Exhibit 10.1
SEPARATION AGREEMENT
This Separation
Agreement (the “Agreement”) is made the 13th day of
July 2005 (the “Effective Date”) between ProLogis
(“ProLogis”) and John W. Seiple, Jr.
(“Executive”);
WITNESSETH THAT:
WHEREAS, ProLogis
has entered into that certain Merger Agreement dated as of
June 5, 2005 with Palmtree Acquisition Corporation
(“Merger Sub”) and Catellus Development Corporation
(the “Merger Agreement”);
WHEREAS, ProLogis
and Executive have agreed that Executive’s employment with
ProLogis will terminate as of midnight December 31, 2005 (the
“Termination Date”) and will be announced at
ProLogis’s discretion on or prior to January 1, 2006 and
that, during the period beginning on the Effective Date and ending
on the Termination Date (the “Continuing Service
Period”), Executive will provide certain consulting services
to ProLogis and will participate in certain integration activities
relating to the transactions contemplated by the Merger Agreement
(the “Merger”); and
WHEREAS, ProLogis
has determined that it is appropriate to provide certain separation
benefits to Executive in connection with his termination and as
consideration for Executive’s release of claims against
ProLogis and its affiliates;
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth
below, it is hereby agreed and covenanted by ProLogis and Executive
as follows:
1.
Duties . Executive hereby agrees that, for the portion of
the Continuing Service Period prior to the effective time of the
Merger (the “Pre-Merger Service Period”), Executive
shall have the same title with ProLogis as he had immediately prior
to the Effective Date but he shall provide only those services
expressly requested from time to time by the Chief Executive
Officer of ProLogis (the “CEO”); provided, however,
that during the Pre-Merger Service Period, Executive’s
service commitment shall not exceed his service commitment
immediately prior to the Effective Date and, during such period, he
will not be assigned duties that are materially inconsistent with
his duties for ProLogis immediately prior to the Effective Date
(although the duties that he is requested to perform may be fewer
than those he performed immediately prior to the Effective Date).
As of the effective time of the Merger, Executive shall resign his
officer title and responsibilities with ProLogis and, for the
portion of the Continuing Service Period beginning at the effective
time of the Merger, he shall remain an employee of ProLogis through
midnight of December 31, 2005 but, during such period, he
shall only be requested to provide advice relating to, and shall be
available for consultation regarding, ProLogis’s North
American development activities, market trends and integration
activities relating to the Merger to the extent requested by the
CEO. The resignation by Executive of his officer title and
responsibilities shall not affect any benefits or entitlements due
Executive under this Agreement. Notwithstanding the foregoing, the
CEO may, at any time during the Continuing Service Period, request
that Executive cease to perform any or all duties for ProLogis
and/or that he provide any or all of his duties from a location
other than on the premises of ProLogis or any of its
affiliates;
provided, however, that the
performance or non-performance of duties by Executive shall not
affect ProLogis’s obligations under this Agreement, including
but not limited to its obligation to make payments or provide
benefits to Executive pursuant to this Agreement.
2.
Payments . In exchange for Executive’s performance of
services under this Agreement and subject to the terms and
conditions of this Agreement, he shall be entitled to the following
payments and benefits:
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(a)
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For
the Continuing Service Period, Executive shall continue to be paid
his base salary as in effect immediately prior to the Effective
Date and he shall continue to participate in ProLogis employee
benefit plans and programs in which he participated immediately
prior to the Effective Date subject to the terms and conditions
thereof.
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(b)
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Executive shall be paid $350,000
(the “Target Bonus”) which shall be in full
satisfaction of any annual target performance bonus to which he may
otherwise be entitled under ProLogis’s annual performance
bonus program. The Target Bonus shall be paid to Executive in
January, 2006.
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(c)
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The
18,000 performance share awards granted to Executive under the
ProLogis 1997 Long-Term Incentive Plan (the “LTIP”) in
2004 and described as Performance Shares Earned 12/31/05 in
Exhibit B attached hereto and incorporated herein by this
reference, shall be deemed earned and fully vested as of the
Effective Date as though all performance targets applicable thereto
had been met. The foregoing performance share awards will be
settled in January, 2006.
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(d)
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To
the extent not previously vested pursuant to the terms thereof, all
equity-based awards granted to Executive under the LTIP, and all
outstanding stock options, performance share awards and restricted
shares (including any dividend equivalent units attributable
thereto), that are granted or awarded under the respective
agreements as of the Effective Date shall be deemed fully earned
and vested as of the Effective Date. These awards include the Stock
Options, Restricted Shares and Performance Share set forth in
Exhibit B attached hereto and any similar awards previously
granted or awarded to Executive prior to the Effective Date. With
respect to all stock options, Executive shall have until
December 31, 2006 to exercise such stock option awards. All
restricted shares and performance shares will be settled in
January, 2006.
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(e)
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As
soon as practicable after December 31, 2005 but in no event
later than January 31, 2006, Executive shall be paid a
$2.5 million cash payment.
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(f)
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ProLogis agrees to allow Executive
to direct the distribution of performance shares and restricted
shares to a family trust or similar entity, to the extent permitted
for similarly situated executives under the terms of the
LTIP.
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Notwithstanding any other
provision of this Agreement, in no event shall Executive be
entitled to receive any amounts, rights, or benefits under this
Agreement unless and until he executes a
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release of claims in the form set
forth in Exhibit A (the “Release”) and such
Release becomes effective. The Release is hereby incorporated into
this Agreement and forms a part of this Agreement.
3.
Confidential Information; Other Obligations of Executive
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(a)
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Executive agrees that, during the
Continuing Service Period and at all times thereafter:
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(i)
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Except as may be required by the
lawful order of a court or agency of competent jurisdiction, except
as necessary to carry out his duties to ProLogis and its
affiliates, or except to the extent that Executive has express
authorization from ProLogis, Executive agrees to keep secret and
confidential indefinitely, all Confidential Information, and not to
disclose the same, either directly or indirectly, to any other
person, firm, or business entity, or to use it in any
way.
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(ii)
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To
the extent that any court or agency seeks to have Executive
disclose Confidential Information, he shall promptly inform
ProLogis, and he shall take such reasonable steps to prevent
disclosure of Confidential Information until ProLogis has been
informed of such requested disclosure, and ProLogis has an
opportunity to respond to such court or agency. To the extent that
Executive obtains information on behalf of ProLogis or any of its
affiliates that may be subject to attorney-client privilege as to
ProLogis’s attorneys, Executive shall take reasonable steps
to maintain the confidentiality of such information and to preserve
such privilege.
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(iii)
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Nothing in the foregoing provisions
of this paragraph 3(a) shall be construed so as to prevent
Executive from using, in connection with his employment for himself
or an employer other than ProLogis or any of its affiliates,
knowledge which was acquired by him during the course of his
employment with ProLogis and its affiliates, and which is generally
known to persons of his experience in other companies in the same
industry.
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(iv)
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For
purposes of this Agreement, the term “Confidential
Information” shall include all non-public information
(including, without limitation, information regarding litigation
and pending litigation) concerning ProLogis and its affiliates
which was acquired by or disclosed to Executive during the course
of his employment with ProLogis.
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(b)
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Prior to each of the Effective Date
and the Date of Termination , Executive shall ensure that he has
submitted proper documentation evidencing all of the vacation and
personal time taken by him during the 2005 calendar year prior to
the Effective Date and/or Date of Termination, as applicable, and,
prior to each of the Effective Date and the Date of Termination, he
shall submit documentation for
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business expenses that are subject
to reimbursement by ProLogis for all periods prior to the Effective
Date and/or Date of Termination, as applicable.
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(c)
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Prior to the Date of Termination or
upon the earlier request of ProLogis, Executive will promptly
return to ProLogis any and all records, documents, physical
property, information or other materials relating to the business
of ProLogis and its affiliates obtained by him during the course of
his employment
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