee since February 1999
Mr. Teixeira, 56, is Vice President, International Research and Development, of Campbell Soup Company, a global manufacturer and marketer of convenience food products. Mr. Teixeira is a founding partner of, and was President of, eemPOK, a management consulting firm in Belgium, from January 2005 to January 2007, and was Chairman and Senior Partner with BBL Partners, a consulting and trading company in Russia, from January 2002 to July 2006. He was Vice President, Global Innovation and Development, of InBev, formerly Interbrew, a publicly traded brewer in Belgium, from February 2003 to October 2004, and, prior thereto, he was with The Coca-Cola Company, a global manufacturer, distributor and marketer of nonalcoholic beverages, in various capacities between 1978 and 2001 (including President, Coca-Cola Russia/Ukraine/Belarus).
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William D. Zollars. Trustee since June 2001
Mr. Zollars, 61, has been Chairman, President, and Chief Executive Officer of YRC Worldwide Inc. (YRC) (formerly Yellow Roadway Corporation), a holding company specializing in the transportation of industrial, commercial, and retail goods, since 1999 and has been with YRC in various capacities since 1996. He serves on the Board of Directors of CIGNA Corporation and Cerner Corporation.
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Andrea M. Zulberti. Trustee since May 2005
Ms. Zulberti, 57, retired in August 2003 as a Managing Director for Barclays Global Investors (BGI), a global investment management firm. Ms. Zulberti held various positions at BGI starting in 1989 and was Head of Global Operations/Global Chief Administrative Officer from 2000 until her retirement.
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ProLogis remains committed to furthering meaningful corporate
governance practices and maintaining a business environment of
uncompromising integrity. We continue to implement this
commitment through, among other things, our governance policies
and compliance with the Sarbanes-Oxley Act of 2002 and the rules
of the New York Stock Exchange (NYSE). Our board has formalized
several policies, procedures, and standards of corporate
governance that are reflected in our governance guidelines.
These governance guidelines, some of which we touch on below,
can be viewed, together with any future changes, on our website
at
http://ir.prologis.com/governance.cfm.
In addition, copies of our governance guidelines can be
obtained by any shareholder, free of charge, upon written
request to Edward S. Nekritz, Secretary, ProLogis, 4545 Airport
Way, Denver, Colorado 80239.
Trustee Independence. We require that a
majority of our board be independent in accordance with NYSE
requirements. To determine whether a trustee is independent, the
board must affirmatively determine that there is no direct or
indirect material relationship between the company and the
trustee. The board has determined that all of our trustees,
other than Mr. Rakowich, are independent. The board reached
its decision after reviewing trustee questionnaires, considering
any transactions and relationships between us, our affiliates,
members of our senior management and their affiliates, and each
of the trustees, members of each trustees immediate
family, and each trustees affiliates, and considering all
other relevant facts and circumstances. The board has also
determined that all members of the audit, management development
and compensation, and board governance and nomination committees
are independent in accordance with NYSE and SEC rules and that
all members of the audit committee are financially literate.
Lead Trustee. Our outside trustees,
meaning those trustees who are not officers or employees of
ProLogis, meet in regular executive sessions without management
being present. The chair of these executive sessions was trustee
Brooksher until February 22, 2008 when, upon the
announcement of Mr. Brookshers retirement from the
board effective May 2008, the trustees named trustee Feinberg as
lead trustee to chair these executive sessions.
Mr. Feinberg was appointed chairman of the board of
trustees on November 10, 2008. Since our chairman is now
also an outside trustee, we do not now have a lead trustee.
Communicating with Trustees. You can
communicate with any of the trustees, individually or as a
group, by writing to them in care of Edward S. Nekritz,
Secretary, ProLogis, 4545 Airport Way, Denver, Colorado 80239.
All communications should prominently indicate on the outside of
the envelope that they are intended for the full board, for
outside trustees only, or for any particular group or member of
the board. Each communication intended for the board and
received by the secretary that is related to the operation of
the company and is not otherwise commercial in nature will be
forwarded to the specified party following its clearance through
normal security procedures. The outside trustees will be advised
of any communications that were excluded through normal security
procedures, and they will be made available to any outside
trustee who wishes to review them.
Shareholder Recommended Nominees for
Trustee. The board governance and nomination
committee considers shareholder recommended nominees for
trustees and screens all potential candidates in the same manner
regardless of the source of the recommendation. Recommended
nominees should be submitted to the committee following the same
requirements as shareholder proposals generally and, like all
proposals, must satisfy, and will be subject to, our bylaws and
applicable SEC, NYSE, and Maryland rules and regulations.
Submittals must contain the following information as to the
shareholder giving notice and as to any Shareholder Associated
Person (as defined below):
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as to each person whom the shareholder proposes to nominate for
election or reelection as a trustee, all information relating to
such person that is required to be disclosed in solicitations of
proxies for election of trustees, or is otherwise required, in
each case pursuant to Section 14 of the Securities Exchange
Act of 1934, as amended, (Exchange Act), including each proposed
nominees written consent to being named in the proxy
statement as a nominee and to serving as a trustee if elected;
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as to any other business which the shareholder proposes to bring
before the meeting, a brief description of the business desired
to be brought before the meeting, the reasons for conducting
such business at the meeting, and any material interest in such
business of such shareholder and of the beneficial owner, if
any, on whose behalf the proposal is made;
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the name and address of the shareholder, as it appears on our
books, and that of such Shareholder Associated Person;
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the number of shares of each class of our shares which are owned
beneficially and of record by such shareholder, the date such
securities were acquired, and the investment intent of such
acquisition;
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whether and the extent to which any hedging or other transaction
or series of transactions has been entered into by or on behalf
of, or any other agreement, arrangement, or understanding
(including any short position or any borrowing or lending of
shares) has been made, the effect or intent of which is to
mitigate loss or to manage risk or benefit of share price
changes for, or to increase or decrease the voting power of,
such shareholder or any Shareholder Associated Person with
respect to any of our shares, and a general description of
whether and the extent to which such shareholder or Shareholder
Associated Person has engaged in such activities with respect to
shares of stock or other equity interests of any other company;
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to the extent known by the shareholder, the name and address of
any other shareholder supporting the nominee for election or
re-election to the board or the proposal of other business on
the date of such shareholders notice;
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a representation that the shareholder intends to appear in
person or by proxy at the meeting, if there is a meeting, to
nominate the persons named in its notice or to bring other
business proposed in its notice before the meeting;
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in the case of a nomination, a description of all arrangements
or understanding between the shareholder and each proposed
nominee and any other person or persons (including their names)
pursuant to which the nomination(s) are to be made by the
shareholder and any other information relating to the
shareholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of trustees pursuant
to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder.
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A Shareholder Associated Person means, with respect to any
shareholder, any person controlling, directly or indirectly, or
acting in concert with, such shareholder, any beneficial owner
of our shares owned of record or beneficially by such
shareholder and any person controlling, controlled by, or under
common control with such Shareholder Associated Person.
Shareholder recommendations for board candidates should be sent
to the Board Governance and Nomination Committee in care
of Edward S. Nekritz, Secretary, ProLogis, 4545 Airport
Way, Denver, Colorado 80239. For more information on procedures
for submitting nominees, see Additional
Information Shareholder Proposals for Inclusion in
Next Years Proxy Statement and
Shareholder Nominations and Other Shareholder
Proposals for Presentation at Next Years Annual
Meeting. The board governance and nomination committee
reviews its recommendations with the board, which in turn
selects the final nominees. The committee may look at a variety
of factors in identifying potential candidates and may request
interviews or additional information as it deems necessary. Our
declaration of trust requires that our trustees be individuals
who are at least 21 years old and not under any legal
disability. There are no other minimum qualifications that the
committee believes must be met by a nominee. In the course of
identifying and evaluating candidates, the committee will
sometimes retain executive search firms on a fee basis to
identify candidates for the board (as was the case for
Mr. Jackson in connection with his appointment to the board
in March 2008) who are then screened following the same
procedures as all other candidates. In addition to shareholder
nominees, the committee will consider candidates recommended by
trustees, officers, third-party search firms, employees, and
others.
Code of Ethics and Business Conduct. We
have adopted a code of ethics and business conduct that applies
to all employees and trustees entitled A Commitment to
Excellence and Integrity, which can be viewed, together with
any future changes, on our website at
http://ir.prologis.com/governance.cfm.
In addition, copies of our code of ethics and business
conduct can be obtained, free of charge, upon written request to
Edward S. Nekritz, Secretary, ProLogis, 4545 Airport Way,
Denver, Colorado 80239. Our code details the expected behavior
of all employees in routinely applying our institutional and
personal values of honesty, integrity, and fairness to
everything we do at ProLogis. The code outlines in great detail
the key principles of ethical conduct expected of ProLogis
employees, officers, and trustees, including matters related to
conflicts of interest, use of company resources, fair dealing,
and financial reporting and disclosure. The code also
establishes formal procedures for
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reporting illegal or unethical behavior to the ethics
administrator. In addition, it permits employees to report on a
confidential or anonymous basis if desired, any concerns about
the companys accounting, internal accounting controls, or
auditing matters. Employees may contact the ethics administrator
by e-mail,
in writing, or by calling a toll-free telephone number. Any
significant concerns are reported to the audit committee.
Our board of trustees currently consists of ten trustees, nine
of whom are independent under the requirements of the NYSE
listing rules. All of our current trustees are standing for
re-election at the 2009 annual meeting of shareholders. The
board held 12 meetings in 2008, including telephonic meetings
and all trustees attended 75% or more of the board meetings. All
of the trustees attended at least 75% of the meetings of the
committees on which they served during the periods they served,
except as otherwise noted below. Each trustee is expected to
attend the annual meeting of shareholders absent cause, and all
trustees attended the annual meeting last year, in person or
telephonically.
The five standing committees of the board are: audit committee,
board governance and nomination committee, management
development and compensation committee, investment committee,
and sustainability committee.
Audit Committee. The members of the
audit committee are trustees Steuert, who chairs the committee,
Fotiades, Garvey, Jacobs, and Zulberti each of whom is
independent under the rules of the NYSE. This committees
purpose is to be an informed, vigilant, and effective overseer
of our financial accounting and reporting processes consistent
with risk mitigation appropriate in the circumstances. This
committee is directly responsible for the appointment,
compensation, and oversight of our independent registered public
accounting firm. Further, the committee monitors: (i) the
integrity of our financial statements; (ii) our compliance
with legal and regulatory requirements; (iii) our public
accountants qualifications and independence; and
(iv) the performance of our internal audit function and
public accountants. This committee also reviews the adequacy of
its charter on an annual basis. The board has determined that
Mr. Steuert is qualified as an audit committee financial
expert within the meaning of the SEC regulations. There were
nine meetings of this committee in 2008 and all members attended
at least 75% of the meetings during the period in which they
served. The committees report appears below under
Audit Committee Report. The audit committees
responsibilities are stated more fully in its charter which can
be viewed, together with any future changes, on our website at
http://ir.prologis.com/governance.cfm.
In addition, copies of the charter can be obtained by any
shareholder, free of charge, upon written request to Edward. S.
Nekritz, Secretary, ProLogis, 4545 Airport Way, Denver,
Colorado 80239.
Board Governance and Nomination
Committee. The members of the board
governance and nomination committee are trustees Fotiades, who
chairs the committee, Garvey, Teixeira, and Zollars, each of
whom is independent under the rules of the NYSE. This
committees purpose is to: (i) review and make
recommendations to the board on board organization and
succession matters; (ii) assist the full board in
evaluating the effectiveness of the board and its committees;
(iii) review and make recommendations for committee
appointments; (iv) identify individuals qualified to become
board members and propose to the board a slate of nominees for
election; (v) assess and make recommendations to the board
on corporate governance matters; and (vi) develop and
recommend to the board a set of corporate governance principles
for the company. This committee also reviews the adequacy of its
charter on an annual basis. There were five meetings of this
committee in 2008 and all members attended at least 75% of the
meetings during the period in which they served, with the
exception of Mr. Zollars who attended three of the five
committee meetings. The committees responsibilities are
stated more fully in its charter which can be viewed, together
with any future changes, on our website at
http://ir.prologis.com/governance.cfm.
In addition, copies of the charter can be obtained by any
shareholder, free of charge, upon written request to Edward. S.
Nekritz, Secretary, ProLogis, 4545 Airport Way, Denver,
Colorado 80239.
Management Development and Compensation
Committee. The members of the management
development and compensation committee, which we typically refer
to as our compensation committee, are trustees
Jacobs, who chairs the committee, Feinberg, Zollars, and
Zulberti, each of whom is independent under the rules of the
NYSE. The compensation committee is responsible for:
(i) reviewing and recommending to the board corporate goals
and objectives relative to the compensation of our chief
executive officer; (ii) evaluating the chief executive
officers performance in light of those goals and
objectives, and recommending to the board the chief executive
9
officers compensation level based on that evaluation;
(iii) reviewing and recommending to the board the amount
and form of compensation for the senior executive officers;
(iv) making recommendations to the board on general
compensation practices and adopting, administering, and
recommending awards under annual and long-term incentive plans;
(v) retaining and terminating a compensation consulting
firm, including sole authority to approve the firms fees
and other retention terms; (vi) reviewing and reassessing
its charter on an annual basis; (vii) reviewing material
regulatory and legal matters; (viii) ensuring reports are
made to the board or in filings as required by the SEC and the
NYSE; (ix) reviewing and assessing the adequacy of its charter
on an annual basis; (x) participating in succession
planning for key executives; and (xi) forming and
delegating authority to subcommittees when deemed appropriate.
The companys chief executive officer also reports
regularly to the compensation committee on our management
development activities. The compensation committee has retained
the independent compensation consultant Frederic W.
Cook & Co., Inc. to assist the committee in assessing
our compensation programs for senior officers. The consultant
does not advise management, receives no compensation from the
company other than for its work in advising the committee, and
maintains no other economic relationships with the company. The
compensation consultant conducts a comprehensive competitive
review of the compensation program for the companys senior
officers, in terms of both structure and magnitude. The
compensation committee uses the review to assist it in making
compensation recommendations to the board. Our chief executive
officer makes separate recommendations to the compensation
committee concerning the form and amount of compensation for our
senior officers (excluding his own compensation). Please see
Compensation Matters Compensation Discussion
and Analysis for additional information about, and the
processes and procedures for determining, executive officer
compensation. There were seven meetings of this committee in
2008 and all members attended at least 75% of the meetings
during the period in which they served, with the exception of
Mr. Zollars who attended four of the seven committee
meetings. The committees report appears under
Compensation Matters Compensation Committee
Report. The compensation committees responsibilities
are stated more fully in its charter which can be viewed,
together with any future changes, on our website at
http://ir.prologis.com/governance.cfm.
In addition, copies of the charter can be obtained by any
shareholder, free of charge, upon written request to Edward. S.
Nekritz, Secretary, ProLogis, 4545 Airport Way, Denver, Colorado
80239.
Compensation Committee Interlocks and Insider
Participation. No member of the compensation
committee: (i) was, during the year ended December 31,
2008, or had previously been, an officer or employee of the
company or (ii) had any material interest in a transaction
with the company or a business relationship with, or any
indebtedness to, the company. No interlocking relationships
existed during the year ended December 31, 2008, between
any member of the board or the compensation committee and an
executive officer of the company.
Investment Committee. The members of
the investment committee are trustees Feinberg, who chairs the
committee, Fotiades, Jackson, and Zulberti. This
committees purpose is to: (i) discharge the
boards responsibilities relating to strategic investment
issues; (ii) increase discussion and analysis of our
largest investments; and (iii) further the discussion
regarding the investment environment around the world. This
committee is responsible for approving certain significant
acquisitions, dispositions, and other investment decisions.
Additionally, this committee periodically reviews significant
investment risk metrics with management and reviews its charter
on an annual basis. This committee makes regular reports to the
board concerning its activities. There were eight meetings of
this committee in 2008 and all members attended at least 75% of
the meetings during the period in which they served. The
committees charter is available on our website at
http://ir.prologis.com/governance.cfm.
Sustainability Committee. The members
of the sustainability committee, which was formed in 2008, are
trustees Teixeira, who chairs the committee, Jackson, and
Steuert. The committee is organized with the purpose of
providing assistance to the board in reviewing and approving the
companys activities, goals, and policies concerning
environmental sustainability and sustainable development
matters. The committee is also responsible for reviewing and
assessing its charter periodically. There was one meeting of
this committee in September 2008 and all members of the
committee were in attendance. The committees charter is
available on our website at
http://ir.prologis.com/governance.cfm.
10
INFORMATION
RELATING TO TRUSTEES, NOMINEES,
AND EXECUTIVE OFFICERS
Common
Shares Beneficially Owned
The following table shows the number of our common shares
beneficially owned, as of March 23, 2009 (or such other
date indicated in the footnotes below), by each person known to
us to be the beneficial owner of five percent or more, in the
aggregate, of our outstanding common shares.
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Amount of Shares
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Name and Address
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Beneficially Owned
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% of Shares
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FMR
LLC(1)(2)
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22,907,563
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8.6%
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82 Devonshire Street
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Boston, MA 02109
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Barclays Global Investors,
NA(2)(3)
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20,733,111
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7.8%
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400 Howard Street
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San Francisco, CA 94105
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The Vanguard Group,
Inc.(2)(4)
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19,477,120
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7.3%
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100 Vanguard Blvd.
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Malvern, PA 19355
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Cohen & Steers,
Inc.(2)(5)
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14,825,825
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5.6%
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280 Park Avenue
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10th Floor
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New York, NY 10017
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State Street Bank and Trust Company,
Trustee(2)(6)
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14,636,060
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5.5%
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State Street Financial Center
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One Lincoln Street
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Boston, MA 02111
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(1) Information
regarding beneficial ownership of our common shares by FMR LLC
and certain related entities is included herein based on a
Schedule 13G filed with the SEC on February 17, 2009,
relating to such shares beneficially owned as of
December 31, 2008. Such report provides that: (i) FMR
LLC, an investment advisor, is beneficial owner of 20,522,774 of
such common shares and with Edward C. Johnson III each have sole
dispositive power with respect to the common shares beneficially
owned by FMR LLC; (ii) Pyramis Global Advisors
Trust Company (PGATC) is the beneficial owner of 1,115,458
of such common shares and FMR LLC and Mr. Johnson, through
their control of PGATC, each have sole power to vote or to
direct the voting and sole dispositive power with respect to the
common shares beneficially owned by PGATC; (iii) FIL
Limited is the beneficial owner and has sole dispositive power
with respect 985,580 of such common shares and has sole power to
vote or direct the voting with respect to 966,700 of such common
shares; and (iv) Pyramis Global Advisors, LLC (PGA LLC) is
beneficial owner of 283,751 of such common shares and FMR LLC
and Mr. Johnson, through their control of PGA LLC, each
have sole power to vote or direct the voting and sole
dispositive power with respect to the common shares beneficially
owned by PGA LLC.
(2) Entities
included in the Schedule 13G filing have represented that
the common shares reported were acquired and are held in the
ordinary course of business and were not acquired and are not
held for the purpose of or with the effect of changing or
influencing the control of ProLogis and were not acquired and
are not held in connection with or as a participant in any
transaction having such purpose or effect.
(3) Information
regarding beneficial ownership of our common shares by Barclays
Global Investors, NA and certain related entities is included
herein based on a Schedule 13G filed with the SEC on
February 5, 2009, relating to such shares beneficially
owned as of December 31, 2008. Such report provides that:
(i) Barclays Global Investors, NA is beneficial owner and
has sole dispositive power with respect to 9,486,126 of such
common shares and has sole voting power with respect to
7,979,576 of such common shares; (ii) Barclays Global
Fund Advisors is beneficial owner and has sole dispositive
power with respect to 8,932,328 of such common shares and has
sole voting power with respect to 8,915,761 of such common
shares; (iii) Barclays Global Investors, Ltd is beneficial
owner and has sole dispositive power with respect to 1,386,045
of such common shares and sole voting power with respect to
1,228,306 of such common shares; (iv) Barclays Global
Investors Japan Limited is beneficial owner and has sole voting
and dispositive power with respect to 719,737 of such common
shares; (v) Barclays Global Investors Canada Limited is
beneficial owner and has sole voting and dispositive power with
respect to 198,522 of such common shares; and (vi) Barclays
Global Investors Australia Limited is beneficial owner and has
sole voting and dispositive power with respect to 10,353 of such
common shares.
(4) Information
regarding beneficial ownership of our common shares by The
Vanguard Group, Inc. (Vanguard) is included herein based on a
Schedule 13G/A filed with the SEC on February 13,
2009, relating to such shares beneficially owned as of
December 31, 2008. Such report provides that Vanguard is
beneficial owner and has sole dispositive power with respect to
19,477,120 of such common shares. Of the common shares
beneficially owned by Vanguard, Vanguard Fiduciary
Trust Company, a wholly-owned subsidiary of Vanguard, as a
result of its serving as investment manager of collective trust
accounts, directs the voting of 310,513 of such common shares.
(5) Information
regarding beneficial ownership of our common shares by entities
related to Cohen & Steers, Inc. is included herein
based on a Schedule 13G filed with the SEC on
February 17, 2009, relating to such shares beneficially
owned as of December 31, 2008. Such report provides that:
(i) Cohen & Steers Capital Management, Inc. is
beneficial owner and has sole dispositive power
11
with respect to 14,754,635 of such
common shares and has sole voting power with respect to
13,136,045 of such common shares and (ii) Cohen &
Steers Europe S. A. is beneficial owner and has sole dispositive
power with respect to 71,190 of such common shares and sole
voting power with respect to 53,173 of such common shares.
(6) Information
regarding beneficial ownership of our common shares by State
Street Bank and Trust, acting in various fiduciary capacities,
is included herein based on a Schedule 13G filed with the
SEC on February 13, 2009, relating to such shares
beneficially owned as of December 31, 2008. State Street
Bank and Trust, acting in various fiduciary capacities, is the
beneficial owner and has sole power to vote or direct the vote
and shared power to dispose or direct the disposition with
respect to 14,636,060 of such common shares.
The following table shows the number of our common shares
beneficially owned, as of March 23, 2009, by: (i) our
chief executive officer (ii) our chief financial officer;
(iii) our other named executive officers currently employed
by us; (iv) each of our trustees; and (v) our trustees
and all of our executive officers as a group which includes one
other executive officer at March 23, 2009 who is not a
named executive officer.
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Shares Beneficially
Owned
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Shares That May
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Shares Owned as
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Be Acquired by
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of March 23,
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May 23,
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Total Beneficial
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Name(1)
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2009(2)
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2009(3)
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Ownership
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% of Shares
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Named Executive Officers:
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Walter C.
Rakowich(4)
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326,268
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434,505
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760,773
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(5)
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Ted R. Antenucci
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17,093
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87,938
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105,031
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(5)
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William E. Sullivan
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8,814
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15,904
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24,718
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(5)
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Edward S. Nekritz
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60,899
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160,273
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221,172
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(5)
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Trustees:
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Stephen L.
Feinberg(6)
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174,760
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22,020
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196,780
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(5)
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George L. Fotiades
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27,465
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10,000
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37,465
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(5)
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Christine N. Garvey
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15,592
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10,000
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25,592
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(5)
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Lawrence V. Jackson
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(5)
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Donald P. Jacobs
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8,677
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32,020
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40,697
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(5)
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D. Michael Steuert
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10,000
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10,000
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(5)
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J. André Teixeira
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19,264
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15,276
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34,540
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(5)
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William D. Zollars
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10,000
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10,000
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(5)
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Andrea M. Zulberti
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1,000
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10,000
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11,000
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(5)
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All trustees and executive officers as a group (14 total)
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679,549
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860,859
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1,540,408
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0.6
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%
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(1) The
principal address of each person is:
c/o ProLogis,
4545 Airport Way, Denver, Colorado 80239.
(2) This
column includes common shares owned directly or indirectly,
through contract, arrangement, understanding, or relationship,
including vested common shares owned through our 401(k) Plan.
Unless indicated otherwise, all interests are owned directly,
and the indicated person has sole voting and investment power.
(3) This
column includes common shares that may be acquired within
60 days through the exercise of vested, non-voting options
to purchase our common shares and through scheduled vesting of
restricted share units and associated dividend equivalent units.
Unless indicated otherwise, all interests are owned directly and
the indicated person will have sole voting and investment power
upon receipt.
This column does not include vested, non-voting equity awards or
other common shares, receipt of which has been deferred at the
election of the executive officer or the trustee, as these
awards cannot be distributed within 60 days. Our executive
officers have not deferred any such equity awards as of
March 23, 2009. The total number of vested, non-voting
equity awards or other common shares not included for each
trustee is (consisting of deferred share units and associated
accrued dividend equivalent units and common shares deferred
under the trustees deferred fee plan (see
Compensation Matters Trustee Compensation
for Fiscal Year 2008):
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Mr. Feinberg
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34,212
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Mr. Fotiades
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21,687
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Ms. Garvey
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3,597
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Mr. Jackson
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4,038
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Mr. Jacobs
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31,933
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Mr. Steuert
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16,980
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Mr. Teixeira
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6,931
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Mr. Zollars
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18,676
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Ms. Zulberti
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10,929
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(4) The
common shares beneficially owned by Mr. Rakowich include:
(i) 59,748 common shares held in a trust for
Mr. Rakowichs family of which Mr. Rakowich is a
trustee and a beneficiary; (ii) 872 common shares owned by
Mr. Rakowichs children; (iii) 504 common shares
held in a trust in which Mr. Rakowich is trustee and for
which he disclaims beneficial ownership; and (iv) 549
common shares held in a trust for Mr. Rakowichs
family for which he disclaims beneficial ownership.
12
(5) The
percent is less than 1% of the total common shares outstanding.
(6) The
common shares beneficially owned by Mr. Feinberg include:
(i) 50,000 common shares owned by Dorsar Partners, LP of
which Mr. Feinberg may be deemed to share voting and
investment power; (ii) 40,000 common shares owned by Dorsar
Investment Company of which Mr. Feinberg may be deemed to
share voting and investment power; and (iii) 12,000 common
shares in two trusts, one in which Mr. Feinberg is a
beneficiary and one in which he is trustee and a relative is the
beneficiary. Mr. Feinberg has pledged 174,760 of the common
shares beneficially owned by him as security.
Certain
Relationships and Related Transactions
Related Parties Transaction Policy. We
recognize that transactions between us and related parties can
present potential or actual conflicts of interest and create the
appearance that our decisions are based on considerations other
than our best interests and the best interests of our
shareholders. Related parties may include our trustees,
executives, significant shareholders, and immediate family
members and affiliates of such persons.
Several provisions of our code of ethics and business conduct
are intended to help us avoid the conflicts and other issues
that may arise in transactions between us and related parties,
including the following:
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employees will not engage in conduct or activity that may raise
questions as to the companys honesty, impartiality, or
reputation or otherwise cause embarrassment to the company;
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employees shall not hold financial interests that conflict with
or leave the appearance of conflicting with the performance of
their assigned duties;
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employees shall act impartially and not give undue preferential
treatment to any private organization or individual; and
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employees should avoid actual conflicts or the appearance of
conflicts of interest.
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Our code may be amended, modified, or waived by our board or the
board governance and nomination committee, subject to the
disclosure requirements and other provisions of the rules and
regulations of the SEC and the NYSE. We have never waived the
application of our code and have no intention to do so.
In addition, our declaration of trust provides that any
transaction between the company and any trustee or any
affiliates of any trustee must be approved by a majority of the
trustees not interested in the transaction. Also, our written
governance guidelines state that one of the primary
responsibilities of our board is to review the adequacy of the
companys systems for safeguarding the companys
assets.
Although we do not have detailed written procedures concerning
the waiver of the application of our code of ethics and business
conduct or the review and approval of transactions with trustees
or their affiliates, our trustees would consider all relevant
facts and circumstances in considering any such waiver or review
and approval, including:
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whether the transaction is in, or not inconsistent with, the
best interests of the company and its shareholders;
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the terms of the transaction and the terms of similar
transactions available to unrelated parties or employees
generally;
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the availability of other sources for comparable products or
services;
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the benefits to the company;
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the impact on the trustees independence, if the
transaction is with a trustee or an affiliate of a
trustee; and
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the possibility that the transaction may raise questions about
the companys honesty, impartiality, or reputation.
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13
COMPENSATION
DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides our
shareholders with the material information necessary to
understand our compensation policies and practices, particularly
the decisions that were made with respect to the 2008
compensation of our named executive officers. Our named
executive officers for 2008 are: Walter C. Rakowich,
chief executive officer since November 10, 2008 (previously
he was president and chief operating officer), Ted R. Antenucci,
president and chief investment officer, William E. Sullivan,
chief financial officer, Edward S. Nekritz, general counsel,
secretary, and head of global strategic risk management, and
Jeffrey H. Schwartz, our chief executive officer until
his resignation from that position on November 10, 2008.
Executive
Officer Compensation Philosophy
Our compensation philosophy is to provide the level of total
compensation necessary to attract, retain, and motivate highly
competent executives upon whose judgment, initiative,
leadership, and continued efforts our success depends. Inherent
with this philosophy is the reinforcement of strategic
performance objectives through the use of incentive compensation
programs, including both cash and equity components. We believe
that the interests of our executives and our shareholders should
be aligned through compensation structures that, we believe,
promote the sharing of rewards and risks of strategic
decision-making. We seek to provide our executives with a
compensation program that is equitable and internally
consistent, as well as being competitive with the market.
Further, we believe our compensation programs should encourage
executives to make long-term career commitments to us and our
shareholders.
Our compensation committee oversees our executive compensation
programs and reviews and recommends all executive officer
compensation programs and policies. Considerations given by the
compensation committee in recommending individual compensation
levels for our executives include:
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the nature and scope of each executive officers
responsibilities;
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the specific skills and talents of each executive;
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the effectiveness of each individual executive officer and such
officers as a group in promoting the long-term interests of our
shareholders;
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the success of the executive officer within his or her primary
areas of responsibility; and
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the executive officers demonstrated focus on promoting
integrity, leadership, and positive management behavior within
the company.
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Our compensation committee also evaluates the effectiveness of
our executive officer compensation programs on an ongoing basis,
generally with respect to our ability to hire, retain, and
motivate key employees, as well as through our ability to create
long-term shareholder value.
Our executive compensation program, in addition to a cash
component includes equity awards under the ProLogis 2006
Long-Term Incentive Plan, which our shareholders approved in
2006. Each component is discussed in greater detail below with
respect to awards for 2008, along with other arrangements used
to reward, create incentives for, and retain our executive
officers during 2008.
Compensation
Elements for Executive Officers
The basic elements of our compensation approach are:
Base Salary and Cash Bonus. An
executives annual salary provides a basic level of fixed
compensation and is paid for ongoing individual performance
throughout the year. We generally pay a base salary that is at
mid-market levels for similarly situated executives, as
confirmed by our independent compensation consultant Frederic W.
Cook & Co., Inc. In addition, we provide our
executives the opportunity to earn an annual cash bonus. Cash
bonus levels are also generally targeted at mid-market levels,
however, the actual cash bonuses are
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ultimately determined by the compensation committee based on its
judgment of a variety of relevant factors as described below in
How Executive Compensation Levels are
Determined.
Equity Awards. Equity incentive
compensation is awarded annually to our executives,
traditionally at the end of the applicable year. However, as
discussed below, the equity awards for 2008 were not made until
February 2009. In connection with the hiring of new executive
officers, we may grant equity awards at other times in the year
in order to attract the executive to the company. In addition,
we occasionally issue equity awards earlier in the year in order
to reward individual performance or, in special circumstances,
to retain the services of an executive considered vital to our
future success. Equity awards are also generally targeted at
mid-market levels for similarly situated executives, as
confirmed by our independent compensation consultant, however,
the actual equity awards are ultimately determined by the
compensation committee based on its judgment of a variety of
relevant factors as described below in How
Executive Compensation Levels are Determined. For the last
several years, the allocation of annual equity incentive
compensation between restricted share units, performance-based
awards, and share options has generally been approximately
one-third each based on the compensation committees belief
that this mix promotes the objectives of long-term shareholder
value creation and executive officer retention. However, as
discussed below, the compensation committee made changes to this
mix for 2008 as a result of changes in our overall business
strategy. Specific discussion of the equity awards issued for
2008 is included under How Executive
Compensation Levels are Determined.
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Restricted Share Units
(RSUs). Executive officers and other key
employees are eligible for RSU grants. Each unit is equal to one
common share, and the awards have generally vested ratably over
four years. In connection with awards to certain executives
associated with either their hiring or retention, we have
granted RSUs that vest over longer periods or that will all vest
at a specified future date. RSUs provide an incentive to achieve
long-range goals consistent with the interests of our
shareholders and create and maintain shareholder value. RSUs
also encourage continued service because unvested RSUs are
generally forfeited if the executives or employees
service with the company is terminated, other than in cases of
an executives or employees retirement and in certain
other situations as discussed under
Potential Payments Upon Termination or Change in Control.
Dividend equivalent units (DEUs) are awarded with RSUs and vest
under the same criteria as the underlying RSU. DEUs are earned
on December 31st of each year that the award is
outstanding. DEUs are awarded in the form of common shares at
the rate of one common share per DEU. DEUs are accrued based on
our annual common share distribution rate and generally are
earned
and/or vest
under the same terms as the underlying award. We did not grant
any RSUs to executive officers for 2008 when the annual equity
awards were made in February 2009.
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Performance-based Awards. We have also
granted long-term equity incentive compensation that is
performance-based, generally performance share awards (PSAs) or
contingent performance shares (CPSs), to executive officers and
other key employees. We believe that performance-based awards,
like share options and RSUs, promote a close alignment of
longer-term interests between executive officers and
shareholders by compensating executive officers based on their
individual performance and on the companys performance.
Further, we believe that the vesting provisions associated with
these awards encourage continued service. For 2008, the
performance-based awards granted were in the form of PSAs. For
2005, 2006, and 2007, the performance-based awards granted were
in the form of CPSs.
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PSAs granted for
2008. Granted to named executive officers and
other key employees who can earn between 50% and 150% of their
targeted award based on the achievement of a mix of:
(i) numerical and qualitative performance objectives based
upon company performance goals and objectives set by the
compensation committee and (ii) individual performance
objectives over the one-year performance period ending on
December 31, 2009. Once earned, the PSAs will vest ratably
on December 31, 2009, 2010, and 2011, generally should the
executive be in our employ on such dates. DEUs were awarded with
the PSAs and can be earned from the date of grant through the
vesting period, based on the actual amount of PSAs awarded at
the end of the performance period, and will vest under the same
criteria as the underlying PSAs. The 2009 company goals and
objectives are to: (i) de-leverage the balance sheet by
$2 billion from September 30, 2008 through
December 31, 2009; (ii) de-risk the balance sheet
through renegotiation of our global line of credit, and other
actions with respect to 2009 corporate and property fund debt
maturities; (iii) reduce risk in our operating portfolio
through increased leasing of the core portfolio, increased
leasing of the development pipeline
and/or
reduction in the size of the development pipeline, and reduced
business expenditures (land/turnover costs/capital expenditures
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and general and administrative costs); (iv) achieve certain
goals with respect to certain of our joint venture and property
fund investments; and (v) reorganize senior management,
including compensation structure, responsibilities, and
accountability.
CPSs granted in 2005, 2006, and
2007. Granted to named executive officers and
other key employees who can earn between 0% and 200% of their
targeted award based on the companys total shareholder
return compared to the total shareholder return of the fifty
largest (by market capitalization) equity real estate investment
trusts listed in the National Association of Real Estate
Investment Trusts published index as of the beginning of
the three-year performance period that began on
January 1st of the year following the award. With
respect to the CPS grants, total shareholder return includes
share price change plus cash dividends, with the assumption that
all dividends are immediately reinvested in our common shares
(as calculated using data available on Bloomberg). DEUs were
awarded with the CPSs and are earned under the same criteria as
the underlying CPSs. We have also granted CPSs to certain
executives associated with their hiring or retention, such
awards have varying performance periods.
As of December 31, 2008, the following companies comprised
this group: Alexandria Real Estate Equities, Inc., AMB Property
Corporation, Apartment Investment and Management Company,
Archstone-Smith Trust, AvalonBay Communities, Inc., Boston
Properties, Inc., BRE Properties, Inc., Camden Property Trust,
CBL & Associates Properties, Inc., Colonial Properties
Trust, Cousins Properties Incorporated, Crescent Real Estate
Equities Company, Developers Diversified Realty Corporation,
Duke Realty Corporation, Equity Office Properties Trust, Equity
Residential, Essex Property Trust, Inc., Federal Realty
Investment Trust, First Industrial Realty Trust, Inc., General
Growth Properties, Inc., HCP, Inc., Health Care REIT, Inc.,
Hospitality Properties Trust, Host Hotels & Resorts,
Inc., HRPT Properties Trust, Kilroy Realty Corporation, Kimco
Realty Corporation, LaSalle Hotel Properties, Liberty Property
Trust, The Macerich Company, Mack-Cali Realty Corporation, The
Mills Corporation, New Plan Excel Realty Trust, Inc., Pan
Pacific Retail Properties, Inc., Pennsylvania Real Estate
Investment Trust, Plum Creek Timber Company, Inc., ProLogis,
Public Storage, Rayonier, Reckson Associates Realty Corp.,
Regency Centers Corporation, Simon Property Group, Inc., SL
Green Realty Corp., Sovran Self Storage, Inc., Taubman Centers,
Inc., Trizec Properties, Inc., UDR, Inc., Ventas, Inc., Vornado
Realty Trust, and Weingarten Realty Investors. Certain companies
in the originally identified group of comparison companies no
longer have publicly traded equity securities. For purposes of
the return calculation, we used the actual performance of each
of these companies up to the date that was sixty days prior to
the first public announcement that such company would be
involved in a transaction pursuant to which it would cease to
have publicly traded equity securities and, from that date to
the end of the performance period, we used the mean performance
of the other companies remaining in the group. The companies for
which this adjustment was necessary are: Archstone-Smith Trust,
Crescent Real Estate Equities Company, Equity Office Properties
Trust, The Mills Corporation, New Plan Excel Realty
Trust Inc., Pan Pacific Retail Properties, Inc., Reckson
Associates Realty Corp., and Trizec Properties, Inc.
Contingent performance units granted to
Mr. Schwartz in 2008. Granted to
Mr. Schwartz in March 2008 under his employment agreement.
These awards, in keeping with the compensations philosophy
of aligning the interests of our executives and shareholders and
promoting the sharing of rewards and risks of strategic
decision-making, could be earned by Mr. Schwartz based on
company performance as measured by the companys Total
Shareholder Return (TSR) during a performance period beginning
on March 14, 2008 and ending on December 31, 2012. TSR
is defined in the agreement as the compound annualized internal
rate of return on a constant holding of our common shares during
the performance period based on the sum of all dividends paid to
shareholders during the performance period as if reinvested in
additional common shares on the dividend payment date and the
increase or decrease in the average closing common share prices
on the 20 trading days immediately preceding the end of the
performance period above or below the closing common share price
at the commencement of the performance period. Two awards
(200,000 award and 100,000 award) were made with differing
amounts that could be earned dependent on the TSR. DEUs could be
earned on the 100,000 award under certain parameters. These
awards were not earned when Mr. Schwartzs employment
with us ended and were cancelled effective December 8, 2008.
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Share Options. Options to purchase our
common shares have been an effective incentive for executive
officers and other key employees in performance and retention,
and they promote a close alignment of
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interests between executives and shareholders. The executive or
employee benefits only when our common share price rises and,
generally, if the executive remains employed during the vesting
period. Generally, our share options have vested ratably over
four years. The share options are granted with an exercise price
equal to the closing price of our common shares on the grant
date. The exercise price for any outstanding share option may
not be decreased after the date of grant except for reductions
approved by our shareholders or if there is an overall
adjustment to our outstanding shares, such as occurs with a
stock split. No share options were awarded as part of the 2008
annual equity award grants in February 2009 as options are
tied only to our share price appreciation. Rather, the
compensation committee granted PSAs, which it believes more
appropriately support the change in the companys business
strategy because PSAs reward specific financial and strategic
performance at both the company and individual levels, while
still aligning the interests of management with those of
shareholders, since the ultimate award is in the form of common
shares.
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Other types of executive officer compensation and related
arrangements consist of:
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Nonqualified Savings Plan (NSP) and Other
Deferrals. The NSP is a nonqualified deferred
compensation plan under Section 409A of the Internal
Revenue Code of 1986, as amended (Code) that provides executives
and certain other employees with a tax advantaged opportunity to
save money to meet their retirement income needs. The NSP works
in tandem with our 401(k) Plan by allowing participants to defer
the receipt and income taxation of a portion of their
compensation in excess of the amount permitted under our 401(k)
Plan. Deferrals to the NSP and the earnings on the deferrals are
not subject to federal income taxes until distribution. In
general, funds deferred under the NSP become available to the
participant upon his or her termination of employment. The value
of a participants account under the NSP is determined by
the performance of an array of hypothetical investment funds
that mirror the investment funds available to participants in
our 401(k) Plan. In connection with the merger with Catellus in
2005, we assumed, with respect to former Catellus employees
(including Mr. Antenucci), the nonqualified deferred
compensation plan in which such employees participated before
the merger. In addition, certain executives may defer the
receipt of their share awards (RSUs, CPSs, PSAs, and DEUs) and
defer their cash bonus into common shares issued under our 2006
Long-Term Incentive Plan in accordance with the terms and
conditions established under an executive deferred compensation
plan approved by the compensation committee. Under the
transitional rules of section 409(A) of the Code
participants in our NSP and our executive deferred compensation
plan were allowed to make a one-time special payment election
prior to December 31, 2008 with respect to their balances
in the NSP and their deferred share awards. Such election
allowed for distribution of all, or a portion, of their
previously deferred balances on a specified future date.
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Change in Control Arrangements. The
employment agreements that we have with Mr. Rakowich and
Mr. Antenucci include provisions related to a change in
control, as did our employment agreement with Mr. Schwartz
that was in effect for most of 2008. Also, we have entered into
a change in control agreement, or executive protection
agreement, with both Mr. Sullivan and Mr. Nekritz. We
believe that the change in control provisions of these
agreements will, among other things, assure us of the continuity
of the executives services in the event of a change in
control of the company and provide a fair and reasonable
severance to executives that are terminated in connection with a
change in control. In evaluating the need for, and the structure
of, the executive protection agreements and the related
provisions of the employment agreements, the compensation
committee considered the practices of similar companies in the
market for executive talent (as provided by the compensation
committees independent compensation consultant). The
compensation committee concluded that agreements of this type
would provide the company a competitive advantage in attracting
and retaining highly competent executives one of the
primary goals of the companys compensation philosophy.
These agreements are also intended to serve the interests of our
shareholders by: (i) providing for the continuity of the
services of the executives during a threatened or actual change
in control; (ii) increasing the objectivity of the
executives in analyzing a proposed change in control and
advising the board of trustees whether such a proposal is in the
best interests of the company and its shareholders;
(iii) retaining the executives best efforts over a
change in control transition period and providing an incentive
to complete the change in control transaction; and
(iv) treating executives fairly by alleviating concerns
regarding continued employment. The double-trigger
(i.e., a change in control and a termination of employment)
structure of the change in control payments and the equity
vesting acceleration provisions were designed with
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input from the compensation committees independent
compensation consultant to be, in the judgment of the
compensation committee, fair and reasonable in light of
competitive compensation practices and the companys
compensation philosophy. The potential payments under these
agreements did not materially affect decisions concerning other
compensation elements. In addition, equity awards under our 2006
Long-Term Incentive Plan provide that if a change in control
occurs and, subject to certain conditions, the executive is
terminated other than for cause or the incentive plan is
terminated, all unvested share options become immediately
exercisable and other unvested share awards become fully vested.
More information concerning the change in control arrangements
is provided under Potential Payments Upon
Termination or Change in Control.
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Certain Employment Agreements. In
September 2007, we entered into an employment agreement with
Mr. Rakowich that was amended and restated in February 2008
to, among other things, retain his services during a transition
period leading to his planned retirement in January 2009. The
agreement concerns, among other things, compensation payable to
Mr. Rakowich. Upon the resignation of Mr. Schwartz and
Mr. Rakowichs promotion to chief executive officer in
November 2008, we entered into an amended and restated agreement
with Mr. Rakowich to ensure the continuity of his services
through 2011.
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We originally entered into an employment agreement with
Mr. Antenucci in May 2006 in connection with our merger
with Catellus, where he had served as president, in order to
assure us of the continuity of his services. This agreement has
been amended and restated since that time, with the latest
agreement effective as of December 31, 2008, to further
assure the continuity of his services and to incorporate the
impact of applicable tax law changes. The agreement concerns,
among other things, compensation payable to Mr. Antenucci.
On March 14, 2008, we entered into an employment agreement
with Mr. Schwartz in order to assure us of the continuity
of his services. The agreement concerned, among other things,
compensation payable to Mr. Schwartz. In November 2008,
Mr. Schwartz resigned as our chief executive officer and
his agreement was terminated effective December 8, 2008.
The agreements with Messrs. Rakowich, Antenucci, and
Schwartz are described in more detail under
Narrative Discussion to the Summary
Compensation Table for Fiscal Year 2008 and the Grants of
Plan-Based Awards in Fiscal Year 2008 Table and under
Potential Payments Upon Termination or Change
in Control.
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Other benefits, including
perquisites. Our named executive officers
participate in benefit plans generally available to all other
employees. We also provide certain other benefits to our named
executive officers to allow us to be competitive in attracting,
retaining, and motivating high-quality, competent executives.
Certain of these benefits, which are provided on a limited
basis, are deemed to be personal benefits or perquisites, as
defined by the SEC. Such benefits include, but are not limited
to, an annual health examination, airline club memberships, home
office equipment and supplies, reimbursement of personal legal
fees incurred in connection with negotiating employment
agreements, and certain travel and entertainment expenses
generally associated with other business travel or entertainment
activities.
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In connection with the promotion of Mr. Schwartz to chief
executive officer in 2005 and the hiring of Mr. Sullivan as
chief financial officer in 2007, and each of their relocations
to our headquarters in Colorado, we agreed, consistent with our
relocation policy, to provide certain assistance in connection
with their moves and the sale of their respective homes. These
arrangements were entered into in order to encourage such
officers to continue or accept employment with us, to facilitate
their moves to Colorado, and to allow them to be more
immediately effective in their roles with us. These benefits are
described in more detail in the footnotes to the summary
compensation table.
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Share Ownership Guidelines. Ownership
of our common shares promotes a close alignment of longer-term
interests between our management and our shareholders.
Therefore, our board adopted ownership guidelines, computed
based on the market value of our common shares that apply to our
trustees and certain executive and other key employees,
including all of the named executive officers, as follows:
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Section 1: for
trustees, ownership of five times the annual board retainer
($250,000 for 2008);
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Section 2: ownership of five times
base salary for the chief executive officer and three times base
salary for certain other officers, including the other named
executive officers, and a
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requirement that, upon exercise of share options by and
distributions of equity awards to the officers, shares must be
retained until such time as the ownership guidelines have been
met, and common shares must be held at a level to ensure
continuing compliance with the guidelines.
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Section 3: hedging policy
prohibiting our trustees and named executive officers from
hedging the economic risk associated with common shares held in
compliance with our share ownership guidelines.
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Trustees and named executive officers have a three-year period
to comply with the guidelines, based upon the date they become
subject to the guidelines.
In December 2008, in light of current global economic conditions
and recent market prices of our common shares, the board
suspended the requirement to comply with sections 1 and 2
of the share ownership guidelines until further action is taken
by the board.
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Recoupment Policy. Our board has
adopted a recoupment policy which provides that, in the event of
a substantial restatement of our previously issued financial
statements, a review will be undertaken of performance-based
compensation awarded to executive and certain other officers
that was attributable to our financial performance during the
time periods restated. The board will determine whether the
restated results would have resulted in the same
performance-based compensation for such officers. If not, the
board will consider: (i) whether the restatement was the
result of error or misconduct; (ii) the amount of
additional compensation paid to the relevant officers as a
result of the previously issued financial statements;
(iii) the best interests of the company in the
circumstances; and (iv) any other relevant facts or
circumstances the board deems appropriate for consideration. If
the board determines that an executive or other officer was
improperly compensated and that it is in our best interests to
recover or cancel such compensation, the board will pursue all
reasonable legal remedies to recover or cancel such
performance-based compensation. The policy further provides that
if the board learns of any misconduct by an executive officer or
certain other officers that caused the restatement, the board
shall take such action as it deems necessary to remedy the
misconduct, prevent its recurrence and, if appropriate, based on
all relevant facts and circumstances, punish the wrongdoer. Such
punishment by the board could include dismissal, legal action
for breach of fiduciary duty, or such other action to enforce
the executives or other officers obligations to us
as may fit the facts surrounding the particular case. In
determining the appropriate punishment, the board may take into
account punishments imposed by third parties and the
boards power to determine the appropriate punishment for
the wrongdoer is in addition to, and not in replacement of,
remedies imposed by such third parties. Mr. Rakowichs
employment agreement also contains provisions with respect to
recovery of amounts earned by him to the extent that the amount
earned was based on satisfaction of goals and objectives that
were impacted by a financial statement restatement or
modification. See further discussion of Mr. Rakowichs
employment agreement under Narrative
Discussion to the Summary Compensation Table for Fiscal Year
2008 and the Grants of Plan-Based Awards in Fiscal Year 2008
Table.
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How
Executive Compensation Levels are Determined
The compensation committee is responsible for, among other
things, reviewing the performance of our chief executive officer
and recommending to the board the compensation of our executive
officers.
In determining the compensation payable to our executive
officers, the compensation committee subjectively evaluates all
factors that it deems material to the determination and relies
on its judgment to determine the amount and the mix of
compensation that it believes are appropriate in light of such
evaluation and the companys compensation philosophy that
is discussed under Executive Officer
Compensation Philosophy. The material factors considered
for 2008, as described in more detail in this section, included
company financial and operating performance, individual
performance, the compensation practices of certain comparison
companies, the competitive review of our compensation program
for our executive officers prepared by the compensation
committees independent compensation consultant, and our
chief executive officers recommendations concerning
compensation (excluding his own compensation). Furthermore, the
compensation committee considered the amount and mix of
compensation payable to the companys other executives when
it determined appropriate compensation for a specific
individual. These factors were considered as a whole without
specific weighting of individual factors. The compensation
committee did not rely on the achievement of specific
performance targets
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or on formulas (other than for CPS award payouts) in determining
compensation, although the compensation committee:
(i) considered mid-market compensation levels for similarly
situated executives as a frame of reference for its analysis, as
confirmed by its independent compensation consultant;
(ii) generally believes that base salaries should be paid
at mid-market levels; and (iii) generally believes that a
larger portion of total compensation should consist of long-term
equity incentive compensation as an executives level of
responsibility increases because this compensation mix promotes
a closer alignment of long-term interests between executive
officers and shareholders. In addition, some elements of the
compensation of Messrs. Rakowich, Antenucci, and Schwartz
for 2008 were affected by the terms of their respective
employment agreements.
2008
Compensation Decisions
Traditionally, our compensation committee makes recommendations
on base salary and target bonus levels for the upcoming year,
along with the final cash bonus awards and equity awards for the
current year, at its December meeting because performance
factors relevant to their decision-making are generally known at
that time.
Individual base salary levels for 2008 for the named executive
officers were set in December 2007 and were effective beginning
in January 2008. Also in December 2007, a target level was set
for the named executive officers 2008 cash bonus. In
making the decisions with respect to the 2008 target bonus
levels for the named executive officers, significant financial
and operating achievements during 2007 were considered by the
compensation committee including, but not limited to:
(i) increases in funds from operations, assets owned,
managed, and under development, and same-store net operating
income; (ii) leasing and development start levels;
(iii) the formation of three new property funds and the
repositioning of another fund; (iv) significant
acquisitions in Europe and Japan; and (v) capital raised
through placement of convertible notes.
We, like most companies, were impacted by the pervasive and
fundamental disruptions of the global financial markets,
primarily beginning late in the third quarter of 2008. While our
operating fundamentals (same-store net operating income, leasing
activity, customer retention, etc.) for 2008 were essentially
flat when compared to prior year levels, we did recognize
significant impairments with respect to certain of our real
estate and other assets in 2008. Further, our common share price
declined significantly during the latter part of 2008. As the
global credit crisis worsened in the fourth quarter, we had to
modify our business strategy. As such, we halted most of our new
development and acquisition activities in order to focus on our
core business of owning and managing industrial properties. The
narrowing of our focus was necessary to allow management to take
the necessary steps toward reducing our debt and enhancing our
liquidity and cash flow. In addition, Mr. Schwartz resigned
as our chief executive officer in November 2008, and
Mr. Rakowich was subsequently appointed.
To entice Mr. Rakowich to accept this position, he was
granted equity awards (RSUs and share options) with an aggregate
fair value at issuance of $4,615,000. These awards vest in
annual 25% increments beginning on December 31, 2008. The
vesting provisions provided incentive for Mr. Rakowich to
rescind his planned retirement and accept the new position, as
well as provide future incentives for him to remain in our
employ. Due to the uncertainties that accompany a change in
chief executive officer, our board believed that continuity at
the executive management level was vital to reposition the
company under its new business strategy. Specifically, the
compensation committee believed that, due to the steps that
would be necessary in 2009 to reduce our debt and enhance our
liquidity and cash flow, continuity within the financial
management of the company was necessary. Accordingly, the board
granted equity awards (RSUs and share options) to
Mr. Sullivan, our chief financial officer, with an
aggregate fair value of $3,461,250. The board also granted
equity awards (RSUs and share options) with an aggregate fair
value of $2,307,500 to both Mr. Antenucci and
Mr. Nekritz. The awards to Messrs. Sullivan,
Antenucci, and Nekritz vest ratably over a four-year period,
ending in November 2012, thus providing the necessary incentives
to these executives to remain in our employ. See
Grants of Plan-Based Awards in Fiscal Year
2008.
The board offered Mr. Rakowich substantially the same
annual compensation package that had been included in
Mr. Schwartzs employment agreement entered into in
March 2008, with the primary difference being that
Mr. Rakowich was issued RSUs and share options in November
2008 in lieu of the contingent performance unit awards contained
in Mr. Schwartzs agreement. See further discussion of
Mr. Rakowichs employment agreement at
Grants of Plan-Based Awards in Fiscal Year
2008 Narrative Discussion to the Summary
Compensation Table for Fiscal Year 2008 and the Grants of
Plan-Based Awards in Fiscal Year 2008 Table.
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In light of the change in business strategy, the change in our
executive management team, and uncertainties with respect to
pending transactions and potential impairment levels, the
compensation committee postponed its considerations of most
compensation matters to February 2009 to ensure that more
current information with respect to company performance (both
for 2008 and the future) was available. As in previous years,
the compensation committee retained the independent compensation
consultant Frederic W. Cook & Co., Inc. to assist the
committee in assessing our compensation programs for our
executive officers, including the named executive officers. For
consideration by the compensation committee, the compensation
consultant conducted a comprehensive competitive review of the
compensation program for these officers, in terms of both
structure and magnitude. Comparisons were made against a group
of public real estate investment trusts that compete with us for
investor capital, business, and executive talent (including the
services of our named executive officers). Our compensation
committee regularly evaluates the appropriate companies to
include in the comparison group as our business evolves and the
competition for talent changes. In addition, the compensation
consultant prepared an analysis of our financial performance
(including financial data such as revenues, net income,
employees, market capitalization, and one- and three-year total
shareholder returns) on a stand-alone basis and as compared with
the group of companies used by the compensation committee in
setting compensation awards and policies. The comparison group
companies consisted of AMB Property Corporation, Apartment
Investment and Management Company, AvalonBay Communities, Inc.,
Boston Properties, Inc., Developers Diversified Realty
Corporation, Duke Realty Corporation, Equity Residential, Host
Hotels & Resorts Inc., Kimco Realty Corporation, The
Macerich Company, Plum Creek Timber Company, Inc., Simon
Property Group, Inc., and Vornado Realty Trust.
In the competitive review, the total compensation of our named
executive officers was compared with the total compensation of
similar positions in this comparison group. Such comparison
group information was publicly available with respect to all
comparison companies only with respect to the chief executive
officer position. Comparison group information was publicly
available to our compensation consultant with respect to eight
companies for the position of chief investment officer, 11
companies for the position of chief financial officer, and six
companies for the position of general counsel. The competitive
review also analyzed other aspects of competitive compensation
practices including: (i) executive and non-employee
trustee/director stock ownership guidelines;
(ii) competitive levels of carried-interest ownership among
executives; (iii) long-term incentive grant type,
prevalence, and mix; (iv) prevalence of special benefits
and perquisites; (v) aggregate potential share dilution;
(vi) aggregate annual share usage; and (vii) aggregate
annual shareholder value transfer (the aggregate annual grant
value of long-term incentives as a percentage of market
capitalization) from long-term incentive compensation programs.
The comparisons and related reports prepared by the compensation
consultant constituted a portion of the factors evaluated by the
compensation committee but were not solely determinative of any
compensation decisions. The compensation committee does not
specifically target any compensation amounts payable to our
named executive officers to the compensation practices of the
comparison group companies, except, in general, for salary. The
compensation consultants comparisons and related reports
provided the competitive information for similarly situated
executives at the comparison group companies that the
compensation committee used as a frame of reference for its
analysis as well as the salary data that the committee
considered in determining salary levels. The compensation
committee also considered the compensation plans of other real
estate companies, in light of current economic conditions, to
the extent such information was available.
In addition, the compensation committee reviewed and discussed
our chief executive officers recommendations concerning
compensation (excluding his own compensation) and his opinions
concerning the performance of the company and our executive and
senior officers (excluding his own performance). Our chief
executive officer attended the meetings of the compensation
committee at which compensation matters (excluding his own
compensation) were discussed. He also reviewed the report
prepared by the independent compensation consultant retained by
the compensation committee and had the ability to discuss such
report with both the consultant and the committee. Our chief
executive officers compensation recommendations and
performance opinions were among the factors considered by the
compensation committee in determining the amount and mix of
compensation, but were not solely determinative of any
compensation decisions.
After reviewing and discussing the consultants findings
and the other factors described above, the compensation
committee prepared compensation recommendations for each
executive officer and other senior officers and concluded that
our executive compensation packages are competitive and
consistent with our
21
compensation philosophy. Our board subsequently reviewed and
discussed those compensation recommendations and approved the
compensation payable to each named executive officer for 2008 as
follows:
|
|
|
|
|
Previously determined salary levels for 2008 for the named
executive officers were not changed, and
Mr. Rakowichs salary did not increase in 2008 as a
result of his promotion to chief executive officer in November
2008. The compensation committee recommended that the named
executive officers 2009 base salaries and target levels
for cash bonuses remain the same as the 2008 levels, consistent
with the company-wide policy for 2009. However,
Mr. Rakowichs 2009 base salary and target bonus were
increased as provided in his employment agreement and consistent
with his promotion to chief executive officer.
|
|
|
|
Actual cash bonuses for 2008, payable in February 2009, were
awarded at less than 100% of the original target levels
(company-wide cash bonuses were generally between 75% and 80% of
the original target levels). Mr. Rakowichs employment
agreement specified an annual bonus award amount of $840,000
which was determined at the time that Mr. Rakowich had
announced his retirement at the end of 2008. In light of current
economic conditions and other factors described in this section,
Mr. Rakowich agreed to a cash bonus award for 2008 of 50%
of the amount required by his agreement.
Mr. Antenuccis cash bonus for 2008 was 80% of the
original target level, the minimum amount payable under his
employment agreement. Mr. Sullivan and Mr. Nekritz
received cash bonus awards for 2008 at 50% of their respective
original target levels. Bonus awards were adjusted in light of
current economic conditions and other factors described in this
section. As part of his separation agreement, Mr. Schwartz
was paid a cash bonus for 2008 at 80% of his original target
level which, at the time of his resignation in November 2008,
was representative of the levels being considered by the
compensation committee with respect to the target bonus
recommendations for all named executive officers and other key
employees for 2008.
|
In considering the cash bonus awards for 2008, the compensation
committee considered subjectively the various factors described
in this analysis, as well as a range of potential payouts. In
their discussions in December 2008, the compensation committee
considered possible bonus payouts, including awarding no
discretionary bonuses for 2008, due to the significant decline
in the market price of our common shares in late 2008. However,
in December 2008 there were transactions pending, including
the sale of significant portions of our operations in Asia and
debt refinancings, that would positively impact our liquidity
and cash flow in early 2009 and reposition us under our new
business strategy. When the compensation committee met in
February 2009, the positive outcomes of certain of these
transactions were considered and, at that time, the committee
made their bonus awards for 2008. The compensation committee
believes that the reductions in the bonus awards, as compared to
target levels and prior year levels, recognize the
companys financial performance and the negative
performance of our common shares in 2008. However, the
compensation committee believes that payment of some portion of
the target bonus (as opposed to paying no discretionary bonus)
for 2008 appropriately rewards the actions taken by our
executive management in late 2008 to enhance our liquidity and
cash flow and reposition us under our new business strategy for
2009.
|
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|
Equity awards for 2008 were granted in February 2009 to
Messrs. Rakowich, Antenucci, Sullivan, and Nekritz. These
awards consisted entirely of PSAs, in keeping with the
compensation committees philosophy of aligning the
interests of our executives and shareholders and promoting the
sharing of rewards and risks of strategic decision-making. While
the employment agreements with both Mr. Rakowich and
Mr. Antenucci required minimum annual equity awards for
2008 ($3,500,000 for Mr. Rakowich and $1,200,000 for
Mr. Antenucci, see Grants of Plan-Based
Awards in Fiscal Year 2008 Narrative Discussion to
the Summary Compensation Table for Fiscal Year 2008 and the
Grants of Plan-Based Awards in Fiscal Year 2008 Table),
each informed the compensation committee that they would waive
the minimum requirement for 2008. The compensation committee
then granted PSAs for 2008 in the following amounts, (based on a
value of $6.90 per share, which was the closing price of our
common shares on March 23, 2009, the day the performance
goals were communicated to the executives): Mr. Rakowich
(200,000 shares at $1,380,000 value), Mr. Antenucci
(100,000 shares at $690,000 value), Mr. Sullivan
(63,000 shares at $434,700 value), and Mr. Nekritz
(31,500 shares at $217,350 value). After the awards were
granted, Mr. Rakowich informed the compensation committee
that he would not accept his PSA award for 2008.
|
22
The PSAs granted for 2008 can be earned on December 31,
2009, based on both numerical and qualitative goals for both the
company and the individual as discussed under
Compensation Elements for Executive
Officers. Based on the performance relative to these
goals, the named executive officer may earn between 50% and 150%
of the PSAs granted. Once earned, the PSAs will vest ratably on
December 31, 2009, 2010, and 2011, generally should the
executive be in our employ on such dates. DEUs were awarded with
the PSAs and can be earned from the date of grant through the
vesting period, based on the actual amount of PSAs awarded at
the end of the performance period, and will vest under the same
criteria as the underlying PSAs.
For the past several years, our annual equity awards to the
named executive officers were a mix of share options, RSUs, and
performance-based awards in equal thirds. In making the awards
for 2008, the compensation committee changed the types and mix
of the equity awards to: (i) grants of all PSAs to named
executive officers and other key employees and (ii) grants
of all RSUs (with a three-year vesting period) to certain other
eligible employees. No share options or CPSs were awarded as
these types of awards are tied only to our market performance
(share price appreciation in the case of share options and
relative total shareholder return in the case of CPSs). The
compensation committee believes that PSAs more appropriately
support the change in the companys business strategy
because PSAs reward specific financial and strategic performance
at both the company and individual levels, while still aligning
the interests of management with those of shareholders, since
the ultimate award is in the form of common shares. The
inclusion of individual performance goals was deemed necessary
as actions required to reposition the company under the new
business strategy could be dilutive to earnings in the near
term. The compensation committee was also somewhat constrained
in the number of authorized shares available under the 2006
Long-Term Incentive Plan due to previous share issuances under
the plan and the lower market price of our common shares. PSAs
and RSUs were chosen because they require fewer shares to
deliver equivalent target compensation opportunity than share
options. The compensation committee awarded each of the named
executive officers a target level of PSAs that approximated the
number of shares included in their equity awards for previous
years, recognizing that the fair value of the 2008 awards was
significantly below the previous years fair value due to
the decline in our common share price.
|
|
|
|
|
Equity awards for 2008 in the form of contingent performance
units were granted to Mr. Schwartz in March 2008 in
association with his employment agreement. These awards were
tied to specific company performance measured by TSR, as defined
in the agreement, over a performance period ending on
December 12, 2012 and were granted in keeping with the
compensation committees philosophy of aligning the
interests of our executives and shareholders and promoting the
sharing of rewards and risks of strategic decision-making. These
awards were not earned when Mr. Schwartzs employment
with us ended and were cancelled effective December 8, 2008.
|
COMPENSATION
COMMITTEE REPORT
We, the members of the management development and compensation
committee of the board of trustees of ProLogis, have reviewed
and discussed the Compensation Discussion and Analysis set forth
above with the management of the company and, based on such
review and discussion, have recommended to the board of trustees
that the Compensation Discussion and Analysis be included in
this proxy statement and, through incorporation by reference
from this proxy statement, the companys Annual Report on
Form 10-K
for the year ended December 31, 2008.
Management Development and Compensation Committee:
Donald P. Jacobs (Chair)
Stephen L. Feinberg
William D. Zollars
Andrea M. Zulberti
23
SUMMARY
COMPENSATION TABLE FOR FISCAL YEAR 2008*
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|
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|
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All
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|
Name and
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|
|
|
|
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|
|
|
|
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Stock
|
|
|
|
Option
|
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|
|
Other
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
Salary(1)
|
|
|
|
Bonus(1)
|
|
|
|
Awards(2)
|
|
|
|
Awards(2)
|
|
|
|
Compensation(3)
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|
|
Total
|
|
Position
|
|
|
Year
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
(a)
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|
|
(b)
|
|
|
|
(c)
|
|
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|
(d)
|
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(e)
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|
|
|
(f)
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|
|
|
(i)
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|
|
|
(j)
|
|
Walter C. Rakowich**
|
|
|
|
2008
|
|
|
|
$
|
630,000
|
|
|
|
$
|
420,000
|
|
|
|
$
|
9,883,376
|
**
|
|
|
$
|
2,325,461
|
**
|
|
|
$
|
47,368
|
|
|
|
$
|
13,306,205
|
**
|
Chief Executive Officer
|
|
|
|
2007
|
|
|
|
$
|
630,000
|
|
|
|
$
|
1,344,000
|
|
|
|
$
|
2,246,963
|
|
|
|
$
|
664,661
|
|
|
|
$
|
26,375
|
|
|
|
$
|
4,911,999
|
|
|
|
|
|
2006
|
|
|
|
$
|
600,000
|
|
|
|
$
|
1,200,000
|
|
|
|
$
|
1,682,887
|
|
|
|
$
|
520,742
|
|
|
|
$
|
10,632
|
|
|
|
$
|
4,014,261
|
|
Ted R. Antenucci
|
|
|
|
2008
|
|
|
|
$
|
630,000
|
|
|
|
$
|
696,000
|
|
|
|
$
|
4,453,874
|
|
|
|
$
|
362,805
|
|
|
|
$
|
20,699
|
|
|
|
$
|
6,163,378
|
|
President and Chief
|
|
|
|
2007
|
|
|
|
$
|
600,000
|
|
|
|
$
|
1,320,000
|
|
|
|
$
|
3,786,355
|
|
|
|
$
|
238,241
|
|
|
|
$
|
82,436
|
|
|
|
$
|
6,027,032
|
|
Investment Officer
|
|
|
|
2006
|
|
|
|
$
|
552,346
|
|
|
|
$
|
1,200,000
|
|
|
|
$
|
2,012,968
|
|
|
|
$
|
138,247
|
|
|
|
$
|
136,579
|
|
|
|
$
|
4,040,140
|
|
William E. Sullivan***
|
|
|
|
2008
|
|
|
|
$
|
550,000
|
|
|
|
$
|
300,000
|
|
|
|
$
|
728,929
|
|
|
|
$
|
161,852
|
|
|
|
$
|
231,384
|
|
|
|
$
|
1,972,165
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|
Chief Financial Officer
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|
|
|
2007
|
|
|
|
$
|
375,000
|
|
|
|
$
|
800,000
|
|
|
|
$
|
174,992
|
|
|
|
$
|
|
|
|
|
$
|
162,452
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|
|
|
$
|
1,512,444
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|
Edward S. Nekritz
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|
|
|
2008
|
|
|
|
$
|
500,000
|
|
|
|
$
|
200,000
|
|
|
|
$
|
685,748
|
|
|
|
$
|
201,332
|
|
|
|
$
|
16,217
|
|
|
|
$
|
1,603,297
|
|
General Counsel, Secretary,
|
|
|
|
2007
|
|
|
|
$
|
400,000
|
|
|
|
$
|
450,000
|
|
|
|
$
|
570,136
|
|
|
|
$
|
136,403
|
|
|
|
$
|
14,090
|
|
|
|
$
|
1,570,629
|
|
and Head of Global Strategic Risk Management
|
|
|
|
2006
|
|
|
|
$
|
350,000
|
|
|
|
$
|
225,000
|
|
|
|
$
|
574,541
|
|
|
|
$
|
104,918
|
|
|
|
$
|
9,245
|
|
|
|
$
|
1,263,704
|
|
Jeffrey H. Schwartz****
|
|
|
|
2008
|
|
|
|
$
|
987,870
|
|
|
|
$
|
1,600,000
|
|
|
|
$
|
(1,442,977
|
)****
|
|
|
$
|
191,014
|
****
|
|
|
$
|
13,775,219
|
|
|
|
$
|
15,111,126
|
|
Former Chief Executive
|
|
|
|
2007
|
|
|
|
$
|
780,000
|
|
|
|
$
|
1,872,000
|
|
|
|
$
|
2,754,135
|
|
|
|
$
|
1,048,420
|
|
|
|
$
|
145,526
|
|
|
|
$
|
6,600,081
|
|
Officer
|
|
|
|
2006
|
|
|
|
$
|
675,000
|
|
|
|
$
|
1,350,000
|
|
|
|
$
|
1,985,950
|
|
|
|
$
|
630,160
|
|
|
|
$
|
38,168
|
|
|
|
$
|
4,679,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Columns (g) and (h) have been omitted from this
table because they are not applicable.
** Mr. Rakowich was our president and chief operating
officer until November 10, 2008 when, upon the resignation
of Mr. Schwartz, he was appointed as our chief executive
officer. Mr. Rakowich had announced in February 2008 his
planned retirement effective January 1, 2009. Under his
employment agreement, upon his retirement his unvested equity
awards would continue to vest under their original terms as if
he remained our employee. Accordingly, in 2008 we were required,
under generally accepted accounting principles (Statement of
Financial Accounting Standards No. 123(R)
(FAS 123(R))), to recognize the remaining expense
associated with all of his unvested awards on an accelerated
basis such that these awards would be fully expensed as of
December 31, 2008. Upon Mr. Rakowichs
appointment as our chief executive officer, his service period
was extended past December 31, 2008 and we began to
recognize the amount that had not been expensed as of the date
of his appointment to chief executive officer on a prospective
basis over the remaining original vesting periods.
SFAS 123(R) does not allow us to reverse the accelerated
expense recognition in 2008. Therefore, the summary compensation
table includes $7,123,845 of expense in 2008 for share awards
and share options that are not vested to Mr. Rakowich as of
December 31, 2008 and that will continue to vest under
their original terms in the years 2009, 2010, and 2011.
Accordingly, the expense that we present in our summary
compensation tables and in our consolidated financial statements
will be less by this amount in 2009, 2010, and 2011. Information
in the summary compensation table for 2008 for Mr. Rakowich
as it would have been reflected had we not recognized the
accelerated expense in 2008 under FAS 123R follows.
Adjusted
2008 Compensation for Mr. Rakowich:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Awards
|
|
|
|
Awards
|
|
|
|
Compensation
|
|
|
|
Total
|
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
As Reported
|
|
|
$
|
630,000
|
|
|
|
$
|
420,000
|
|
|
|
$
|
9,883,376
|
|
|
|
$
|
2,325,461
|
|
|
|
$
|
47,368
|
|
|
|
$
|
13,306,205
|
|
Reverse accelerated expense
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
(5,872,294
|
)
|
|
|
$
|
(1,251,551
|
)
|
|
|
$
|
|
|
|
|
$
|
(7,123,845
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted
|
|
|
$
|
630,000
|
|
|
|
$
|
420,000
|
|
|
|
$
|
4,011,082
|
|
|
|
$
|
1,073,910
|
|
|
|
$
|
47,368
|
|
|
|
$
|
6,182,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*** Mr. Sullivan was hired on March 26, 2007.
**** Mr. Schwartzs employment with us ended
effective December 8, 2008. The terms of the agreement with
Mr. Schwartz relating to his separation from ProLogis are
described under Potential Payments Upon
Termination or Change in Control. Under the terms of
Mr. Schwartzs separation agreement, all of his
outstanding unvested share options and share awards were either
forfeited or cancelled as of December 8, 2008. As a result,
the expense associated with the forfeited and/or cancelled
awards previously recognized in 2008 was reversed.
(1) The
bonuses earned for a fiscal year are paid in the subsequent
fiscal year, generally within the first two months (e.g., the
bonuses earned for 2008 were paid in February 2009). The amounts
presented in columns (c) and (d) include the amount,
if any, of the named executive officers salary and bonus,
respectively, for which payment was deferred at their election.
The following table presents the amounts in columns (c) and
(d) that each of the named executive officers deferred
under the 401(k) Plan, the NSP, or other deferral
24
arrangement in 2008, 2007 and 2006.
See further discussion under Nonqualified
Deferred Compensation in Fiscal Year 2008 below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k) Plan
|
|
|
NSP
|
|
|
Other
|
|
|
|
|
|
|
column (c)
|
|
|
column (c)
|
|
|
column (d)
|
|
|
column (d)
|
Mr. Rakowich
|
|
|
|
2008
|
|
|
|
$
|
18,800
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2007
|
|
|
|
$
|
18,500
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2006
|
|
|
|
$
|
13,200
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
Mr. Antenucci
|
|
|
|
2008
|
|
|
|
$
|
13,800
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2007
|
|
|
|
$
|
13,500
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2006
|
|
|
|
$
|
13,200
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
Mr. Sullivan
|
|
|
|
2008
|
|
|
|
$
|
13,800
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2007
|
|
|
|
$
|
15,500
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
200,000
|
|
Mr. Nekritz
|
|
|
|
2008
|
|
|
|
$
|
13,800
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2007
|
|
|
|
$
|
13,500
|
|
|
|
$
|
100,000
|
|
|
|
$
|
440,728
|
|
|
|
$
|
|
|
|
|
|
|
2006
|
|
|
|
$
|
13,200
|
|
|
|
$
|
70,000
|
|
|
|
$
|
67,500
|
|
|
|
$
|
|
|
Mr. Schwartz
|
|
|
|
2008
|
|
|
|
$
|
13,800
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2007
|
|
|
|
$
|
13,200
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
2006
|
|
|
|
$
|
13,200
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) These
amounts represent the compensation expense that we recognized in
2008, 2007, and 2006 for accounting purposes associated with
each of the named executive officers outstanding PSAs (in
2007 and 2006), CPSs, and RSUs (column (e)) and share options
(column (f)). Information on how the awards are valued for
purposes of computing our accounting expense is included in the
narrative discussion that follows the next table.
Under FAS 123(R), the expense that we recognize over the
performance period is based on the fair value of the target
level of CPSs as of the grant date with no provision to later
adjust the amount expensed based on the performance period
results and the actual amounts earned. The CPSs granted in
December 2005 were valued at $52.77 per share and this value was
expensed in 2008, 2007, and 2006 and is reflected in column (e),
Stock Awards. This presentation does not reflect the actual
value that the named executive officer realized upon receipt of
those awards after the performance period ended on
December 31, 2008. Based on actual performance over the
performance period, the December 2005 CPSs were issued in 2009
at 17.5% of the original target number. Additionally, our common
share price at December 31, 2008 was $13.89 per share. The
amount that is presented as expense in the summary compensation
table over the years 2008, 2007, and 2006 with respect to the
December 2005 CPSs that is in excess of the value of the named
executive officers actual award valued at
December 31, 2008 is:
Mr. Rakowich:
$733,303
Mr. Antenucci: $805,444
Mr. Nekritz: $193,570
Mr. Sullivan was not employed by us in December 2005 and
did not receive a CPS grant. As a result of his resignation,
Mr. Schwartz forfeited his December 2005 CPS award
effective December 8, 2008.
(3) The
amounts in column (i) represent the other compensation
amounts paid to each of the named executive officers in 2008,
2007, and 2006. These amounts include the following items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary Stock
|
|
|
|
|
|
|
|
|
Relocation Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
Tax Offset
|
|
|
|
|
|
|
|
|
|
|
|
Tax Offset
|
|
|
|
|
|
|
|
|
|
|
|
|
Match
|
|
|
Value(a)
|
|
|
Payment
|
|
|
Insurance(b)
|
|
|
Other(c)
|
|
|
Value
|
|
|
Payment
|
|
|
Perquisites(d)
|
|
|
Totals
|
Mr. Rakowich
|
|
|
|
2008
|
|
|
|
$
|
6,900
|
|
|
|
$
|
5,000
|
|
|
|
$
|
3,486
|
|
|
|
$
|
2,334
|
|
|
|
$
|
417
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
29,231
|
|
|
|
$
|
47,368
|
|
|
|
|
|
2007
|
|
|
|
$
|
6,750
|
|
|
|
$
|
4,000
|
|
|
|
$
|
2,788
|
|
|
|
$
|
2,334
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
10,503
|
|
|
|
$
|
26,375
|
|
|
|
|
|
2006
|
|
|
|
$
|
6,600
|
|
|
|
$
|
1,000
|
|
|
|
$
|
698
|
|
|
|
$
|
2,334
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
10,632
|
|
Mr. Antenucci
|
|
|
|
2008
|
|
|
|
$
|
6,900
|
|
|
|
$
|
5,000
|
|
|
|
$
|
3,486
|
|
|
|
$
|
2,303
|
|
|
|
$
|
3,010
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
20,699
|
|
|
|
|
|
2007
|
|
|
|
$
|
6,750
|
|
|
|
$
|
4,000
|
|
|
|
$
|
2,788
|
|
|
|
$
|
1,935
|
|
|
|
$
|
66,963
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
82,436
|
|
|
|
|
|
2006
|
|
|
|
$
|
6,600
|
|
|
|
$
|
1,000
|
|
|
|
$
|
451
|
|
|
|
$
|
2,334
|
|
|
|
$
|
108,848
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
17,346
|
|
|
|
$
|
136,579
|
|
Mr. Sullivan
|
|
|
|
2008
|
|
|
|
$
|
6,900
|
|
|
|
$
|
5,000
|
|
|
|
$
|
2,255
|
|
|
|
$
|
2,334
|
|
|
|
$
|
138,670
|
|
|
|
$
|
72,716
|
|
|
|
$
|
3,509
|
|
|
|
$
|
|
|
|
|
$
|
231,384
|
|
|
|
|
|
2007
|
|
|
|
$
|
6,750
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
1,706
|
|
|
|
$
|
|
|
|
|
$
|
108,660
|
|
|
|
$
|
45,336
|
|
|
|
$
|
|
|
|
|
$
|
162,452
|
|
Mr. Nekritz
|
|
|
|
2008
|
|
|
|
$
|
6,900
|
|
|
|
$
|
5,000
|
|
|
|
$
|
2,255
|
|
|
|
$
|
2,062
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
16,217
|
|
|
|
|
|
2007
|
|
|
|
$
|
6,750
|
|
|
|
$
|
4,000
|
|
|
|
$
|
1,804
|
|
|
|
$
|
1,536
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
14,090
|
|
|
|
|
|
2006
|
|
|
|
$
|
6,600
|
|
|
|
$
|
1,000
|
|
|
|
$
|
451
|
|
|
|
$
|
1,194
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
9,245
|
|
Mr. Schwartz
|
|
|
|
2008
|
|
|
|
$
|
6,900
|
|
|
|
$
|
5,000
|
|
|
|
$
|
3,486
|
|
|
|
$
|
2,065
|
|
|
|
$
|
13,577,076
|
|
|
|
$
|
3,092
|
|
|
|
$
|
561
|
|
|
|
$
|
177,039
|
|
|
|
$
|
13,775,219
|
|
|
|
|
|
2007
|
|
|
|
$
|
6,600
|
|
|
|
$
|
4,000
|
|
|
|
$
|
2,788
|
|
|
|
$
|
2,334
|
|
|
|
$
|
118,582
|
|
|
|
$
|
10,945
|
|
|
|
$
|
277
|
|
|
|
$
|
|
|
|
|
$
|
145,526
|
|
|
|
|
|
2006
|
|
|
|
$
|
6,600
|
|
|
|
$
|
1,000
|
|
|
|
$
|
698
|
|
|
|
$
|
2,334
|
|
|
|
$
|
|
|
|
|
$
|
27,190
|
|
|
|
$
|
346
|
|
|
|
$
|
|
|
|
|
$
|
38,168
|
|
|
(a) Periodically, we grant shares of stock in our
subsidiaries to certain of our officers to enable the subsidiary
to meet the ownership requirements for a real estate investment
trust.
(b) Represents premiums paid for life insurance and
accidental death and dismemberment insurance provided to the
employees based on their salary level.
25
(c) Other for 2008 includes the following:
|
|
|
|
|
Mr. Rakowich: Represents tax offset payment associated with
spousal travel for business purposes that is taxed to
Mr. Rakowich.
|
|
|
|
Mr. Antenucci: Represents employer matching contribution
under Mr. Antenuccis non-qualified deferred
compensation plan, which is described under
Nonqualified Deferred Compensation in Fiscal
Year 2008.
|
|
|
|
Mr. Sullivan: Represents: (i) estimated costs
associated with the future sale of his home in Illinois of
$132,500 (discussed below) and (ii) tax offset payment of
$6,170 associated with spousal travel for business purposes that
is taxed to Mr. Sullivan.
|
Under Mr. Sullivans relocation agreement with us, a
relocation firm employed by us purchased
Mr. Sullivans home in Illinois directly from him for
$1,987,500 in June 2008 and is currently marketing the home for
resale at a price of $1,600,000. The purchase price was the
average of two independent appraisals of the home. The $132,500
amount in the table is our estimate of the closing costs and
sales commissions that will ultimately be costs to us related to
the transaction with our relocation firm. The actual cost to us
may differ from this estimate.
In addition, we incurred costs of $20,571 in 2008 associated
with the relocation firms ownership of the home, primarily
insurance, utilities, property taxes, and maintenance. We do not
consider these additional costs, or the future loss on the
ultimate sale of the home, if any, to be compensation to
Mr. Sullivan and have not included such costs in the
summary compensation table.
|
|
|
|
|
Mr. Schwartz: Represents: (i) severance and other
benefits aggregating $13,547,600 and (ii) tax offset
payment of $29,476 associated with spousal travel for business
purposes that is taxed to Mr. Schwartz.
Mr. Schwartzs separation agreement is described at
Potential Payments Upon Termination or Change
in Control.
|
(d) This column represents the aggregate incremental costs
of perquisites or personal benefits received by the named
executive officer. An individual perquisite amount is presented
if the aggregate amount for the individual is $10,000 or more.
Perquisites presented for 2008 include the following:
|
|
|
|
|
Mr. Rakowich: Includes personal legal costs associated with
negotiating his employment agreement, home office equipment and
supplies (including telephone service), costs associated with
annual health examination (including travel), airline travel
club memberships, and certain entertainment expenses generally
associated with other business entertainment activities.
|
|
|
|
Mr. Schwartz: Includes: (i) personal legal costs
associated with negotiating his employment agreement of $74,751;
(ii) certain travel and entertainment expenses generally
associated with other business travel and entertainment
activities of $50,127; (iii) personal use of the company
airplane of $39,881; and other perquisites aggregating $12,280
(comprised of airline travel and personal club memberships, home
office equipment and supplies (including telephone service), and
personal amenities). Our airplane (acquired in early
2008) was used by Mr. Schwartz for certain personal
travel in 2008. This airplane is no longer in use and we are
currently marketing it for sale. The value of
Mr. Schwartzs personal usage is the incremental cost
and was computed on a per mile basis by including the variable
costs (aircraft fuel expenses, supplies and catering, crew
travel expenses, and landing and parking fees). In addition,
during 2008 we owned a one-quarter fractional interest in
another airplane which was not used for personal flights for
Mr. Schwartz or any other employee.
|
GRANTS OF
PLAN-BASED AWARDS IN FISCAL YEAR 2008*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards:
|
|
|
Option Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under
|
|
|
Shares
|
|
|
Securities
|
|
|
Exercise or
|
|
|
|
|
|
|
|
|
|
Equity Incentive Plan Awards
|
|
|
of Stock
|
|
|
Underlying
|
|
|
Base Price of
|
|
|
Grant Date
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units
|
|
|
Options
|
|
|
Option Awards
|
|
|
Fair Value
|
Name
|
|
|
Date(1)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
(a)
|
|
|
(b)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
(l)
|
Walter C. Rakowich**
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,435,000(3
|
)
|
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
$
|
6.87
|
|
|
|
$
|
1,180,000(4
|
)
|
Ted R. Antenucci
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,717,500(3
|
)
|
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
$
|
6.87
|
|
|
|
$
|
590,000(4
|
)
|
William E. Sullivan
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,576,250(3
|
)
|
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
$
|
6.87
|
|
|
|
$
|
885,000(4
|
)
|
Edward S. Nekritz
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,717,500(3
|
)
|
|
|
|
|
11/11/08
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
$
|
6.87
|
|
|
|
$
|
590,000(4
|
)
|
Jeffrey H. Schwartz**
|
|
|
|
3/14/08
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,448,000(5
|
)
|
|
|
|
|
3/14/08
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,365,000(5
|
)
|
|
* Columns (c), (d), and (e) have been omitted from
this table because they are not applicable.
** Mr. Rakowich became our chief executive officer on
November 10, 2008. Previously, Mr. Rakowich was our
president and chief operating officer. Mr. Schwartz
resigned as our chief executive officer on November 10,
2008 and his employment with us ended effective December 8,
2008. The terms of the agreement with Mr. Schwartz relating
to his separation from ProLogis are described under
Potential Payments Upon Termination or Change
in Control.
(1) Annual
awards for fiscal year 2008 were made in February 2009. As such,
they are not included in this table. See
Compensation Discussion and
Analysis 2008 Compensation Decisions.
26
(2) Special
grants of RSUs and share options were made on November 11,
2008 coinciding with the appointment of Mr. Rakowich as our
chief executive officer. The award to Mr. Rakowich was made
to entice him to rescind his planned retirement and accept the
new position. Awards were made to the Messrs. Antenucci,
Sullivan, and Nekritz to ensure continuity at the executive
management level due to uncertainties that accompany a change in
chief executive officer. See Compensation
Discussion and Analysis 2008 Compensation
Decisions.
(3) The
value in column (l) represents the award in column
(i) valued at $6.87 per share, which was the closing price
of our common shares on the date of grant. See additional
discussion of RSUs under Compensation
Discussion and Analysis and in the narrative discussion
that follows these footnotes.
(4) The
value in column (l) represents the award in column
(j) valued at $2.36 per share, which is based on the
Black-Scholes pricing model. See additional discussion of share
options under Compensation Discussion and
Analysis and in the narrative discussion that follows
these footnotes.
(5) Represents
contingent performance units granted to Mr. Schwartz under
the terms of his employment agreement dated March 14, 2008.
The target award in column (g) represents the base number
of shares that can be issued based on the performance criteria
established for the grant. The amount in column
(l) represents the maximum number of shares that can be
earned in column (h) valued at $22.24 (200,000 grant) and
$23.65 (100,000 grant). These values were determined using the
Monte Carlo pricing model and the following assumptions: common
share price of $54.29, volatility rate of 24.97%, risk-free
interest rate of 2.41%, and dividend yield of 3.34%. These
awards were not earned when Mr. Schwartzs employment
with us ended and were cancelled effective December 8,
2008. No expense was recognized by the company in 2008
associated with this grant.
Narrative
Discussion to the Summary Compensation Table for Fiscal Year
2008 and the Grants of Plan-Based Awards in Fiscal Year 2008
Table.
The Summary Compensation Table for Fiscal Year 2008 presents the
compensation expense that we recognized for each of the years
2008, 2007, and 2006 associated with equity awards and share
options granted to our named executive officers. Below, we
present information on how the fair values of the various awards
used to compute the compensation expense in the table were
determined. Under SEC rules, we deducted from the amounts shown
in the table any amounts previously disclosed as compensation
expense with respect to awards or portions of awards that were
cancelled
and/or
forfeited in connection with Mr. Schwartzs
resignation in 2008.
Share Options. Options to purchase our common shares are
valued using the Black-Scholes pricing model. The expense for
2008 includes a portion of the fair values of share options that
were granted in each of the years 2004 through 2008. The expense
for 2007 includes a portion of the fair values of share options
that were granted in each of the years 2003 through 2006. The
expense for 2006 includes a portion of the fair values of share
options that were granted in each of the years 2002 through
2005. The fair values and the assumptions used in the
Black-Scholes pricing model to determine the fair values
generating the compensation expense for the applicable years are
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Black-Scholes
Assumptions
|
|
|
|
|
|
|
|
|
|
Risk-Free
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
Fair
|
|
|
Interest
|
|
|
Dividend
|
|
|
Volatility
|
|
|
Weighted Average
|
|
|
|
Date
|
|
|
Value
|
|
|
Rate
|
|
|
Yield
|
|
|
Rate
|
|
|
Option Life
|
2008 Awards
|
|
|
|
November 2008
|
|
|
|
$
|
2.36
|
|
|
|
|
2.56
|
%
|
|
|
|
1.92
|
%
|
|
|
|
40.35
|
%
|
|
|
|
5.8 years
|
|
2007 Awards
|
|
|
|
December 2007
|
|
|
|
$
|
11.41
|
|
|
|
|
3.77
|
%
|
|
|
|
3.44
|
%
|
|
|
|
23.45
|
%
|
|
|
|
5.8 years
|
|
2006 Awards
|
|
|
|
December 2006
|
|
|
|
$
|
10.42
|
|
|
|
|
4.50
|
%
|
|
|
|
3.40
|
%
|
|
|
|
19.43
|
%
|
|
|
|
5.8 years
|
|
|
|
|
|
September and
|
|
|
|
$
|
6.92 to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
Awards(a)
|
|
|
|
December 2005
|
|
|
|
$
|
7.49
|
|
|
|
|
4.33
|
%
|
|
|
|
3.92
|
%
|
|
|
|
20.33
|
%
|
|
|
|
5.9 years
|
|
2004 Awards
|
|
|
|
September 2004
|
|
|
|
$
|
5.09
|
|
|
|
|
3.82
|
%
|
|
|
|
4.27
|
%
|
|
|
|
20.52
|
%
|
|
|
|
6.25 years
|
|
2003 Awards
|
|
|
|
September 2003
|
|
|
|
$
|
4.21
|
|
|
|
|
3.53
|
%
|
|
|
|
4.18
|
%
|
|
|
|
20.14
|
%
|
|
|
|
6.25 years
|
|
2002 Awards
|
|
|
|
September 2002
|
|
|
|
$
|
2.47
|
|
|
|
|
3.04
|
%
|
|
|
|
5.68
|
%
|
|
|
|
20.55
|
%
|
|
|
|
6.25 years
|
|
2002 Award to Mr. Schwartz
|
|
|
|
March 2002
|
|
|
|
$
|
2.67
|
|
|
|
|
5.09
|
%
|
|
|
|
6.19
|
%
|
|
|
|
20.18
|
%
|
|
|
|
6.25 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The Black-Scholes assumptions are a
weighted average of the two grants in 2005.
|
27
Amounts included in Summary Compensation Table the
following table provides the total compensation expense that was
recognized by us with respect to share options for each named
executive officer in 2008, 2007, and 2006 (share options are
generally expensed over the service or vesting periods).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Options
|
|
|
|
|
|
|
Expense
|
|
|
Number
|
|
|
Values (per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Rakowich
|
|
|
|
2008
|
|
|
|
$
|
2,325,461
|
|
|
|
|
930,336
|
|
|
|
$
|
2.36 to $11.41
|
|
|
|
|
|
2007
|
|
|
|
$
|
664,661
|
|
|
|
|
425,012
|
|
|
|
$
|
4.21 to $10.42
|
|
|
|
|
|
2006
|
|
|
|
$
|
520,742
|
|
|
|
|
420,912
|
|
|
|
$
|
2.47 to $7.49
|
|
Mr. Antenucci
|
|
|
|
2008
|
|
|
|
$
|
362,805
|
|
|
|
|
403,399
|
|
|
|
$
|
2.36 to $11.41
|
|
|
|
|
|
2007
|
|
|
|
$
|
238,241
|
|
|
|
|
118,349
|
|
|
|
$
|
6.92 and $10.42
|
|
|
|
|
|
2006
|
|
|
|
$
|
138,247
|
|
|
|
|
80,000
|
|
|
|
$
|
6.92
|
|
Mr. Sullivan
|
|
|
|
2008
|
|
|
|
$
|
161,852
|
|
|
|
|
418,813
|
|
|
|
$
|
2.36 and $11.41
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Nekritz
|
|
|
|
2008
|
|
|
|
$
|
201,332
|
|
|
|
|
335,860
|
|
|
|
$
|
2.36 to $11.41
|
|
|
|
|
|
2007
|
|
|
|
$
|
136,403
|
|
|
|
|
83,953
|
|
|
|
$
|
4.21 to $10.42
|
|
|
|
|
|
2006
|
|
|
|
$
|
104,918
|
|
|
|
|
86,377
|
|
|
|
$
|
2.47 to $7.49
|
|
Mr.
Schwartz(c)
|
|
|
|
2008
|
|
|
|
$
|
191,014
|
|
|
|
|
200,000
|
|
|
|
$
|
5.09
|
|
|
|
|
|
2007
|
|
|
|
$
|
1,048,420
|
|
|
|
|
597,968
|
|
|
|
$
|
4.21 to $10.42
|
|
|
|
|
|
2006
|
|
|
|
$
|
630,160
|
|
|
|
|
491,604
|
|
|
|
$
|
2.47 to $7.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent Performance Shares. CPSs are valued using the
Monte Carlo pricing model. Under this model, historical common
share prices for us and fifty other real estate investment
trusts over a three-year look back period that matches the
vesting period of the award were utilized to generate volatility
rates and to measure the correlation in the pattern of returns
between the entities. Other inputs to the model include the
risk-free interest rate and the length of the performance
period. Utilizing these inputs, the total shareholder returns at
the end of the performance period for us and the fifty
comparison entities were simulated and our ranking in relation
to the other entities was used to determine the projected amount
of CPSs that will be earned and the value of the CPSs upon
issuance. The Monte Carlo model generates a factor that is
scaled to the market price of our common shares on the date of
grant thereby generating the fair value of the award.
The expense for 2008 includes a portion of the fair values of
CPSs that were granted in each of the years 2005, 2006 and 2007.
The expense for 2007 includes a portion of the fair values of
CPSs that were granted in each of the years 2005 and 2006. The
expense for 2006 includes a portion of the fair values of CPSs
that were granted in 2005 and May 2006. The fair values and the
assumptions used in the Monte Carlo pricing model to determine
the fair values generating the compensation expense for the
applicable years are as follows:
2008 Awards: No CPSs were granted to our named executive
officers for 2008.
2007 Awards: CPSs granted to our named executive officers
in December 2007 had a fair value of $71.48 per share. This
fair value is based on the closing price of our common shares on
the date of grant of $60.60 adjusted by a factor of 1.1796.
These awards have a performance period ending on
December 31, 2010. Assumptions used to generate this factor
include a risk-free interest rate of 3.35% and a look back
period ending in December 2007.
2006 Awards: CPSs granted to our named executive officers
in December 2006 had a fair value of $67.71 per share. This
fair value is based on the closing price of our common shares on
the date of grant of $59.92 adjusted by a factor of 1.13. These
awards have a performance period ending on December 31,
2009. Assumptions used to generate this factor include a
risk-free interest rate of 4.64% and a look back period ending
in December 2006. Additionally, 50,000 CPSs were granted to
Mr. Antenucci in May 2006. Of these awards, 25,000 have a
performance period ending on December 31, 2009 (fair value
of $56.05 per share based on the closing price of our common
shares on the date of grant of $49.60 adjusted by a factor of
1.13) and 25,000 have a performance period ending on
December 31, 2010 (fair value of $57.49 per share based on
the closing price of our common shares on the date of grant of
$49.60 adjusted by a factor of 1.159). Assumptions used to
generate the 1.13 factor include a risk-free interest rate of
5.10% and a look back period ending in November 2005.
Assumptions used to generate the 1.159 factor include a
risk-free interest rate of 5.10% and a look back period ending
in April 2006.
28
2005 Awards: CPSs granted to our named executive officers
in December 2005 had a fair value of $52.77 per share. This
fair value is based on the closing price of our common shares on
the date of grant of $46.70 adjusted by a factor of 1.13. These
awards had a performance period that ended on December 31,
2008. Assumptions used to generate the 1.13 factor include a
risk-free interest rate of 5.10% and a look back period ending
in November 2005.
Restricted Share Units and Performance Share Awards. RSUs
and PSAs are valued based on the market price of our common
shares on the date the awards are granted with the value
included in compensation expense over the applicable service
period
and/or
performance period, generally the vesting period. Generally, the
closing price on the date of grant is used to value the awards.
However, in 2006 the RSUs granted were generally valued at the
average of the high and low trading prices on the date of grant.
Amounts included in Summary Compensation Table the
following table provides the total compensation expense that was
recognized by us with respect to CPS, RSUs, and PSAs for each
named executive officer in 2008, 2007, and 2006 (share awards
are generally expensed over the vesting
and/or
performance periods).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPSs
|
|
|
RSUs
|
|
|
PSAs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Values
|
|
|
|
|
|
|
|
|
|
|
Values
|
|
|
|
|
|
|
|
|
|
|
Values
|
|
|
Total
|
|
|
|
|
|
|
|
Expense
|
|
|
|
Number
|
|
|
|
(per share)
|
|
|
Expense
|
|
|
|
Number
|
|
|
|
(per share)
|
|
|
Expense
|
|
|
|
Number
|
|
|
|
(per share)
|
|
|
Expense
|
|
Mr. Rakowich
|
|
|
2008
|
|
|
$
|
1,742,271
|
|
|
|
|
42,751
|
|
|
|
$52.77 and $71.48
|
|
|
$
|
8,141,105
|
|
|
|
|
647,689
|
|
|
|
$6.87 to $70.95
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,883,376
|
|
|
|
|
2007
|
|
|
$
|
550,980
|
|
|
|
|
27,626
|
|
|
|
$52.77 and $67.71
|
|
|
$
|
1,065,533
|
|
|
|
|
162,559
|
|
|
|
$32.09 to $70.95
|
|
|
$
|
630,450
|
|
|
|
|
27,000
|
|
|
|
$46.70
|
|
|
$
|
2,246,963
|
|
|
|
|
2006
|
|
|
$
|
256,238
|
|
|
|
|
14,567
|
|
|
|
$52.77
|
|
|
$
|
406,229
|
|
|
|
|
44,567
|
|
|
|
$32.09 and $45.46
|
|
|
$
|
1,020,420
|
|
|
|
|
45,000
|
|
|
|
$43.33 and $46.70
|
|
|
$
|
1,682,887
|
|
Mr. Antenucci
|
|
|
2008
|
|
|
$
|
1,293,799
|
|
|
|
|
79,268
|
|
|
|
$52.77 and $71.48
|
|
|
$
|
3,160,075
|
|
|
|
|
513,270
|
|
|
|
$6.87 to $66.43
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,453,874
|
|
|
|
|
2007
|
|
|
$
|
1,136,535
|
|
|
|
|
72,668
|
|
|
|
$52.77 to $67.71
|
|
|
$
|
2,276,220
|
|
|
|
|
256,668
|
|
|
|
$49.60 to $66.43
|
|
|
$
|
373,600
|
|
|
|
|
16,000
|
|
|
|
$46.70
|
|
|
$
|
3,786,355
|
|
|
|
|
2006
|
|
|
$
|
692,459
|
|
|
|
|
66,000
|
|
|
|
$52.77 to $57.49
|
|
|
$
|
946,909
|
|
|
|
|
150,000
|
|
|
|
$49.60
|
|
|
$
|
373,600
|
|
|
|
|
16,000
|
|
|
|
$46.70
|
|
|
$
|
2,012,968
|
|
Mr. Sullivan
|
|
|
2008
|
|
|
$
|
196,580
|
|
|
|
|
8,250
|
|
|
|
$71.48
|
|
|
$
|
532,349
|
|
|
|
|
401,764
|
|
|
|
$6.87 to $64.82
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
728,929
|
|
|
|
|
2007
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
174,992
|
|
|
|
|
18,512
|
|
|
|
$64.82
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
174,992
|
|
Mr. Nekritz
|
|
|
2008
|
|
|
$
|
234,899
|
|
|
|
|
11,026
|
|
|
|
$52.77 and $71.48
|
|
|
$
|
450,849
|
|
|
|
|
286,027
|
|
|
|
$6.87 and $60.60
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
685,748
|
|
|
|
|
2007
|
|
|
$
|
136,609
|
|
|
|
|
6,901
|
|
|
|
$52.77 and $67.71
|
|
|
$
|
316,777
|
|
|
|
|
31,901
|
|
|
|
$45.46 and $59.92
|
|
|
$
|
116,750
|
|
|
|
|
5,000
|
|
|
|
$46.70
|
|
|
$
|
570,136
|
|
|
|
|
2006
|
|
|
$
|
67,635
|
|
|
|
|
3,845
|
|
|
|
$52.77
|
|
|
$
|
270,998
|
|
|
|
|
28,845
|
|
|
|
$45.46
|
|
|
$
|
235,908
|
|
|
|
|
10,500
|
|
|
|
$43.33 and $46.70
|
|
|
$
|
574,541
|
|
Mr. Schwartz
|
|
|
2008
|
|
|
$
|
(1,442,977
|
)
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,442,977
|
)
|
|
|
|
2007
|
|
|
$
|
1,069,552
|
|
|
|
|
52,072
|
|
|
|
$52.77 and $67.71
|
|
|
$
|
984,083
|
|
|
|
|
87,072
|
|
|
|
$32.09 to $59.92
|
|
|
$
|
700,500
|
|
|
|
|
30,000
|
|
|
|
$46.70
|
|
|
$
|
2,754,135
|
|
|
|
|
2006
|
|
|
$
|
373,425
|
|
|
|
|
21,229
|
|
|
|
$52.77
|
|
|
$
|
522,055
|
|
|
|
|
56,229
|
|
|
|
$32.09 and $45.46
|
|
|
$
|
1,090,470
|
|
|
|
|
48,000
|
|
|
|
$43.33 and $46.70
|
|
|
$
|
1,985,950
|
|
|
We have employment agreements with Mr. Rakowich and
Mr. Antenucci. We entered into an employment agreement with
Mr. Schwartz in March 2008 that was effective as of
January 1, 2008. Mr. Schwartz resigned as our chief
executive officer on November 10, 2008 and his employment
with us ended effective December 8, 2008. Upon his
separation, Mr. Schwartz received payments in accordance
with this agreement.
Mr. Rakowichs Employment Agreement. Our
original employment agreement with Mr. Rakowich was entered
into on September 19, 2007 and was amended and restated on
February 6, 2008. In February 2008, Mr. Rakowich
announced his plan to retire as our president and chief
operating officer effective January 1, 2009.
Mr. Rakowich was named our chief executive officer on
November 10, 2008 upon the resignation of
Mr. Schwartz. To entice Mr. Rakowich to rescind his
retirement and accept the position of chief executive officer,
the board offered Mr. Rakowich substantially the same
annual compensation package that had been included in
Mr. Schwartzs employment agreement entered into in
March 2008, with the primary difference being that
Mr. Rakowich was issued RSUs and share options in November
2008 having an aggregate fair value at the grant date of
$4,615,000 in lieu of the contingent performance unit awards
contained in Mr. Schwartzs agreement. Accordingly, we
entered into the Second Amended and Restated Employment
Agreement with Mr. Rakowich (the 2008 Agreement), which was
amended and restated on January 9, 2009. The Third Amended
and Restated Employment Agreement (the 2009 Agreement) changed
the 2008 Agreement only with respect to provisions relating to
the amount of his annual equity awards and certain donations to
the ProLogis Foundation.
The 2009 Agreement is effective through December 31, 2011
and provides that Mr. Rakowich will:
|
|
|
|
|
receive an annual base salary for 2008 of $630,000 and, for 2009
and through the remaining term of the agreement, receive an
annual base salary of $1,000,000;
|
|
|
|
receive a target bonus for 2008 of $840,000 and, beginning in
2009 and through the remaining term of the agreement, be
eligible for a target bonus of up to 200% of his annual base
salary with the actual amount
|
29
|
|
|
|
|
of the bonus received, as a percentage of the target, to be
between zero and 200% based on the satisfaction of goals and
objectives to be established for each period; in light of
current economic conditions, Mr. Rakowich agreed to receive
a cash bonus of $420,000 or 50% of the target level for 2008;
|
|
|
|
|
|
be entitled to a grant of equity-based awards under our 2006
Long-Term Incentive Plan for 2008 having an aggregate value of
at least $3,500,000; in light of current economic conditions,
Mr. Rakowich agreed to accept a grant that was less than
this amount and, in February 2009, the compensation
committee made a grant of equity awards to Mr. Rakowich for 2008
valued at $1,380,000; Mr. Rakowich subsequently informed
the compensation committee that he would not accept the award
for 2008;
|
|
|
|
be entitled to grants of equity-based awards under our 2006
Long-Term Incentive Plan for 2009, 2010, and 2011 having an
annual aggregate value of at least $7,500,000 and, if such
awards are granted, Mr. Rakowich is required to make an
annual contribution to the ProLogis Foundation equal to 15% of
such award value payable after the time the award vests or
within 12 months of receipt if the award is paid in cash;
|
|
|
|
be entitled to professional fees incurred to negotiate the 2009
Agreement in an amount not to exceed $100,000; and
|
|
|
|
be eligible to participate in our employee benefit plans made
available to similarly situated senior management employees.
|
The 2009 Agreement also sets forth the terms for the special
grant of RSUs and share options with an aggregate fair value at
issuance of $4,615,000 that Mr. Rakowich received in
November 2008 upon appointment as our chief executive officer
and provides for special vesting terms for certain awards. The
special vesting terms allow for the continuation of original
vesting terms for unvested share awards after
Mr. Rakowichs termination as if he had remained our
employee until such time as all awards have vested under the
following circumstances:
|
|
|
|
|
for awards made after January 7, 2009 and for the special
awards made in November 2008, if Mr. Rakowich is terminated
by us within the term of the agreement for other than cause,
including upon a change in control, or upon his death or
disability, as further described under
Potential Payments Upon Termination or Change
in Control,
|
|
|
|
for awards in effect prior to January 7, 2009, other than
the special awards made in November 2008, if Mr. Rakowich
remains continuously employed by us through December 31,
2009 or if he is terminated by us within the term of the
agreement for other than cause, including upon a change in
control, or upon his death or disability, as further described
under Potential Payments Upon Termination or
Change in Control.
|
Additionally, the 2009 Agreement contains provisions with
respect to recovery of amounts earned by Mr. Rakowich to
the extent that the amount earned was based on satisfaction of
goals and objectives that were impacted by any material
financial statement restatements or modifications and also
provides for excise tax
gross-up
payments with respect to certain payments required under the
agreement under certain circumstances. Mr. Rakowichs
previous employment agreements with us provided for the granting
of special equity-based awards to him
and/or have
modified certain vesting provisions of existing awards. Such
awards and these modified terms are included in the applicable
tables in this proxy statement and, as applicable, have been
included in previous proxy statements.
Mr. Antenuccis Employment Agreement.
Mr. Antenuccis employment agreement was amended
and restated as of December 31, 2008, to comply with
applicable federal tax law changes with respect to deferred
compensation. The term of the employment agreement with
Mr. Antenucci ends on December 31, 2012 and provides
for automatic one-year extensions of the term unless we, or
Mr. Antenucci, give notice of non-renewal at least three
months prior to the last day of the then-current term.
30
The employment agreement further provides that
Mr. Antenucci will:
|
|
|
|
|
receive a minimum annual base salary of $630,000;
|
|
|
|
be eligible for an annual target bonus of $870,000, with the
actual amount of the bonus earned based on the satisfaction of
applicable goals and objectives, but in no case less than 80% of
the annual target bonus amount; Mr. Antenuccis bonus
for 2008 was $696,000 based on the minimum 80% level established
in the agreement;
|
|
|
|
for each
12-month
period during the agreement, be entitled to grants of
equity-based awards under our 2006 Long-Term Incentive Plan
having an annual aggregate value of $1,200,000; however, in
light of current economic conditions, he agreed to receive an
actual award for 2008 valued at $690,000 and such award was
granted in February 2009; and
|
|
|
|
be eligible to participate in our employee benefit plans made
available to similarly situated senior management employees.
|
Additionally, Mr. Antenuccis agreement provides for
excise tax
gross-up
payments with respect to certain payments required under the
agreement under certain circumstances and accelerated vesting of
unvested share awards, under certain limited circumstances,
including certain events of termination and upon a change in
control as described under Potential Payments
Upon Termination or Change in Control.
Mr. Antenuccis previous employment agreements with us
have provided for the granting of special equity-based awards to
him. Such awards are included in the applicable tables in this
proxy statement and, as applicable, have been included in
previous proxy statements.
Mr. Schwartzs Employment Agreement. On
March 14, 2008, we entered into an employment agreement
with Mr. Schwartz. The agreement was effective as of
January 1, 2008. The term of the employment agreement was
through December 31, 2012. The employment agreement
provided for Mr. Schwartzs employment as our chief
executive officer, a minimum salary of $1,000,000, and specified
parameters for the awarding of his annual bonus and equity-based
awards. Additionally, he was awarded 300,000 contingent
performance units in March 2008 with performance periods through
December 12, 2012. The agreement contained limitations on
the total amount of compensation that could be deliverable under
the agreement and post-employment restrictive covenants to
protect shareholders.
Mr. Schwartz resigned as our chief executive officer on
November 10, 2008 and his employment with us ended
effective December 8, 2008. Upon his separation he
received, or is entitled to receive, certain payments which are
included in his 2008 compensation in the summary compensation
table and are discussed further under
Potential Payments Upon Termination or Change
in Control. Also, Mr. Schwartz forfeited all of his
unvested and unearned equity-based awards outstanding (share
options, RSUs, CPSs, and associated DEUs). The contingent
performance units awarded under Mr. Schwartzs
employment agreement in March 2008 were not earned when his
employment with us ended and were cancelled on December 8,
2008. Mr. Schwartz is subject to limited non-competition
and non-solicitation covenants for a period of one year, ending
on December 8, 2009.
31
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END (DECEMBER 31, 2008)*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards(1)
|
|
|
|
Option
Awards(1)
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Plan Awards:
|
|
|
Plan Awards:
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Number of
|
|
|
Market or Payout
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Unearned
|
|
|
Value of Unearned
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
Shares, Units or
|
|
|
Shares, Units or
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Other Rights
|
|
|
Other Rights
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
That Have
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested(2)
|
|
|
Not Vested
|
|
|
Not
Vested(2)
|
Name
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
Walter C. Rakowich**
|
|
|
|
1
|
|
|
|
|
|
|
|
|
$
|
18.63
|
|
|
|
|
9/15/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
$
|
24.25
|
|
|
|
|
9/14/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,000
|
|
|
|
|
|
|
|
|
$
|
34.93
|
|
|
|
|
9/23/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,934
|
|
|
|
|
24,978
|
(3)
|
|
|
$
|
45.46
|
|
|
|
|
12/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,550
|
|
|
|
|
37,550
|
(4)
|
|
|
$
|
59.92
|
|
|
|
|
12/21/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,081
|
|
|
|
|
60,243
|
(5)
|
|
|
$
|
60.60
|
|
|
|
|
12/18/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
|
375,000
|
(6)
|
|
|
$
|
6.87
|
|
|
|
|
11/11/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,839
|
(7)
|
|
|
$
|
53,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,907
|
(8)
|
|
|
$
|
95,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,973
|
(9)
|
|
|
$
|
55,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79,087
|
(10)
|
|
|
$
|
1,098,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,880
|
(11)
|
|
|
$
|
165,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
379,404
|
(12)
|
|
|
$
|
5,269,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,065
|
(13)
|
|
|
$
|
195,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,835
|
(14)
|
|
|
$
|
219,948
|
|
Ted R. Antenucci
|
|
|
|
60,000
|
|
|
|
|
20,000
|
(15)
|
|
|
$
|
45.29
|
|
|
|
|
9/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,175
|
|
|
|
|
19,174
|
(4)
|
|
|
$
|
59.92
|
|
|
|
|
12/21/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,763
|
|
|
|
|
26,287
|
(5)
|
|
|
$
|
60.60
|
|
|
|
|
12/18/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
(6)
|
|
|
$
|
6.87
|
|
|
|
|
11/11/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,918
|
(16)
|
|
|
$
|
2,276,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,527
|
(8)
|
|
|
$
|
48,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,449
|
(17)
|
|
|
$
|
1,464,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,184
|
(11)
|
|
|
$
|
72,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
252,936
|
(12)
|
|
|
$
|
3,513,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,320
|
(18)
|
|
|
$
|
379,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,320
|
(19)
|
|
|
$
|
379,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,182
|
(13)
|
|
|
$
|
99,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,910
|
(14)
|
|
|
$
|
95,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards(1)
|
|
|
|
Option
Awards(1)
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Plan Awards:
|
|
|
Plan Awards:
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Number of
|
|
|
Market or Payout
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Unearned
|
|
|
Value of Unearned
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
Shares, Units or
|
|
|
Shares, Units or
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Other Rights
|
|
|
Other Rights
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
That Have
|
|
|
That Have
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested(2)
|
|
|
Not Vested
|
|
|
Not
Vested(2)
|
Name
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
William E. Sullivan
|
|
|
|
10,954
|
|
|
|
|
32,859
|
(5)
|
|
|
$
|
60.60
|
|
|
|
|
12/18/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
(6)
|
|
|
$
|
6.87
|
|
|
|
|
11/11/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,849
|
(20)
|
|
|
$
|
206,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,480
|
(11)
|
|
|
$
|
90,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
379,404
|
(12)
|
|
|
$
|
5,269,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,638
|
(14)
|
|
|
$
|
119,982
|
|
Edward S. Nekritz
|
|
|
|
16,107
|
|
|
|
|
|
|
|
|
$
|
18.63
|
|
|
|
|
9/15/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,362
|
|
|
|
|
|
|
|
|
$
|
24.25
|
|
|
|
|
9/14/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,820
|
|
|
|
|
|
|
|
|
$
|
20.68
|
|
|
|
|
9/19/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
$
|
24.76
|
|
|
|
|
9/26/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
$
|
30.00
|
|
|
|
|
9/25/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
$
|
34.93
|
|
|
|
|
9/23/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,783
|
|
|
|
|
6,594
|
(3)
|
|
|
$
|
45.46
|
|
|
|
|
12/20/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,788
|
|
|
|
|
8,788
|
(4)
|
|
|
$
|
59.92
|
|
|
|
|
12/21/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,477
|
|
|
|
|
16,430
|
(5)
|
|
|
$
|
60.60
|
|
|
|
|
12/18/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
(6)
|
|
|
$
|
6.87
|
|
|
|
|
11/11/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,713
|
(21)
|
|
|
$
|
384,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,110
|
(7)
|
|
|
$
|
15,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,616
|
(8)
|
|
|
$
|
22,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,239
|
(11)
|
|
|
$
|
44,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
252,936
|
(12)
|
|
|
$
|
3,513,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,291
|
(13)
|
|
|
$
|
45,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,319
|
(14)
|
|
|
$
|
59,991
|
|
Jeffrey H. Schwartz**
|
|
|
|
67,114
|
|
|
|
|
|
|
|
|
$
|
18.63
|
|
|
|
|
9/15/09(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
$
|
22.98
|
|
|
|
|
3/18/12(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,000
|
|
|
|
|
|
|
|
|
$
|
24.76
|
|
|
|
|
9/26/12(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
$
|
30.00
|
|
|
|
|
9/25/13(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
$
|
34.93
|
|
|
|
|
9/23/14(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,802
|
|
|
|
|
|
|
|
|
$
|
45.46
|
|
|
|
|
12/20/15(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,341
|
|
|
|
|
|
|
|
|
$
|
59.92
|
|
|
|
|
12/21/16(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Column
(d) has been omitted from this table because it is not
applicable.
** Mr. Rakowich
became our chief executive officer on November 10, 2008.
Previously, Mr. Rakowich was our president and chief
operating officer. Mr. Schwartz resigned as our chief
executive officer on November 10, 2008 and his employment
with us ended effective December 8, 2008. The terms of the
agreement with Mr. Schwartz relating to his separation from
ProLogis are described under Potential
Payments Upon Termination or Change in Control.
(1) Generally,
the terms of our grant agreements provide that vesting will
occur on specified dates if the holder of the award is in our
employ as of such dates. Mr. Rakowichs employment
agreement (discussed under Grants of
Plan-Based Awards in Fiscal Year 2008 Narrative
Discussion to the Summary Compensation Table for Fiscal Year
2008 and the Grants of Plan-Based Awards in Fiscal Year 2008
Table) provides for special vesting terms under certain
circumstances. These special vesting terms apply to unvested
share options and share awards and generally will allow for the
continuation of the original vesting terms after
Mr. Rakowichs employment with us ends, as if he had
remained our employee, until such time as the awards have
vested. With respect to Mr. Rakowichs unexercisable
option awards (column (c)) and unvested stock awards (columns
(g) and (i)), other than the special grants awarded in
November 2008, these special vesting provisions will generally
apply if Mr. Rakowich is continuously employed by us
through December 31, 2009.
(2) Dollar
amounts are based on the closing price of our common shares on
December 31, 2008 of $13.89 per share.
33
(3) Will
generally vest and become exercisable on December 20, 2009.
(4) Will
generally vest and become exercisable in equal amounts on each
of December 21, 2009 and 2010.
(5) Will
generally vest and become exercisable in equal amounts on each
of December 18, 2009, 2010, and 2011.
(6) Represents
special grant on November 11, 2008 coinciding with the
appointment of Mr. Rakowich as our chief executive officer.
Mr. Rakowichs share options will generally vest and
become exercisable in equal amounts on each of December 31,
2009, 2010, and 2011. The options granted to
Messrs. Antenucci, Sullivan, and Nekritz will generally
vest and become exercisable in equal amounts on each of
November 11, 2009, 2010, 2011, and 2012. The award to
Mr. Rakowich was made to entice him to rescind his planned
retirement and accept the new position. Awards were made to
Messrs. Antenucci, Sullivan, and Nekritz to ensure
continuity at the executive management level due to
uncertainties that accompany a change in chief executive
officer. See Compensation Discussion and
Analysis 2008 Compensation Decisions.
(7) RSUs
and associated accrued DEUs will generally vest on
December 20, 2009.
(8) RSUs
and associated accrued DEUs will generally vest in equal amounts
on each of December 21, 2009 and 2010.
(9) RSUs
and associated accrued DEUs will generally vest in equal amounts
on each of February 21, 2009, 2010, and 2011.
(10) RSUs
and associated accrued DEUs will generally vest in equal amounts
on each of December 31, 2009 and 2010.
(11) RSUs
and associated accrued DEUs will generally vest in equal amounts
on each of December 18, 2009, 2010, and 2011.
(12) Represents
special grant of RSUs and associated DEUs on November 11,
2008 coinciding with the appointment of Mr. Rakowich as our
chief executive officer. Mr. Rakowichs awards will
generally vest in equal amounts on each of December 31,
2009, 2010, and 2011. The awards granted to
Messrs. Antenucci, Sullivan, and Nekritz will generally
vest in equal amounts on each of November 11, 2009, 2010,
2011, and 2012. The award to Mr. Rakowich was made to
entice him to rescind his planned retirement and accept the new
position. Awards were made to Messrs. Antenucci, Sullivan,
and Nekritz to ensure continuity at the executive management
level due to uncertainties that accompany a change in chief
executive officer. See Compensation Discussion
and Analysis 2008 Compensation Decisions.
(13) Represents
the target amount of CPSs and associated accrued DEUs that can
be earned should our common shares meet a certain specified
performance criteria over a three-year performance period
beginning on January 1, 2007 and ending on
December 31, 2009 (as more fully described in
Compensation Discussion and Analysis).
The named executive officer can earn between zero and two times
the target amount.
(14) Represents
the target amount of CPSs and associated accrued DEUs that can
be earned should our common shares meet a certain specified
performance criteria over a three-year performance period
beginning on January 1, 2008 and ending on
December 31, 2010 (as more fully described in
Compensation Discussion and Analysis).
The named executive officer can earn between zero and two times
the target amount.
(15) Will
vest and become exercisable on September 15, 2009.
(16) RSUs
and associated accrued DEUs will vest on December 31, 2010.
(17) RSUs
and associated accrued DEUs will vest on December 31, 2012.
(18) Represents
the target amount of CPSs and associated accrued DEUs that can
be earned by Mr. Antenucci should our common shares meet a
certain specified performance criteria over a performance period
beginning on May 26, 2006 and ending on December 31,
2009 (as more fully described in Compensation
Discussion and Analysis). Mr. Antenucci can earn
between zero and two times the target amount.
(19) Represents
the target amount of CPSs and associated accrued DEUs that can
be earned by Mr. Antenucci should our common shares meet a
certain specified performance criteria over a performance period
beginning on May 26, 2006 and ending on December 31,
2010 (as more fully described in Compensation
Discussion and Analysis). Mr. Antenucci can earn
between zero and two times the target amount.
(20) RSUs
and associated accrued DEUs will vest in equal amounts on each
of May 15, 2009, 2010, and 2011.
(21) RSUs
and associated accrued DEUs will vest on December 31, 2010.
(22) Under
the terms of Mr. Schwartzs separation agreement, all
of his vested options as of December 8, 2008 will remain
outstanding through their original expiration date in shown in
column (f). The terms of Mr. Schwartzs separation
agreement are discussed further under
Potential Payments Upon Termination or Change
in Control.
34
OPTION EXERCISES
AND STOCK VESTED IN FISCAL YEAR 2008
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Option Awards
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Stock Awards
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Number of
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Value
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Number of
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Value
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Shares
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Realized
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Shares
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Realized
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Acquired on
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On
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Acquired on
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On
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Exercise
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Exercise
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Vesting
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Vesting
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Name
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(#)
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($)
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(#)
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($)
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(a)
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(b)
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(c)
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(d)
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(e)
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Walter C. Rakowich*
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273,847
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(1)
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$
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9,752,575
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(1)
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173,313
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(2)
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$
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3,252,190
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(2)
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Ted R. Antenucci
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$
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6,692
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(2)
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$
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75,287
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(2)
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William E. Sullivan
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$
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2,973
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(2)
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$
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27,767
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(2)
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$
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4,904
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(3)
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$
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310,883
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(3)
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Edward S. Nekritz
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14,222
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(1)
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$
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469,574
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(1)
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5,239
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(2)
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$
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67,639
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(2)
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Jeffrey H. Schwartz*
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47,407
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(1)
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$
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1,565,258
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(1)
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30,238
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(2)
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$
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367,452
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(2)
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* Mr. Rakowich became our chief executive officer on
November 10, 2008. Previously, Mr. Rakowich was our
president and chief operating officer. Mr. Schwartz
resigned as our chief executive officer on November 10,
2008 and his employment with us ended effective December 8,
2008. The terms of the agreement with Mr. Schwartz relating
to his separation from ProLogis are described below under
Potential Payments Upon Termination or Change
in Control.
(1) The
value in column (c) is the aggregated difference between
the market prices at which the named executive officer exercised
the share options and the exercise prices of the options.
Certain of the share options exercised in column (b) earned
DEUs while they were outstanding. These DEUs were distributed to
the named executive officer upon exercise as follows:
Mr. Rakowich 34,947;
Mr. Nekritz 7,674; and
Mr. Schwartz 25,579. The value of these DEUs is
not included in column (c).
(2) The
share awards in column (d) represent RSUs
and/or CPSs
and accrued DEUs that vested to the named executive officer in
2008. The value in column (e) is based on the closing price
of our common shares on the respective vesting dates.
(3) The
share awards in column (d) represent RSUs and the accrued
DEUs that vested to Mr. Sullivan in 2008. The receipt of
these awards was deferred by Mr. Sullivan until January of
the calendar year after the year in which his employment with us
terminates. The deferral of these awards is reflected as a 2008
contribution to Mr. Sullivans deferred equity
compensation account in the nonqualified deferred compensation
table. The value in column (e) is based on the closing
price of our common shares on the respective vesting date.
NONQUALIFIED
DEFERRED COMPENSATION IN FISCAL YEAR 2008
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Aggregate
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Executive
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Registrant
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Earnings
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Aggregate
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Aggregate
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Contributions in
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Contributions
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In
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Withdrawals/
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Balance at
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Last FY
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in Last FY
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Last FY
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Distributions
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Last FYE
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Name
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($)
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($)
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($)
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($)
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($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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Walter C. Rakowich*
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(1)
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$
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$
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$
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(515,114
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)(2)
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$
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$
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1,139,036
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(3)
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(4)
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$
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2,738,751
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$
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$
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(2,898,372
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)(5)
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$
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(5,711,093
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)(6)
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$
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62,922
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(3)
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Ted R. Antenucci
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(1)
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$
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$
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3,010
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(7)
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$
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12,039
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(2)
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$
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(959,586
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)(8)
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$
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William E. Sullivan
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(4)
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$
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516,274
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(9)
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$
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$
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(385,778
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)(5)
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$
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$
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130,497
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(3)
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Edward S. Nekritz
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(1)
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$
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440,728
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(10)
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$
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$
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(740,525
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)(2)
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$
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$
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1,394,932
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(3)
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(4)
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$
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370,813
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$
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$
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(421,027
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)(5)
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$
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$
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135,553
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(3)
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Jeffrey H. Schwartz*
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(1)
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$
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$
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$
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(340,378
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)(2)
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|
$
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|
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$
|
118,663
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(3)
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(4)
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|
$
|
4,084,626
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|
|
$
|
|
|
|
|
$
|
(8,526,312
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)(5)
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|
|
$
|
(1,022,193
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)(6)
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|
|
$
|
1,805,617
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(3)
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|
* Mr. Rakowich became our chief executive officer on
November 10, 2008. Previously, Mr. Rakowich was our
president and chief operating officer. Mr. Schwartz
resigned as our chief executive officer on November 10,
2008 and his employment with us ended effective December 8,
2008. The terms of the agreement with Mr. Schwartz relating
to his separation from ProLogis are described below under
Potential Payments Upon Termination or Change
in Control.
(1) Represents
the named executive officers account activity and fiscal
year-end balance in our NSP. Participants in our NSP may defer
cash compensation (salary and bonus) under the terms of the
plan. Mr. Antenucci participated in a Catellus nonqualified
deferred compensation plan, which was terminated in April 2008.
We assumed the Catellus plan in 2005 when we merged with
Catellus. Mr. Antenucci previously deferred cash
compensation (salary and bonus) earned while he was with
Catellus under the terms of the Catellus plan. The NSP and the
Catellus plans are described in more detail in the narrative
discussion that follows these footnotes.
(2) Represents
earnings that are computed based on the specific investment
options that are elected by each named executive officer, as
more fully described in the narrative discussion that follows
these footnotes. These amounts are not included in the named
executive officers total compensation in the summary
compensation table.
35
(3) Each
of the named executive officers elected to receive a
distribution in January 2009 of their entire NSP balance and all
of their deferred share award balance as of December 31,
2008, under special payment elections allowed under the
transitional rules included in section 409(A) of the Code.
(4) Represents
the named executive officers account activity and fiscal
year-end balance with respect to equity compensation that they
have deferred. The amounts in column (b) represent the
deferral of share awards that vested in 2007 (and were scheduled
for distribution in 2008) and in 2008 (and were scheduled
for distribution in 2008). Share awards deferred are reflected
as contributions in the year that they would have been
distributed. Contributions are valued using the closing price of
our common shares on the date the contribution is made. The
deferral of equity compensation is described in more detail in
the narrative discussion that follows these footnotes.
(5) Represents
the change in the market value of the deferred share awards
during the fiscal year (computed as the difference between the
value of the participants account as of the beginning of
the fiscal year plus the value of the deferred share awards as
of the date in 2008 that they were contributed to the plan, if
any, and the value of the participants account as of the
end of the fiscal year). These amounts are not included in the
named executive officers total compensation in the summary
compensation table. The closing prices of our common shares as
of December 31, 2007 ($63.38 per share) and
December 31, 2008 ($13.89 per share) were used to determine
the market value of the account balance as of each respective
date.
(6) Represents
distributions of previously deferred share awards under the
terms of the original deferral election or any special payment
election. The amount in column (e) represents the market
value of the deferred share awards as of the date they were
distributed to the named executive officer. Distributions are
valued using the closing price of our common shares on the date
the distribution is made.
(7) Under
the terms of Catelluss plan, Mr. Antenucci previously
elected an earnings enhancement that provides for an annual
employer contribution equal to 25% of his earnings under the
plan for the year. This amount is included in
Mr. Antenuccis total compensation for 2008 in the
summary compensation table.
(8) Represents
a lump-sum distribution paid to Mr. Antenucci upon
termination of the Catellus plan in which he participated in
April 2008.
(9) Included
in the amount in column (b) is $200,000 representing the
amount of Mr. Sullivans annual bonus earned for 2007
that was payable in 2008. Mr. Sullivan elected to defer
this amount into our common shares. The amount deferred is
included in his total compensation in the summary compensation
table as 2007 compensation.
(10) The
amount in column (b) represents the deferral of a portion
of Mr. Nekritzs annual bonus earned for 2007 that was
payable in 2008. The amount deferred is included in
Mr. Nekritzs total compensation in the summary
compensation table as 2007 compensation.
Narrative
Discussion to Nonqualified Deferred Compensation in Fiscal Year
2008 Table
The named executive officers may defer portions of their cash
compensation and some or all of certain components of their
equity compensation. Generally, cash compensation (salary and
bonus) is deferred through their participation in our NSP, a
nonqualified deferred compensation plan. Also, a named executive
officer may elect to defer all or a portion of his bonus into
our common shares. Equity compensation in which the named
executive officer is vested and for which distribution is
required under the terms of our equity compensation plans may be
deferred at the election of the named executive officer.
Generally, the compensation deferred is tax-deferred until it is
distributed to the named executive officer. However, amounts
deferred may be subject to FICA and Medicare employee and
employer taxes in accordance with statutory maximums.
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|
Deferred
Cash Compensation
|
NSP. Named executive officers who
choose to participate in the NSP may defer up to 35% of their
salary and up to 100% of their bonus. The amounts deferred under
the NSP earn returns based on the performance of an array of
hypothetical investment funds that mirror the investment funds
available to participants in our 401(k) Plan. No monies are
actually invested in the participants name in the selected
investment funds. Participants may change their investment
choices at any time. NSP accounts are credited with the value of
the particular fund or funds selected by the participant, and
will continue to be so credited until the account is fully
distributed. Because the amounts deferred through the NSP are
only hypothetically invested, they remain our assets
and, as such, they are subject to claims by our general
creditors. The hypothetical investment funds
available to the named executive officers participating in the
NSP are all publicly available mutual funds. These investment
options are available to all participants in the NSP, as well as
to all participants in our 401(k) Plan. Additionally, the named
executive officers, as well as all other participants, have the
option to invest in our common shares.
Contributions to the NSP are subject to our matching
contribution, but only to the extent that our matching
contribution associated with the participants 401(k) Plan
contributions have not met our maximum match ($6,900
36
for 2008). We did not make any matching contributions in the NSP
for Messrs. Rakowich, Nekritz, or Schwartz in 2008.
Mr. Antenucci and Mr. Sullivan do not participate in
the NSP. Our matching contributions in the NSP, if any, will
vest to the participant at a rate of 20% for each year of
service with us and become fully vested after five years of
service. Under the transitional rules of section 409(A) of
the Code, participants in our NSP were allowed to make a
one-time special payment election prior to December 31,
2008 with respect to their December 31, 2008 balances in
the NSP. All of the named executive officers that participated
in the NSP made such election and, accordingly, their NSP
balance was distributed to them in January 2009. None of the
named executive officers are currently making contributions to
the NSP.
NSP account balances must be distributed to the participant upon
the termination of their employment with us. Distributions can
be paid in a lump sum, annual installments, or a combination of
the two, as chosen by the participant at the time of the
deferral election. Under certain circumstances, hardship and
in-service withdrawals by the participant are allowed with a 15%
penalty assessed on all in-service withdrawals.
The investment options that were available to all NSP
participants in 2008 and the return earned by these funds in
2008 are as follows:
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|
|
|
|
|
|
Vanguard Prime Money Market Fund
|
|
2.77%
|
|
Vanguard Intermediate-Term Bond Index Fund
|
|
4.93%
|
Vanguard Balanced Index Fund
|
|
(22.21%)
|
|
Vanguard Target Retirement 2045 Fund
|
|
(34.56%)
|
Vanguard Target Retirement 2035 Fund
|
|
(34.66%)
|
|
Vanguard Target Retirement 2025 Fund
|
|
(30.05%)
|
Vanguard Target Retirement 2015 Fund
|
|
(24.06%)
|
|
Vanguard Target Retirement 2005 Fund
|
|
(15.82%)
|
Vanguard Target Retirement Income Fund
|
|
(10.93%)
|
|
Vanguard 500 Index Fund
|
|
(37.02%)
|
Vanguard Growth Index Fund
|
|
(38.32%)
|
|
Vanguard Mid-Cap Index Fund
|
|
(41.82%)
|
Vanguard REIT Index Fund
|
|
(37.05%)
|
|
Vanguard Small-Cap Growth Index Fund
|
|
(40.00%)
|
Vanguard Small-Cap Value Index Fund
|
|
(32.05%)
|
|
Vanguard Value Index Fund
|
|
(35.97%)
|
Vanguard Total International Stock Index Fund
|
|
(44.10%)
|
|
Allianz CCM Emerging Companies Fund
|
|
(42.74%)
|
Allianz CCM Mid-Cap Fund
|
|
(44.58%)
|
|
American Beacon International Equity Fund
|
|
(40.57%)
|
Ariel Appreciation Fund
|
|
(40.74%)
|
|
Artio International Equity Fund
|
|
(43.89%)
|
Artisan International Fund
|
|
(46.96%)
|
|
Aston ABN AMRO Growth Fund N
|
|
(32.80%)
|
Cohen & Steers Realty Shares
|
|
(34.40%)
|
|
Davis New York Venture Fund
|
|
(40.03%)
|
Harbor Capital Appreciation Fund
|
|
(37.30%)
|
|
Hotchkis & Wiley Mid-Cap Value Fund
|
|
(43.05%)
|
Mainstay ICAP Equity Fund
|
|
(38.12%)
|
|
PIMCO Total Return Fund
|
|
4.60%
|
Third Avenue Small-Cap Value Fund
|
|
(34.56%)
|
|
Turner Mid Cap Growth Fund
|
|
(48.64%)
|
Turner Small Cap Growth
|
|
(41.56%)
|
|
Wells Fargo Advantage C&B Mid Cap Value Fund
|
|
(33.68%)
|
ProLogis Stock Fund
|
|
(74.25%)
|
|
|
|
|
Mr. Rakowich elected the self-directed option with respect
to a portion of his deferred compensation funds. The weighted
average return earned by Mr. Rakowich on these funds in
2008 was (28.54%).
Catellus Plan. There were two
nonqualified deferred compensation plans in which Catellus
employees had participated prior to the merger with us in 2005.
Both plans were assumed by us and participants who became our
employees subsequent to the merger, including
Mr. Antenucci, were not required to have their investment
balances distributed. Deferral elections made prior to the
merger remained in effect, however, no further deferral
elections were allowed after September 2005. The Catellus plans
provided for an earnings enhancement election by participants
who, on or prior to December 31, 2007, had completed 10 or
more years of service or retire on or after the age of
591/2.
This election results in an employer matching contribution equal
to 25% of the earnings in the participants account after
the election is made. Mr. Antenucci elected this earnings
enhancement in 2006 and such company contributions were made in
2006, 2007, and 2008.
Catellus plan account balances were required to be distributed
to the participant upon termination of employment with us or
based on an irrevocable election specifying scheduled
withdrawals. Distributions were paid in a lump sum or annual
installments, as chosen by the participant at the time of the
deferral election. Under certain circumstances, hardship and
unscheduled withdrawals by the participant were allowed with a
10% penalty assessed on all unscheduled withdrawals.
37
In 2007 and 2008, the two Catellus plans were terminated after
written consent was obtained by a majority of the plan
participants. As such, Mr. Antenucci and the other plan
participants received lump sum distributions in 2007 and 2008,
as applicable.
The amounts deferred under the Catellus plan earned returns
based on the performance of an array of hypothetical investment
funds. No monies were actually invested in the
participants name in the selected investment funds.
Participants were allowed to change their investment choices at
any time. The Catellus plan accounts were credited with the
value of the particular fund or funds selected by the
participant and continued to be so credited until the account
was fully distributed. Because the amounts deferred through the
Catellus plan were only hypothetically invested,
they remained our assets and, as such, they were subject to
claims by our general creditors.
The investment options that were available to all of the
Catellus plan participants in 2008 and the return earned by
these funds in 2008 are as follows:
|
|
|
|
|
|
|
|
|
|
|
500 Index Trust B
|
|
|
(9.51
|
%)
|
|
Blue Chip Growth Trust
|
|
|
(12.28
|
%)
|
Global Bond Trust
|
|
|
8.90
|
%
|
|
Growth & Income Trust II
|
|
|
(11.76
|
%)
|
Overseas Equity Trust
|
|
|
(8.12
|
%)
|
|
Short-term Bond Trust
|
|
|
(1.48
|
%)
|
Small Cap Growth Trust
|
|
|
(14.51
|
%)
|
|
Fixed T-Note
|
|
|
4.89
|
%
|
|
|
|
Deferred
Equity Compensation
|
Under our executive deferred equity compensation plan, named
executive officers who elect to defer the receipt of vested
share awards or defer their cash bonus into common shares will
receive the common shares at a future date as specified in their
election. Generally, the deferral is effective until January of
the calendar year following the year in which the named
executive officers employment with us terminates. However,
the named executive officer may elect to defer the share awards
until a specified date, subject to certain limitations.
The deferral of share awards is effective as of the date the
share award is scheduled to be distributed, which is generally
within a short period after the award is vested (awards that
vest in December are generally distributed on the first business
day of January). We value the balance of the named executive
officers deferred equity compensation account at the
closing price of our common shares as of the last trading day of
the fiscal year. Contributions are valued at the closing price
of our common shares on the date the contribution is made and
earnings are computed on the account balance based on the change
in the value of our common shares from the beginning of the
fiscal year (or from the date of contribution) to the end of the
fiscal year.
Under the transitional rules of section 409(A) of the Code,
participants in our executive deferred equity compensation plan
were allowed to make a one-time special payment election prior
to December 31, 2008 with respect to their deferred
balances. Mr. Rakowich made the election in 2007 with
respect to some of his deferred share balances and with respect
to the remaining deferred share balances before the end of 2008.
Shares subject to the election made in 2007 were distributed to
Mr. Rakowich during 2008. Messrs. Sullivan, Nekritz,
and Schwartz made their elections with respect to all of their
deferred share balances before the end of 2008. None of the
named executive officers have deferred additional common shares
in 2009.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have employment agreements with Mr. Rakowich and
Mr. Antenucci and, during 2008, we had an employment
agreement with Mr. Schwartz. All of the agreements are
described above under Grants of Plan-Based
Awards in Fiscal Year 2008 Narrative Discussion to
the Summary Compensation Table for Fiscal Year 2008 and the
Grants of Plan-Based Awards in Fiscal Year 2008 Table and
we have executive protection agreements with Mr. Sullivan
and Mr. Nekritz. On December 8, 2008, we entered into
a separation agreement with Mr. Schwartz with respect to
his resignation as our chief executive officer on
November 10, 2008. The terms of Mr. Schwartzs
separation are described below under
Mr. Schwartzs Separation
Agreement. The employment and executive protection
agreements, along with the individual equity compensation award
agreements entered into with respect to our 2006 Long-Term
Incentive Plan, contain provisions that provide for accelerated
vesting of unvested equity awards, under certain limited
circumstances. Mr. Rakowichs and
Mr. Antenuccis employment agreements each further
provide for severance payments and the continuation of certain
health and welfare benefits under certain limited circumstances.
Under our company policy, each of our
38
employees would be paid for their earned and unused vacation
time upon termination under any termination scenario.
Accordingly, such amounts for the named executive officers are
not included in the amounts presented. This discussion assumes a
termination or change in control as of December 31, 2008.
|
|
|
Termination
for Reasons other than Change in Control Death,
Disability, or Retirement
|
The employment agreements with Mr. Rakowich and
Mr. Antenucci and the executive protection agreements with
Mr. Sullivan and Mr. Nekritz do not provide for
severance payments or continuation of health and welfare
benefits in the event of their death, disability, or retirement.
However, the individual equity compensation award agreements
with each named executive officer provide for accelerated
vesting of unvested equity awards under these three scenarios.
Further, Mr. Antenuccis employment agreement provides
for a similar accelerated vesting of unvested equity awards in
the event of death or disability.
The estimated value of the accelerated vesting of unvested
equity awards benefit in the event of their death, disability,
or retirement is presented below for each named executive
officer, except for Mr. Schwartz. The terms of
Mr. Schwartzs separation agreement effective as of
December 8, 2008 are described under
Mr. Schwartzs Separation
Agreement. For purposes of these calculations, we have
assumed that the termination under all of the scenarios was
effective on December 31, 2008. Accordingly, we have used
the closing price of our common shares on December 31, 2008
of $13.89 per share in the calculations. Because these scenarios
and the assumptions used in the calculations are hypothetical,
the amounts that might be paid in the future should termination
under one of these scenarios occur could differ materially from
these hypothetical payments.
|
|
|
|
|
|
|
Walter C. Rakowich:
|
|
$9,386,670
|
|
|
|
|
|
|
|
Ted R. Antenucci:
|
|
$9,248,770
|
|
|
|
|
|
|
|
William E. Sullivan:
|
|
$8,198,676
|
|
|
|
|
|
|
|
Edward S. Nekritz:
|
|
$5,739,890
|
The estimates reflect the value of unvested share options
computed as the difference between the closing price of our
common shares on December 31, 2008 ($13.89) and the
exercise price of the underlying common share (to the extent the
exercise price is less than $13.89), the full value of earned
but unvested RSUs and associated accrued DEUs, and the full
value of the unearned CPSs and associated accrued DEUs (the
number of CPSs earned is computed and prorated based on the
abbreviated performance period), each as of December 31,
2008, where vesting would be accelerated upon the named
executive officers death, disability, or retirement. For
purposes of these calculations, each unearned CPS for which
vesting would be accelerated is estimated to be equal to:
(i) 12.5% of the target award based on the performance of
our common shares under the specified performance criteria
during an abbreviated performance period of two years
(January 1, 2007 through December 31, 2008, the
assumed termination date) for CPSs granted in 2006 and
(ii) 0% of the target award based on the performance of our
common shares under the specified performance criteria during an
abbreviated performance period of one year (January 1, 2008
through December 31, 2008, the assumed termination date)
for CPSs granted in 2007. Each unearned CPS granted to
Mr. Antenucci on May 26, 2006, for which vesting would
be accelerated is estimated to equal 22.5% of the target award,
which is based on the performance of our common shares under the
specified performance criteria during an abbreviated performance
period of less than three years (May 26, 2006 through
December 31, 2008, the assumed termination date). The
performance criteria are described more fully under
Compensation Discussion and Analysis.
In addition, Mr. Rakowichs employment agreement
provides that in the event of his death or disability, he is
entitled to receive both his target bonus and his annual equity
award on a pro rated basis for the year in which such event
occurs. For 2008, Mr. Rakowichs employment agreement
provided for a bonus of $840,000 and a grant of equity awards of
$3,500,000. Mr. Rakowich did not receive the full amount of
these awards for 2008.
39
|
|
|
Termination
not related to a Change in Control Involuntary
Termination without Cause or Voluntary Termination for Good
Reason (Constructive Discharge)
|
The executive protection agreements that we have in place with
Mr. Sullivan and Mr. Nekritz do not provide for
benefits (severance payments, continuation of health and welfare
benefits, or accelerated vesting of unvested equity awards
benefit) in the event they are terminated under these scenarios
(involuntary termination without cause or constructive
discharge, not related to a change in control). However,
Mr. Rakowichs and Mr. Antenuccis
employment agreements, as described under
Grants of Plan-Based Awards in Fiscal
Year 2008 Narrative Discussion to the Summary
Compensation Table for Fiscal Year 2008 and the Grants of
Plan-Based Awards in Fiscal Year 2008 Table, provide for a
cash severance payment, the continuation of certain health and
welfare benefits, and the continuation or acceleration of
vesting of their unvested equity awards in the event of
involuntary termination without cause or constructive discharge,
not related to a change in control, conditioned on
Mr. Rakowichs and Mr. Antenuccis release
of claims. Cause is generally defined in their employment
agreements as: (i) the willful and continued failure by the
officer to perform the duties that are specified in the
agreements; (ii) the engaging in injurious acts to the
company by the officer; or (iii) the egregious misconduct
on the part of the officer. Voluntary termination for good
reason (constructive discharge), as generally defined in the
employment agreements, can occur should we: (i) change the
officers assignments such that they are inconsistent with
the duties that are specified in the agreement;
(ii) relocate the officers place of employment more
than 30 miles from the current location; or (iii) not
comply with the provisions of the agreements pertaining to the
officers compensation and benefits.
Because these scenarios and the assumptions used in the
calculations are hypothetical, the amounts that might be paid in
the future should termination under one of these scenarios occur
could differ materially from these hypothetical payments. The
total value of these benefits, estimated to be $15,865,745 to
Mr. Rakowich and $11,881,052 to Mr. Antenucci, consist
of the following:
Mr. Rakowich:
|
|
|
|
|
a cash severance payment of $6,440,000 representing
two times Mr. Rakowichs annual base salary ($630,000)
and target bonus ($840,000) in effect as of December 31,
2008 plus a payment of $3,500,000 representing the value of his
2008 annual equity award (such amount is assumed to be payable
in cash but may be made in the form of equity award grants);
this computation is based on the specific terms of his agreement
with respect to a termination under these circumstances
occurring prior to January 1, 2009 (assumed termination
date is December 31, 2008);
|
|
|
|
the continuation of medical and dental insurance benefits of
$18,935 representing the sum of the estimated costs
of providing such benefits to Mr. Rakowich for a period of
two years as provided for in his employment agreement; the costs
for each year are the estimated costs for the previous year at
an escalation factor of 8%;
|
|
|
|
a lump sum payment of $12,000 in lieu of providing the
continuation of health and welfare benefits, other than medical
and dental insurance, to Mr. Rakowich for a period of two
years; and
|
|
|
|
continuation of vesting of unvested equity awards benefit of
$9,394,810 represents the intrinsic value of
unvested equity awards as of the date of
Mr. Rakowichs termination for which vesting would
have been continued as if he remained an employee after his
termination as provided under these scenarios in his employment
agreement; the amount is the same as calculated for
Mr. Rakowich under the death, disability, and retirement
scenarios except with respect to the CPS awards which are not
prorated.
|
Mr. Antenucci:
|
|
|
|
|
a cash severance payment of $2,520,000 representing
Mr. Antenuccis annual base salary of $630,000 that
was in effect as of December 31, 2008 from the assumed
termination date of December 31, 2008 to the end of the
current term of the agreement, which is December 31, 2012;
|
|
|
|
the continuation of health and welfare benefits of
$47,041 representing the sum of the estimated costs
of providing such benefits to Mr. Antenucci from the
assumed termination date of December 31, 2008 to the end of
the current term of the agreement, which is December 31,
2012; the costs for each year are the estimated costs for the
previous year at an escalation factor of 8%; and
|
40
|
|
|
|
|
accelerated vesting of unvested equity awards benefit of
$9,314,011 the amount is the same as calculated for
Mr. Antenucci above under the death, disability, and
retirement scenarios except with respect to the CPS awards which
are not prorated.
|
|
|
|
Terminations
following a Change in Control
|
The executive protection agreements with Mr. Sullivan and Mr.
Nekritz and the individual equity compensation award agreements
entered into with all of the named executive officers with
respect to the 2006 Long-Term Incentive Plan provide for certain
benefits upon involuntary termination without cause or voluntary
termination for good reason (constructive discharge) following a
change in control. Under these agreements, a change in control
generally occurs upon merger, sale, or disposition of
substantially all of our assets, or adoption of a plan of
liquidation. Cause is generally defined in
Mr. Rakowichs and Mr. Antenuccis
employment agreements as discussed in the previous section.
Cause is generally described in Mr. Sullivans and
Mr. Nekritzs executive protection agreements as:
(i) the willful and continued failure by the named
executive officer to substantially perform his duties;
(ii) willful engaging in conduct that is demonstrably
injurious to the company by the named executive officer; or
(iii) egregious misconduct involving serious moral
turpitude on the part of the named executive officer. Voluntary
termination for good reason (constructive discharge), as
generally defined in the agreements, can occur should the
following circumstances occur: (i) substantial and adverse
alteration in the nature of the named executive officers
status or responsibilities following the change in control;
(ii) a material failure to provide salary and other
compensation and benefits in accordance with the agreement; or
(iii) the companys material breach of the executive
protection agreement.
The estimated value of the benefits under these two scenarios is
presented below for each of the named executive officers, except
for Mr. Schwartz. The terms of Mr. Schwartzs
separation agreement effective as of December 8, 2008 are
described under Mr. Schwartzs
Separation Agreement. For purposes of these calculations,
we have assumed that the termination following a change in
control under both scenarios was effective on December 31,
2008. Accordingly, we have used the closing price of our common
shares on December 31, 2008 ($13.89 per share) in the
calculations. Because these scenarios and the assumptions used
in the calculations are hypothetical, the amounts that might be
paid in the future should termination under one of these two
scenarios occur could differ materially from these hypothetical
payments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of
|
|
|
|
|
|
|
Named Executive
|
|
|
|
|
|
Continued Health and
|
|
|
Unvested Equity
|
|
|
Excise Tax
|
|
|
|
Officer
|
|
|
Cash Severance
(1)
|
|
|
Welfare Benefits
(2)
|
|
|
Compensation
(3)
|
|
|
Gross-Up
(4)
|
|
|
Total
|
Walter C. Rakowich
|
|
|
$
|
6,440,000
|
|
|
|
$
|
30,935
|
|
|
|
$
|
9,394,810
|
|
|
|
$
|
|
|
|
|
$
|
15,865,745
|
|
Ted R. Antenucci
|
|
|
$
|
4,674,000
|
|
|
|
$
|
26,714
|
|
|
|
$
|
9,314,011
|
|
|
|
$
|
|
|
|
|
$
|
14,014,725
|
|
William E. Sullivan
|
|
|
$
|
2,300,000
|
|
|
|
$
|
19,730
|
|
|
|
$
|
8,198,676
|
|
|
|
$
|
2,099,202
|
|
|
|
$
|
12,617,608
|
|
Edward S. Nekritz
|
|
|
$
|
1,800,000
|
|
|
|
$
|
29,016
|
|
|
|
$
|
5,741,795
|
|
|
|
$
|
1,418,702
|
|
|
|
$
|
8,989,513
|
|
|
(1) Cash
severance for Messrs. Rakowich, Sullivan, and Nekritz is
computed as two times the sum of their annual base salary and
their annual bonus amount for 2008 (annual bonus is computed at
the target level, not the actual level for 2008). In addition,
Mr. Rakowichs cash severance includes $3,500,000
representing the value of his 2008 equity award under his
employment agreement (such amount is assumed to be payable in
cash but may be made in the form of equity award grants). Cash
severance for Mr. Antenucci is computed as three times the
sum of his annual base salary and his annual bonus for 2008
(annual bonus is computed at the target level, not the actual
level for 2008). In addition, Mr. Antenuccis
agreement provides that for the year of termination, he would
receive an annual bonus at the target level. Therefore, the cash
severance amount for Mr. Antenucci includes an additional
$174,000, which is the difference between his target bonus and
his actual bonus for 2008.
(2) Each
named executive officer would receive continued medical and
dental insurance benefits for two years after the termination
date. The named executive officers, other than Mr. Rakowich,
would receive continued life, accidental death and
dismemberment, and disability insurance benefits for two years
after the termination date. The value of these benefits is the
sum of the estimated costs of providing such benefits to the
named executive officer over the applicable period with the cost
for each year based on the estimated costs for the previous year
at an escalation factor of 8%. In addition, the named executive
officers, other than Mr. Rakowich, would receive outplacement
services for up to one year after the termination date. Such
benefit is estimated to be $5,000 for each of the named
executive officers. Additionally, in lieu of continuation of
other health and welfare benefits for two years after
termination, Mr. Rakowich would receive a lump-sum payment
of $12,000.
(3) These
amounts are the same as calculated for each of the named
executive officers under the death, disability, and retirement
scenarios except with respect to the CPS awards which are not
prorated.
(4) The
employment agreements with Mr. Rakowich and
Mr. Antenucci and the executive protection agreements with
Mr. Sullivan and Mr. Nekritz provide for the payment
of an excise tax
gross-up
payment. This payment would be made to the named executive
41
officer should he incur an excise
tax under Section 4999 of the Code, as a result of an
excess parachute payment arising from severance
payments and the accelerated vesting of unvested equity awards.
The excise tax
gross-up
payment is an amount such that, after the payment of the excise
tax and all income and excise taxes applicable to the
gross-up
payment, the named executive officer would receive the same
amount of severance had the excise tax not applied. However, for
Mr. Sullivan and Mr. Nekritz, if the excise tax can be
avoided by reducing the total severance payment resulting from a
change in control by no more than 10%, then the severance
payment will be reduced accordingly. Otherwise,
Mr. Sullivan and Mr. Nekritz will receive the full
gross-up
payment.
|
|
|
Mr. Schwartzs
Separation Agreement
|
We entered into an employment agreement with Mr. Schwartz
on March 14, 2008 as described above under
Grants of Plan-Based Awards in Fiscal Year
2008 Narrative Discussion to the Summary
Compensation Table for Fiscal Year 2008 and the Grants of
Plan-Based Awards in Fiscal Year 2008 Table. Effective
December 8, 2008, we entered into a separation agreement
with Mr. Schwartz. Under the separation agreement,
Mr. Schwartz received, or is entitled to receive, the
following benefits which are all included in Mr. Schwartzs
2008 compensation in the summary compensation table:
|
|
|
|
|
paid leave of absence for the period from November 10, 2008
to December 8, 2008 of $83,333;
|
|
|
|
lump sum annual bonus for 2008 of $1,600,000, representing 80%
of the target level;
|
|
|
|
severance and other benefits aggregating $13,547,600 consisting
of:
|
|
|
|
|
|
lump sum payment of $7,500,000, in lieu of the annual grant of
equity-based awards for 2008 due under his employment agreement;
|
|
|
|
separation payment of $6,000,000, representing two times his
annual salary and target bonus amounts, payable over the
24-month
period beginning with his separation date;
|
|
|
|
continuation of medical and dental insurance benefits for two
years valued at $5,600;
|
|
|
|
lump sum payment in lieu of continuation of other health and
welfare benefits of $12,000, payable in May 2009; and
|
|
|
|
part-time secretarial support for a period of one year (ending
on December 8, 2009) valued at $30,000.
|
Under the terms of the agreement, Mr. Schwartz forfeited
all of his unvested equity-based awards (share options, RSUs,
CPSs, and associated DEUs). The 300,000 contingent performance
units that were originally granted under his employment
agreement in March 2008 were not earned when his employment with
us ended and were cancelled on December 8, 2008. All of
Mr. Schwartzs vested share options will remain
exercisable until the last day of the stated option term without
regard to his separation from the company.
TRUSTEE
COMPENSATION FOR FISCAL YEAR 2008*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
or
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
Paid in Cash
|
|
|
Stock
Awards
|
|
|
Compensation
|
|
|
Total
|
Name
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(g)
|
|
|
(h)
|
Stephen L. Feinberg, Chairman
|
|
|
$
|
122,429
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
197,455
|
|
K. Dane Brooksher
|
|
|
$
|
422,379
|
(1)(2)(5)
|
|
|
$
|
|
(5)
|
|
|
$
|
16,601
|
(6)
|
|
|
$
|
438,980
|
|
George L. Fotiades
|
|
|
$
|
101,000
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
176,026
|
|
Christine N. Garvey
|
|
|
$
|
81,500
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
156,526
|
|
Lawrence V. Jackson
|
|
|
$
|
64,247
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
139,273
|
|
Donald P. Jacobs
|
|
|
$
|
99,500
|
(1)(2)(7)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
174,526
|
|
Nelson C. Rising
|
|
|
$
|
26,879
|
(1)(2)(5)
|
|
|
$
|
|
(5)
|
|
|
$
|
|
|
|
|
$
|
26,879
|
|
D. Michael Steuert
|
|
|
$
|
82,500
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
157,526
|
|
J. Andre Teixeira
|
|
|
$
|
77,750
|
(1)(7)
|
|
|
$
|
75,026
|
(1)(3)(4)(8)
|
|
|
$
|
|
|
|
|
$
|
152,776
|
|
William D. Zollars
|
|
|
$
|
74,000
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
149,026
|
|
Andrea M. Zulberti
|
|
|
$
|
93,500
|
(1)(2)
|
|
|
$
|
75,026
|
(3)(4)
|
|
|
$
|
|
|
|
|
$
|
168,526
|
|
|
* Columns
(d), (e), and (f) have been omitted from this table because
they are not applicable.
(1) Our
outside trustees earned the following fees in 2008: (i) a
$50,000 annual retainer; (ii) fees for chairing committees
of the board; (iii) fees for attendance at meetings of the
board; (iv) fees for attendance at meetings of committees
of the board; and (v) fees
42
for serving as lead outside
trustee, if the chairman is a member of management. The trustee
fee structure is described in more detail in the narrative
discussion that follows these footnotes.
For 2008, all trustees other than Ms. Garvey,
Mr. Teixeira, and Mr. Zollars elected to defer the
receipt of such fees earned until after his or her service on
the board is terminated. Ms. Garvey and Mr. Zollars
received their fees for 2008 in cash. Prior to 2007,
Ms. Garvey and Mr. Zollars had elected to defer the fees
earned. The fees earned by Mr. Teixeira are deposited into
our Dividend Reinvestment and Share Purchase Plan (DRP) in his
name each quarter. See the narrative discussion that follows
these footnotes for more information on the payment of fees.
Mr. Brooksher earned an annual fee of $400,000 in 2008
under an advisory agreement between Mr. Brooksher and the
company, which is payable in cash through June 2013. Under the
agreement, Mr. Brooksher provides certain strategic advice
to the company at the request of our chief executive officer.
(2) As
of December 31, 2008, the number of common shares included
in each trustees hypothetical fee deferral account was as
follows:
|
|
|
|
|
|
|
|
Mr. Feinberg
|
|
27,281
|
|
|
|
Mr. Brooksher
|
|
3,947
|
|
|
|
Mr. Fotiades
|
|
14,756
|
|
|
|
Ms. Garvey
|
|
1,431
|
|
|
|
Mr. Jackson
|
|
2,780
|
|
|
|
Mr. Jacobs
|
|
25,002
|
|
|
|
Mr. Rising
|
|
3,203
|
|
|
|
Mr. Steuert
|
|
10,049
|
|
|
|
Mr. Zollars
|
|
11,745
|
|
|
|
Ms. Zulberti
|
|
7,332
|
|
In 2009, common shares were issued to Mr. Brooksher,
Mr. Rising, and Ms. Garvey in settlement of their
deferred trustee fee account balance.
(3) Represents
the compensation expense that we recognized in 2008 associated
with the award of 1,215 fully vested Deferred Share Units (DSUs)
to each of our outside trustees that were elected at our annual
meeting on May 9, 2008. Each DSU represents one of our
common shares and the DSUs are fully vested when they are
granted. DSUs accrue DEUs on December 31st of each
year that are fully vested when accrued. The compensation
expense associated with the DSUs is based on the closing price
of our common shares on the date of grant, which was $61.75 per
share. Our trustees have elected to defer receipt of their DSUs
and associated accrued DEUs until their service on the board is
terminated. We first issued DSUs to our trustees in May 2004.
Prior to that date, we issued share options to our trustees on
an annual basis. Upon termination from the board, the
outstanding share awards earned for service on the board are
distributed to the trustee. As of December 31, 2008, our
current trustees had the following DSUs and accrued DEUs
associated with their service on the board, outstanding:
|
|
|
|
|
|
|
|
Mr. Feinberg
|
|
6,931
|
|
|
|
Mr. Fotiades
|
|
6,931
|
|
|
|
Ms. Garvey
|
|
3,597
|
|
|
|
Mr. Jackson
|
|
1,258
|
|
|
|
Mr. Jacobs
|
|
6,931
|
|
|
|
Mr. Steuert
|
|
6,931
|
|
|
|
Mr. Teixeira
|
|
6,931
|
|
|
|
Mr. Zollars
|
|
6,931
|
|
|
|
Ms. Zulberti
|
|
3,597
|
|
(4) Previously,
we made annual grants of share options to our outside trustees.
The share options granted were fully vested and exercisable as
of the date of grant. We began granting DSUs to our outside
trustees in lieu of the option grants in May 2004. As of
December 31, 2008, the outstanding options, all of which
are exercisable, and associated accrued DEUs, all of which are
fully vested, held by our current trustees associated with their
service on the board were as follows:
|
|
|
|
|
Mr. Feinberg: 15,000 options and 7,020
associated accrued DEUs; exercise prices ranging from $19.75 to
$20.80 per option and expiration dates ranging from
June 24, 2009 to May 17, 2011.
|
|
|
|
Mr. Fotiades: 10,000 options; exercise prices of
$24.47 and $27.56 per option and expiration dates of
June 12, 2012 and May 20, 2013.
|
|
|
|
Ms. Garvey: 10,000 options; each with an
exercise price of $43.80 and an expiration date of
September 22, 2015.
|
|
|
|
Mr. Jacobs: 25,000 options and 7,020 associated
accrued DEUs; exercise prices ranging from $19.75 to $27.56 per
option and expiration dates ranging from June 24, 2009 to
May 20, 2013.
|
|
|
|
Mr. Steuert: 10,000 options; each with an
exercise price of $41.13 and an expiration date of May 18,
2015.
|
43
|
|
|
|
|
Mr. Teixeira: 10,000 options and 5,276
associated accrued DEUs; exercise prices of $19.75 and $20.75
per option and expiration dates of June 24, 2009 and
May 18, 2010.
|
|
|
|
Mr. Zollars: 10,000 options; exercise prices of
$24.47 and $27.56 per option and expiration dates of
June 12, 2012 and May 20, 2013.
|
|
|
|
Ms. Zulberti: 10,000 options; each with an
exercise price of $41.13 and an expiration date of May 18,
2015.
|
(5) Mr. Brooksher
and Mr. Rising retired from our board on May 9, 2008.
(6) Amount
represents the costs incurred by Mr. Brooksher in
connection with the services he provides under his advisory
agreement that were paid by us and includes information
technology support and travel costs. See the narrative
discussion that follows this table for additional information on
the advisory agreement.
(7) Trustees
may also serve on our advisory committees in addition to their
service on our board. The amount in column (b) includes
$5,000 of fees earned by Mr. Jacobs for service on our Asia
Advisory Committee in 2008. The fees were paid to him in cash.
Mr. Teixeira serves on our European Advisory Committee, but
no meetings were held in 2008, so no additional fees were earned.
(8) During
2008, Mr. Teixeira exercised 2,500 options at an exercise
price of $20.80 for an aggregate exercise price of $52,000. The
aggregate value of the common shares received by
Mr. Teixeira from the exercises was $156,505, resulting in
an aggregate gain to him of $104,505. In connection with this
exercise, 719 DEUs were also distributed to Mr. Teixeira.
Narrative
Discussion to the Trustee Compensation for Fiscal Year 2008
Table
The compensation packages for the outside members of our board
include both cash and equity components. The equity component is
awarded under the terms of the 2006 Long-Term Incentive Plan and
our 2000 Share Option Plan for Outside Trustees. Our
executive officers who serve as trustees do not receive any
additional compensation for service on the board.
The cash component of our compensation to outside trustees
consists of an annual retainer and fees for attending meetings
and serving as chairs of committees. Trustees may defer the
receipt of their fees until after their service on our board is
terminated under our Deferred Fee Plan for Trustees.
Additionally, trustees may elect to have the amount of fees
earned deposited into the DRP. Retainers and fees paid to our
outside trustees are as follows:
|
|
|
|
|
Annual retainer: $50,000
|
|
|
|
Annual retainer for serving as lead outside trustee: $25,000
|
|
|
|
Annual retainer for serving as chairman of a committee: $10,000
except the board governance and nomination and the
sustainability committees which are $7,500
|
|
|
|
Attendance at board meetings: $1,500 per meeting
|
|
|
|
Attendance at committee meetings, except for earnings review
meetings of the audit committee: $1,500 per meeting
|
Fees that are deferred are credited with our common shares to a
hypothetical fee deferral account. The number of hypothetical
common shares credited is based on the closing price of our
common shares as of the date of deferral. The common shares in
the hypothetical account can earn dividends as if the number of
common shares in the account were outstanding in the name of the
trustee. Upon retirement from the board, the trustee is issued
the number of common shares included in his or her hypothetical
fee deferral account. However, each participating trustee has
elected to defer receipt of such common shares until more than
60 days following his or her retirement.
The equity component of our compensation to trustees consists of
annual awards of DSUs that are fully vested as of the date of
the grant. We awarded DSUs with a value of approximately $50,000
on the award date, generally at the time of our annual
shareholders meeting in May, for each of 2004, 2005, and
2006. In 2007 and 2008, the value of the DSUs awarded to our
outside trustees was $75,000. DSUs accrue fully vested DEUs over
the period that the underlying DSUs are outstanding.
The board adopted ownership guidelines for our trustees that
require our trustees to own our common shares with an aggregate
market value equal to $250,000 (which is five times their annual
retainer for 2008). Each trustee has three years from the date
the guidelines were adopted, or the date on which the trustee
became a member of our board, in which to comply with the
guidelines. In December 2008, in light of current global
economic conditions and recent market prices of our common
shares, the board suspended the requirement for
44
our trustees until further action is taken by the board. See
additional discussion under Compensation
Discussion and Analysis.
We have an advisory agreement with Mr. Brooksher pursuant
to which he provides certain strategic advice to the company at
the request of our chief executive officer. We pay him an annual
fee of $400,000 (payable through June 2013) under the
agreement. We provide Mr. Brooksher with office space,
administrative support, secretarial support, and travel
assistance under the agreement for which we bear no incremental
cost. We also reimburse Mr. Brooksher for his costs
incurred relating to his advisory duties under the advisory
agreement, primarily travel costs and information technology
support. The costs that are reimbursed are included as All
Other Compensation in the trustee compensation table.
Mr. Jacobs serves on our Asia Advisory Committee. We
compensate Mr. Jacobs for the services he provides on this
committee in the same manner as we compensate the other members
of the committee who are not trustees, including reimbursement
of reasonable travel costs incurred to attend the
committees meetings. The amount paid to Mr. Jacobs
for these services in 2008 are included in column (b) of
the Trustee Compensation Table for Fiscal Year 2008.
Mr. Teixeira serves on our European Advisory Committee, but
no meetings were held in 2008.
We reimburse our trustees for reasonable travel costs incurred
to attend the meetings of the board and its committees.
EQUITY
COMPENSATION PLANS
The 2006 Long-Term Incentive Plan and the 2000 Share Option
Plan for Outside Trustees, as amended and restated in 2008, and
their predecessor plans are the primary vehicles under which we
have made equity-based compensation awards to our named
executive officers and our outside trustees. The 2006 Long-Term
Incentive Plan is more fully described in
Compensation Discussion and Analysis. In
addition, we have an Employee Share Purchase Plan (ESPP), under
which we have reserved shares that may be purchased by employees
at a discounted price. Information regarding the common shares
that may be issued under these plans as of December 31,
2008, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# of Securities Remaining
|
|
|
# of Securities to be Issued
|
|
|
Weighted-Average
|
|
|
Available for Future Issuance
|
|
|
Upon Exercise of
|
|
|
Exercise Price of
|
|
|
Under Equity Compensation
|
|
|
Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
Plans (Excluding Securities
|
Plan Category
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in Column
(b)
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
Equity compensation plans approved by security
holders(1)(2)(3)
|
|
|
12,119,930
|
|
|
|
$
|
31.76
|
|
|
|
|
8,250,184
|
|
Equity compensation plans not approved by security
holders(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
amount in column (b) includes 7,779,747 common shares that
can be issued upon the exercise of outstanding share options (of
which 5,526,718 are vested to the holder) and 4,340,183
outstanding share awards, including DEUs associated with both
outstanding share options and share awards, (of which 1,696,783
are vested to the holder).
(2) The
weighted-average exercise price in column (c) relates to
the 7,779,747 outstanding share options reflected in column (b).
Of the amount in column (b), 4,340,183 shares will be
issued for no consideration, generally resulting from the
granting of share awards (RSUs, CPSs, PSAs, and DEUs).
(3) The
amount in column (d) includes 3,537,666 common shares that
are reserved for issuance under our equity compensation plans
and 4,712,518 common shares that are reserved for issuance under
our ESPP. In January, 2009, we issued 46,794 of our common
shares to employees based on their participation in the ESPP
from July 1, 2008 to December 31, 2008. Under the
ESPP, participating employees may purchase our common shares at
a discounted price of 85% of the market price, as defined. The
aggregate fair value of common shares that an individual
employee can acquire in a calendar year under the ESPP is
$25,000.
(4) All
of our equity compensation plans have been approved by our
shareholders.
45
The purpose of the audit committee is to be an informed,
vigilant, and effective overseer of our financial accounting and
reporting processes consistent with risk mitigation appropriate
in the circumstances. The committee is directly responsible for
the appointment, compensation, and oversight of our independent
public accounting firm. The committee is comprised of the five
trustees named below. Each member of the committee is
independent as defined by the SEC and in the NYSE listing
standards. In addition, our board has determined that D. Michael
Steuert is an audit committee financial expert as defined by SEC
rules. Management is responsible for the companys internal
controls and the financial reporting process. The companys
independent registered public accounting firm is responsible for
performing an independent audit of the companys
consolidated financial statements and the effectiveness of the
companys internal control over financial reporting in
accordance with the standards of the Public Company Accounting
Oversight Board (United States), and issuing reports thereon.
The committee is responsible for overseeing the conduct of these
activities. The committees function is more fully
described in its charter which has been approved by our board.
The charter can be viewed, together with any future changes, on
our website at
http://ir.prologis.com/governance.cfm.
We have reviewed and discussed the companys audited
financial statements for the fiscal year ended December 31,
2008, and unaudited financial statements for the quarterly
periods ended March 31, June 30, and
September 30, 2008, with management and KPMG LLP, the
companys independent registered public accounting firm. We
also reviewed and discussed managements assessment of the
effectiveness of the companys internal control over
financial reporting. The committee has discussed with KPMG LLP
the matters that are required to be discussed by Statement on
Auditing Standards No. 61 (Communication With Audit
Committees), as amended by the Auditing Standards Board of
the American Institute of Certified Public Accountants. KPMG LLP
has provided to the company the written disclosures and the
letter required by applicable requirements of the Public Company
Accounting Oversight Board regarding their communications with
the audit committee concerning independence, and the audit
committee has discussed with KPMG LLP, its independence. The
committee also concluded that KPMG LLPs performance of
non-audit services, as pre-approved by the committee and
described in the next section, to us and our affiliates does not
impair KPMG LLPs independence.
Based on the considerations referred to above, the audit
committee recommended to our board of trustees that the audited
financial statements be included in our Annual Report on
Form 10-K
for 2008. The foregoing report is provided by the following
outside trustees, who constitute the committee.
D. Michael Steuert (Chair)
George L. Fotiades
Christine N. Garvey
Donald P. Jacobs
Andrea M. Zulberti
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
In addition to retaining KPMG LLP to audit our consolidated
financial statements for 2008, we retained KPMG LLP to provide
certain tax and other services in 2008. In the course of KPMG
LLPs provision of services on our behalf, we recognize the
importance of KPMG LLPs ability to maintain objectivity
and independence in its audit of our financial statements and
the importance of minimizing any relationships that could appear
to impair that objectivity. To that end, the audit committee has
adopted policies and procedures governing the pre-approval of
audit and non-audit work performed by our independent registered
public accounting firm. The independent registered public
accounting firm is authorized to perform specified pre-approved
services up to certain annual amounts which vary by the type of
service provided. Individual engagements anticipated to exceed
pre-established thresholds must be separately approved. All of
the fees reflected below for 2008 were either specifically
pre-approved by the audit committee or pre-approved pursuant to
the audit committees Audit and Non-Audit Services
Pre-Approval Policy. These policies and procedures also detail
certain services which the independent registered public
accounting firm is prohibited from providing to the company.
46
The following table represents fees for professional audit
services rendered by KPMG LLP for the audit of the
companys consolidated financial statements for 2008 and
2007 and fees billed for other services rendered by KPMG LLP:
|
|
|
|
|
|
|
|
|
|
Types of Fees
|
|
2008
|
|
|
|
2007
|
|
Audit
fees(1)
|
|
$
|
3,371,018
|
|
|
|
$
|
3,193,323
|
|
Audit-related
fees(2)
|
|
|
24,000
|
|
|
|
|
22,800
|
|
Tax
fees(3)
|
|
|
681,023
|
|
|
|
|
489,814
|
|
All other
fees(4)
|
|
|
2,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
$
|
4,078,959
|
|
|
|
$
|
3,705,937
|
|
|
|
|
|
|
|
|
|
|
|
(1) Audit
fees consists of fees for professional services for the audit of
our consolidated financial statements included in our Annual
Report on
Form 10-K
and the review of our consolidated financial statements included
in our Quarterly Reports on
Form 10-Q,
including all services required to comply with the standards of
the Public Company Accounting Oversight Board (United States),
and fees associated with performing the integrated audit of
internal controls over financial reporting (Sarbanes-Oxley
Section 404 work). Additionally, amounts include fees for
services associated with comfort letters, statutory audits, and
reviews of documents filed with the SEC (fees for registration
statements and comfort letters in 2008 were $180,250 and 2007
were $176,450).
(2) Audit-related
fees consist of fees for assurance and related services that are
traditionally performed by KPMG LLP, including employee benefit
plan audits.
(3) Tax
fees are primarily fees for tax compliance and tax advice.
(4) All
other fees include fees billed for services not included in the
foregoing categories. During 2008 KPMG LLP provided technical
training services.
|
|
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM |
|
KPMG LLP has been appointed by the audit committee of the board
as our independent registered public accounting firm for the
year 2009. KPMG LLP was our independent registered public
accounting firm for the year 2008. We are requesting our
shareholders to ratify the appointment of KPMG LLP as our
independent registered public accounting firm for the year 2009.
In the event shareholders do not approve the appointment, the
appointment will be reconsidered by the audit committee.
KMPG LLP representatives are expected to attend the 2009 annual
meeting. They will have an opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate shareholder questions.
The board of trustees unanimously recommends that the
shareholders vote FOR the ratification of the appointment of
KPMG LLP as our independent registered public accounting
firm.
ADDITIONAL
INFORMATION
|
|
|
Shareholder
Proposals for Inclusion in Next Years Proxy
Statement
|
To be considered for inclusion in next years proxy
statement, shareholder proposals must be received at our
principal executive offices no later than the close of business
on December 9, 2009. Proposals should be addressed to
Edward S. Nekritz, Secretary, ProLogis, 4545 Airport Way,
Denver, CO 80239.
|
|
|
Shareholder
Nominations and Other Shareholder Proposals for Presentation at
Next Years Annual Meeting
|
For any shareholder nomination or proposal that is not submitted
for inclusion in next years proxy statement but is instead
sought to be presented directly at the 2010 annual meeting, our
bylaws permit such a presentation if: (i) a
shareholders written notice of the nominee or proposal and
any required supporting information is received by our secretary
during the period from 90 to 120 days before the first
anniversary date of the previous years annual meeting and
(ii) it meets the requirements of our bylaws and applicable
SEC requirements. For
47
consideration at the 2009 annual meeting, a shareholder nominee
or proposal not submitted by the deadline for inclusion in the
2010 proxy statement must be received by us between
January 20, 2010 and February 19, 2010. Notices of
intention to present proposals at the 2010 annual meeting should
be addressed to Edward S. Nekritz, Secretary, ProLogis, 4545
Airport Way, Denver, CO 80239.
Common shareholders of record at the close of business on
March 23, 2009 will be eligible to vote at the meeting on
the basis of one vote for each share held. On such date there
were 267,784,381 common shares outstanding. There is no right to
cumulative voting and a majority of the holders of outstanding
common shares represented in person or by proxy at the 2009
annual meeting will constitute a quorum.
If your shares are held in a bank or brokerage account, you will
receive proxy materials from your bank or broker, which will
include voting instructions. If you would like to attend the
annual meeting and vote these shares in person, you must obtain
a proxy from your bank or broker. You must request this form
from your bank or broker; they will not automatically supply one
to you.
|
|
|
Vote Required for
Approval
|
Assuming the presence of a quorum:
(1) trustees must be elected by the vote of a majority of
all the votes cast in person or by proxy at the 2009 annual
meeting by shareholders entitled to vote. For this purpose, a
majority of the votes cast means that the number of common
shares that are cast and are voted for the election
of a trustee must exceed the number of common shares that are
withheld from his or her election.
(2) the ratification of the appointment of the independent
registered public accounting firm must be approved by the
affirmative vote of a majority of the common shares voted in
person or by proxy at the 2009 annual meeting by shareholders
entitled to vote.
Abstentions and broker non-votes, if any, will have no effect on
the outcome of the matters to be voted on at the meeting.
Abstentions and broker non-votes are counted for purposes of
determining whether a quorum is reached.
|
|
|
Manner for Voting
Proxies
|
The common shares represented by all valid proxies received
through the Internet, by telephone, or by mail will be voted in
the manner specified. Where specific choices are not indicated,
the common shares represented by all valid proxies received will
be voted: (i) for the nominees for trustee named earlier in
this proxy statement and (ii) for ratification of the
appointment of our independent registered public accounting
firm. The proxies, in their discretion, are further authorized
to vote on other matters which may properly come before the 2009
annual meeting of shareholders and any adjournments or
postponements of the meeting. The board knows of no other
matters that may be presented to the meeting.
|
|
|
Solicitation of
Proxies
|
Proxies may be solicited on behalf of the board by mail,
telephone, other electronic means, or in person. Copies of proxy
materials and our 2008 annual report may be supplied to brokers,
dealers, banks, and voting trustees, or their nominees, for the
purpose of soliciting proxies from beneficial owners, and we
will reimburse such record holders for their reasonable
expenses. Proxies may be solicited by officers or employees of
the company, none of whom will receive additional compensation.
We have engaged Georgeson Shareholder Communications, Inc. to
assist in the solicitation of proxies from shareholders at a fee
of approximately $8,000, plus reimbursement of reasonable
out-of-pocket expenses.
|
|
|
Attendance at the
2009 Annual Meeting
|
If you are a registered owner of our common shares and plan to
attend the 2009 annual meeting in person, you should detach and
retain the admission ticket attached to your printed proxy card.
An admission ticket is also provided with the Notice of Internet
Availability.
48
Beneficial owners whose ownership is registered under another
partys name and who plan to attend the meeting in person
may obtain admission tickets in advance by sending written
requests, along with proof of ownership, such as a bank or
brokerage firm account statement, to Edward S. Nekritz,
Secretary, ProLogis, 4545 Airport Way, Denver, CO 80239.
Record owners and beneficial owners (including holders of valid
proxies) who do not present admission tickets at the meeting
will be admitted upon verification of ownership at the
admissions counter at the annual meeting. Please contact
Investor Relations, ProLogis, 4545 Airport Way, Denver, CO
80239,
(800) 820-0181
if you need directions to the location of our annual meeting.
|
|
|
Electronic Access
to Proxy Statement and Annual Report
|
This proxy statement and our 2008 annual report to shareholders,
including our Annual Report on
Form 10-K,
are available at
http://ir.prologis.com.
Shareholders can receive future annual reports, proxy
statements, and forms of proxy electronically by registering at
www.icsdelivery.com/pld. Once registered, you will be
notified by e-mail when materials are available electronically
for your review. You will also be given a website link to
authorize your proxy via the Internet. If your shares are held
through a bank, broker, or other holder of record, they can
instruct you on selecting this option. You can notify us at any
time if you want to resume mail delivery by contacting Investor
Relations, ProLogis, 4545 Airport Way, Denver, CO 80239, (800)
820-0181.
Our 2008 annual report to shareholders, which includes a copy
of our Annual Report on
Form 10-K
for the year ended December 31, 2008 (which includes our
consolidated financial statements), is mailed to shareholders
along with this proxy statement, if a request is made to receive
printed proxy materials or if you participant in our 401(k)
Plan. Otherwise, the Notice of Internet Availability provides
information on how you may access our 2008 annual report and
Notice of Proxy through the Internet. We will provide copies of
the annual report to requesting shareholders, free of charge, by
contacting Investor Relations, ProLogis, 4545 Airport Way,
Denver, CO 80239,
(800) 820-0181.
|
|
|
Delivery of
Documents to Shareholders Sharing an Address
|
If you share an address with any of our other shareholders, your
household might receive only one copy of the Notice of Internet
Availability or our annual report and proxy statement, as part
of our Householding Program, which is aimed at reducing costs.
To request additional copies of these materials for each
shareholder in your household for the current year, please
contact Investor Relations ProLogis, 4545 Airport Way, Denver,
CO 80239,
(800) 820-0181.
To revoke your consent for future mailings, please contact
Broadridge, Householding Department, 51 Mercedes Way, Edgewood,
NJ 11717 (telephone:
(800) 542-1061).
You will be removed from the Householding Program within
30 days.
|
|
|
Section 16(a)
Beneficial Ownership Reporting Compliance
|
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our trustees, certain officers, and certain
beneficial owners of our common shares to file reports of
holdings and transactions in our common shares with the SEC and
the NYSE. Except as provided in the next sentence, based on our
records and other information available to us, we believe that,
in 2008, all of the above persons and entities met all
applicable SEC filing requirements. Mr. Rakowich and
Mr. Fotiades each failed to file one Form 4 each
relating to a single transaction on a timely basis in 2008.
Messrs. Feinberg, Fotiades, Jackson, Jacobs, Steuert,
Teixeira, and Zollars, Ms. Garvey, and Ms. Zulberti
each failed to file a Form 5 each relating to a single
transaction on a timely basis in 2008.
We do not anticipate any other business to be brought before the
2009 annual meeting. In addition to the scheduled items,
however, the meeting may consider properly presented shareholder
proposals and matters relating to the conduct of the meeting. As
to any other business, the proxies, in their discretion, are
authorized to vote on other matters which may properly come
before the meeting and any adjournments or postponements of the
meeting.
April 8, 2009
Denver, Colorado
49
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Computershare
P.O. Box 43010
Providence, RI 02940-3010 |
YOUR VOTE IS IMPORTANT!
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M.. Eastern Time the day before the
meeting date. Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an electronic
voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by ProLogis in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy
cards and annual reports electronically via e-mail or the Internet. To sign
up for electronic delivery, please follow the instructions above to vote
using the Internet and, when prompted, indicate that you agree to receive or
access proxy materials electronically in future years.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717.
Do not return your Proxy Card if you are authorizing your proxy by telephone
or Internet.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: PRLGO1P73063
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PROLOGIS
The Board of Trustees recommends a vote FOR the Election of Trustees (Proposal 1).
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1. |
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Election of Trustees: |
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Election of the following persons as Trustees |
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For |
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Withhold |
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For All |
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To withhold authority to vote for any |
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Nominees: |
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All |
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All |
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Except |
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individual nominee(s), mark For All Except
and write the number(s) of the nominee(s) on
the line below. |
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01) |
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Stephen L. Feinberg |
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06) |
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Walter C. Rakowich |
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