UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 2010
PROLOGIS
(Exact name of registrant as specified in charter)
         
Maryland
(State or other jurisdiction
of Incorporation) 		  1-12846
(Commission File Number) 		  74-2604728
(I.R.S. Employer Identification
No.)
     
4545 Airport Way, Denver, Colorado   80239
     
(Address of Principal Executive Offices)   (Zip Code)
Registrant’s Telephone Number, including Area Code: (303) 567-5000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 5.02 Departure of Directors or Certain Other Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
     At ProLogis’ Annual Meeting of Shareholders held on May 14, 2010, the ProLogis shareholders approved amendments to the certain of ProLogis’ equity incentive plans as follows:
  1)   amendment to the ProLogis 2006 Long-Term Incentive Plan to increase the authorized number of common shares that may be issued under the plan by 14,500,000 and to increase the maximum number of common shares that may be granted to any one participant during any calendar year as full value awards that constitute performance-based compensation from 200,000 to 500,000 and
 
  2)   amendments to the ProLogis 2006 Long-Term Incentive Plan and the ProLogis 1997 Long-Term Incentive Plan to allow for a one-time share option exchange program for employees, other than named executive officers and trustees.
     Details of these amendments, including a description of the material terms of the share option exchange program under which certain outstanding share options could be exchanged for a lesser number of restricted share units, were included in the ProLogis Definitive Proxy Statement on Schedule 14A (File No. 001-12846) as filed with the Securities and Exchange Commission on March 30, 2010.
     The amendments to the ProLogis 2006 Long-Term Incentive Plan and the ProLogis 1997 Long-Term Incentive Plan are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
     The Board of Trustees on May 14, 2010 approved the ProLogis Deferred Fee Plan for Trustees, as Amended and Restated as of May 14, 2010 (the “Trustees Plan”). The amendments to the Trustees Plan clarifies that the source of the common shares for payments of benefits under the Trustees Plan is the ProLogis 2006 Long-Term Incentive Plan (or any successor thereto) and confirm that any shares previously issued in payment of benefits pursuant to the Trustees Plan were treated as a benefit under the ProLogis 2006 Long-Term Incentive Plan (or any predecessor thereto).
     The amended and restated Trustees Plan is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
     On May 14, 2010, ProLogis held its annual meeting of shareholders. A brief description of each matter voted upon at the annual meeting, including the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes with respect to each matter follows. Of the total 476,504,927 common shares outstanding as of the record date of March 16, 2010 that were entitled to vote, 401,330,187 common shares were represented at the meeting, either in person or by proxy.
Proposal 1: Election of Trustees
Each of the ten trustees proposed by the board of trustees for election or re-election was elected to serve until ProLogis’ 2011 annual meeting of shareholders, and until their successors are elected and qualified. The tabulation of votes on this proposal was as follows:
                         
Trustee Name   Votes For   Votes Withheld   Broker Non-Votes
Stephen L. Feinberg
    369,736,364       11,583,418       20,010,405  
George L. Fotiades
    379,564,505       1,755,277       20,010,405  
Christine N. Garvey
    380,019,014       1,300,768       20,010,405  
Lawrence V. Jackson
    377,535,084       3,784,698       20,010,405  
Donald P. Jacobs
    369,336,038       11,983,744       20,010,405  
Irving F. Lyons III
    379,873,521       1,446,261       20,010,405  
Walter C. Rakowich
    378,701,397       2,618,385       20,010,405  
D. Michael Steuert
    379,876,888       1,442,894       20,010,405  
J. Andre Teixeira
    378,335,062       2,984,720       20,010,405  
Andrea M. Zulberti
    379,659,292       1,660,490       20,010,405  
Proposal 2: Approve and Adopt an Amendment to the ProLogis 2006 Long-Term Incentive Plan—Increase authorized shares and certain individual grant limits
Shareholders approved an amendment to the ProLogis 2006 Long-Term Incentive Plan to increase the authorized number of common shares that may be issued under the plan by 14,500,000 and to increase the maximum number of common shares that may be granted to any one participant during any calendar year as full value awards that constitute performance-based compensation from 200,000 to 500,000. The tabulation of votes on this proposal was as follows:
         
Votes For:
    335,042,836  
Votes Against:
    45,592,367  
Abstentions:
    684,579  
Broker Non-Votes:
    20,010,405  

 

 

Proposal 3: Approve and Adopt Amendments to Certain ProLogis Equity Incentive Plans—Allow for a one-time share option exchange program for employees, other than named executive officers and trustees
Shareholders approved amendments to the ProLogis 2006 Long-Term Incentive Plan and the ProLogis 1997 Long-Term Incentive Plan to allow for a one-time share option exchange program for employees, other than named executive offices and trustees. The tabulation of votes on this proposal was as follows:
         
Votes For:
    294,711,665  
Votes Against:
    86,506,255  
Abstentions:
    101,862  
Broker Non-Votes:
    20,010,405  
Proposal 4: Ratification of the Appointment of Independent Registered Public Accounting Firm
Shareholders ratified the audit committee’s appointment of KPMG LLP as ProLogis’ independent registered public accounting firm for the year 2010. The tabulation of votes on this proposal was as follows:
         
Votes For:
    399,966,035  
Votes Against:
    1,223,230  
Abstentions:
    140,922  
Item 9.01. Financial Statements and Exhibits.
     (d)  Exhibits . The following documents have been filed as exhibits to this report and are incorporated by reference herein as described above.
     
Exhibit No.   Description
10.1
  Second Amendment of ProLogis 2006 Long-Term Incentive Plan
 
   
10.2
  First Amendment of ProLogis 1997 Long-Term Incentive Plan
 
   
10.3
  ProLogis Deferred Fee Plan for Trustees (As Amended and Restated Effective as of May 14, 2010)

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  PROLOGIS
  		 
Date: May 19, 2010  By:   /s/ Edward S. Nekritz    
    Name:   Edward S. Nekritz   
    Title:   General Counsel and Secretary   
 

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EXHIBIT INDEX
     
Exhibit No.   Description
10.1
  Second Amendment of ProLogis 2006 Long-Term Incentive Plan
 
   
10.2
  First Amendment of ProLogis 1997 Long-Term Incentive Plan
 
   
10.3
  ProLogis Deferred Fee Plan for Trustees (As Amended and Restated Effective as of May 14, 2010)

 

Exhibit 10.1
SECOND AMENDMENT OF
PROLOGIS 2006 LONG-TERM INCENTIVE PLAN
     WHEREAS, ProLogis maintains the ProLogis 2006 Long-Term Incentive Plan (the “2006 Plan”); and
     WHEREAS, amendment of the 2006 Plan is now considered desirable;
     NOW, THEREFORE, the 2006 Plan is hereby amended in the following particulars, all effective as of the date on which the shareholders of ProLogis approve the amendments to the 2006 Plan:
     1. By substituting the following for subsection 4.2(b) of the 2006 Plan:
     
“(b)
  Subject to the provisions of subsection 4.3, the number of Shares which may be issued with respect to Awards under the Plan shall be equal to the sum of: (i) 20,250,000 Shares; (ii) any Shares available for issuance as of the Approval Date under the Prior Plans and (iii) any shares that are represented by awards granted under the Prior Plans that are forfeited, expire, canceled or settled for cash after the Approval Date without delivery of Shares or which result in the forfeiture of the Shares to the extent that such Shares would have been added back to the reserve under the terms of the applicable Prior Plan. Except as otherwise provided herein, any Shares subject to an Award which for any reason is forfeited, expires or is terminated without issuance of Shares (including Shares that are not issued because Shares are tendered pursuant to subsection 4.7 and Shares attributable to Awards that are settled in cash) shall again be available under the Plan. Shares issued by ProLogis in connection with awards that are assumed or substituted in connection with a merger, acquisition or other corporate transaction shall not be counted against the number of Shares that may be issued with respect to Awards under the Plan.”
     2. By substituting the following for 4.2(g) of the 2006 Plan:
     
“(g)
  For Full Value Awards that are intended to be Performance-Based Compensation, no more than 500,000 Shares may be delivered pursuant to such Awards granted to any one Participant during any one calendar-year period (regardless of whether settlement of the Award is to occur prior to, at the time of, or after the time of vesting); provided that Awards described in this 4.2(g) that are intended to be Performance-Based Compensation shall be subject to the following:
  (i)   If the Awards are denominated in Shares but an equivalent amount of cash is delivered in lieu of delivery of Shares, the foregoing limit shall be applied based on the methodology used by the Committee to convert the number of Shares into cash.

 

 

  (ii)   If delivery of Shares or cash is deferred until after Shares have been earned, any adjustment in the amount delivered to reflect actual or deemed investment experience after the date the shares are earned shall be disregarded.”
     3. By adding the following new Section 8 to the 2006 Plan immediately following Section 7 thereof:
“SECTION 8

SHARE OPTION EXCHANGE
Notwithstanding any other provision of the Plan to the contrary, upon approval of this amendment to the Plan by ProLogis’ shareholders in accordance with the terms of the Plan, the Board or the Compensation Committee of the Board may provide for, and ProLogis may implement, a one-time-only share option exchange offer, pursuant to which certain outstanding share options (whether granted under the Plan or another plan of ProLogis) could, at the election of the person holding such share option, be tendered to ProLogis for cancellation in exchange for the issuance of a Full Value Award under the Plan consisting of a lesser amount of restricted share units under the Plan, Options or cash payments, provided that such one-time-only share option exchange offer is commenced within 12 months of the date of such shareholder approval. Options that are exchanged will not be added back to the authorized reserve under the Plan.”

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Exhibit 10.2
FIRST AMENDMENT OF
PROLOGIS 1997 LONG-TERM INCENTIVE PLAN
     WHEREAS, ProLogis maintains the ProLogis 1997 Long-Term Incentive Plan (the “1997 Plan”); and
     WHEREAS, amendment of the 1997 Plan is now considered desirable;
     NOW, THEREFORE, the 1997 Plan is hereby amended by adding the following new Section 9 to the 1997 Plan immediately following Section 8 thereof, all effective as of the date on which the shareholders of ProLogis approve the amendment to the 1997 Plan:
“SECTION 9

SHARE OPTION EXCHANGE
Notwithstanding any other provision of the Plan to the contrary, upon approval of the Trust’s shareholders in accordance with the terms of the Plan, the Board or the Compensation Committee of the Board may provide for, and the Trust may implement, a one-time-only share option exchange offer, pursuant to which certain outstanding share options (whether granted under the Plan or another plan of the Trust) could, at the election of the person holding such share option, be tendered to the Trust for cancellation in exchange for the issuance of a Full Value Award under the ProLogis 2006 Long-Term Incentive Plan (the ‘2006 Plan’) consisting of a lesser amount of restricted share units, Options (as defined in the 2006 Plan) or cash payments, provided that such one-time-only share option exchange offer is commenced within 12 months of the date of such shareholder approval. Options that are exchanged will not be added back to the authorized reserve under the Plan or the 2006 Plan.”

 

Exhibit 10.3
PROLOGIS
DEFERRED FEE PLAN FOR TRUSTEES
(As Amended and Restated Effective as of May 14, 2010)
      Section 1. History, Purpose and Effective Date . The ProLogis Deferred Fee Plan for Trustees (formerly, the Security Capital Industrial Trust Deferred Fee Plan for Trustees, the “Plan”) was established by ProLogis (the “Trust”) effective as of June 24, 1997 to provide non-employee trustees of the Trust with the opportunity to defer receipt of compensation otherwise payable to such Trustee by the Trust. The Plan is designed to aid the Trust in attracting and retaining as members of its Board of Trustees (the “Board”) persons whose abilities, experience and judgment can contribute to the well-being of the Trust. The Plan was amended and restated effective as of December 31, 2008 to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). It is intended that the provisions of the Plan conform to the requirements of section 409A of the Code and the Plan will be interpreted in all respects in accordance with such requirements. To the extent that benefits under the Plan are paid in the form of the Trust’s common shares of beneficial interest (“Common Shares”), the benefit shall be treated as a benefit under the ProLogis 2006 Long-Term Incentive Plan (or a successor thereto) (the “LTIP”).
      Section 2. Administration of the Plan . The Plan shall be administered by a committee of the Board consisting of two or more members of such Board who are not also employees of the Trust or any subsidiary of the Trust (the “Committee”), as designated by the Board in its sole discretion. In the absence of such a designation, the Board shall act as the Committee. The Committee shall conclusively interpret the provisions of the Plan and shall make all determinations under the Plan. The Committee shall act by vote or written consent of a majority of its members.
      Section 3. Source of Benefits . The amount of any benefit payable under the Plan shall be paid from the general assets of the Trust or from one or more trusts, the assets of which are subject to the claims of the Trust’s general creditors; provided, however, that, except as described below, nothing in this Plan shall require the Trust to establish any trust to provide benefits under the Plan. No Participant (as described in Section 4) or other individual entitled to benefits under the Plan shall have any right, title or interest whatsoever in any assets of the Trust or any of its affiliates or to any investment reserves, accounts or funds that the Trust may purchase, establish or accumulate to aid in providing the benefits under the Plan. Nothing contained in the Plan and no action taken pursuant to its provisions shall create a trust or fiduciary relationship of any kind between the Trust and any Participant or any other person. Neither a Participant nor a beneficiary of a Participant shall acquire any interest greater than that of an unsecured creditor of ProLogis. Notwithstanding the foregoing, in the event of a change or potential change in the ownership or control of the Trust which, in the opinion of the Board, could affect the payment of benefits hereunder, the Trust shall take such actions as it deems appropriate to protect each Participant’s Accounts

 

 

(as defined in Section 6) under the Plan, including the establishment and funding of a trust to satisfy the Trust’s obligations under the Plan, provided that the assets of any such trust shall be subject to the claims of the Trust’s general creditors.
      Section 4. Eligibility . Any member of the Board who is not an employee of the Trust or any affiliate thereof (an “Outside Trustee”) is eligible to become a “Participant” in the Plan by completing and filing a Deferral Election (as defined in Section 5) in accordance with the terms of the Plan.
      Section 5. Deferral Elections . Subject to such additional terms, conditions and limitations as the Committee may from time to time impose and the terms and conditions of the Plan, for any calendar year, an Outside Trustee may make an election to defer receipt of all or any portion of the retainer and committee fees (collectively, “Fees”) otherwise payable to the Outside Trustee for that calendar year by filing a “Deferral Election” with the Committee. Once made, an Outside Trustee’s Deferral Election shall carry over to future calendar years unless the Outside Trustee modifies or revokes the Deferral Election for future calendar years in accordance with the terms of the Plan. Deferral Elections shall be in writing and shall be filed with the Committee at such time and in such manner as the Committee shall provide; provided, however, that in no case shall a Deferral Election be made later than December 31 (or such earlier date specified by the Committee) of the year preceding the calendar year in which the Fees to which it relates would be earned by the Outside Trustee based on services performed and shall be irrevocable with respect to the calendar year to which it relates as of such December 31 or such earlier date specified by the Committee. An Outside Trustee who first becomes elected or appointed to the Board subsequent to January 1 of any calendar year may, by filing a Deferral Election within 30 days of his or her initial election or appointment to the Board, elect to defer Fees earned for services performed after his or her initial election or appointment to the Board and after the Deferral Election is filed. Any Deferral Election filed in accordance with the preceding sentence shall become irrevocable for the calendar year to which it relates as of the date on which it is filed with the Committee.
      Section 6. Accounts . Subject to the provisions of the Plan, the following “Accounts” shall be established in the name of each Participant:
  (a)   A “Phantom Share Account” which shall reflect the Fees, if any, which are deferred by such Participant in accordance with the terms of the Plan that would otherwise have been payable to the Participant in the form of the Common Shares and dividends thereon.
 
  (b)   A “Cash Account” which shall reflect the Fees, if any, which are deferred by such Participant in accordance with the terms of the Plan that would otherwise have been payable to the Participant in cash and the earnings attributable thereto.

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Accounts under the Plan shall be for recordkeeping purposes only. The Committee may establish such subaccounts within each Account as the Committee determines appropriate to administer the Plan. A Participant is always fully vested in the balance in his Accounts.
      Section 7. Accounting . The Accounts of each Participant shall be adjusted as follows:
  (a)   As of the date on which Fees would otherwise be paid to a Participant:
  (i)   each Participant’s Phantom Share Account shall be credited with that number of “share units” equal to the number of Common Shares, if any, that the Participant elected to defer as of such date in accordance with his or her Deferral Election; and
 
  (ii)   each Participant’s Cash Account shall be credited with the amount of cash Fees, if any, that the Participant elected to defer as of such date in accordance his or her Deferral Election.
  (b)   As of the effective date of any distribution to the Participant in accordance with the terms of the Plan:
  (i)   each Participant’s Phantom Share Account shall be debited with the number of share units, if any, distributed to such Participant as of such date from his or her Phantom Share Account; and
 
  (ii)   each Participant’s Cash Account shall be debited with the amount of cash, if any, distributed to such Participant as of such date from his or her Cash Account.
  (c)   As of the effective date of any dividends payable with respect to the Common Shares:
  (i)   If such dividend is payable in cash, the Participant’s Phantom Share Account shall be credited with an additional number of share units equal to (A) the cash dividend payable with respect to a Common Share, multiplied by (B) the number of share units in the Participant’s Phantom Share Account, if any, as of the applicable dividend record date, divided by (C) the Fair Market Value (as defined below) of a Common Share on the dividend payment date.
 
  (ii)   If such dividend is payable in Common Shares, the Participant’s Phantom Share Account shall be credited with an additional number of share units equal to (A) the number of shares distributed in the dividend with respect to a Common Share, multiplied by (B) the number of share units in the Participant’s Phantom Share Account, if any, as of the applicable dividend record date.

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  (d)   As of the last day of each calendar quarter (and, if applicable, as of the day immediately preceding the first Payment Date (as defined in Section 8) (each an “Accounting Date”), the balance in the Participant’s Cash Account, if any, shall be credited with interest, at the Investment Return Rate (defined below), compounded quarterly. Interest shall be prorated on a daily basis according to the balance in the Participant’s Account.
     For purposes of the Plan, the term “Fair Market Value” shall have the same meaning as under the LTIP and the term “Investment Return Rate” means the Trust’s average borrowing rate for the applicable calendar quarter.
      Section 8. Time and Form of Payment . Subject to the provisions of Sections 9 and 10 and 12, the following provisions of this Section 8, and the other terms and conditions of the Plan, the following shall apply with respect to the distribution of a Participant’s Account:
  (a)   Payment of a Participant’s Account balances, determined as of the day before Payment Date (as defined below) shall be made (or shall begin to be distributed) to the Participant as of the permitted Payment Dates and in the permitted Payment Form (as defined below), each as elected by the Participant in his first Deferral Election under the Plan (or, with respect to any person who was a Participant in the Plan immediately prior to the Effective Date, as elected in the Deferral Election on file with respect to the Participant on December 31, 2008).
 
  (b)   For purposes of the Plan, (i) permissible “Payment Forms” are (A) a lump sum payment or (B) a series of annual or quarterly installments for a period not to exceed ten years, and (ii) permissible “Payment Dates” are (A) a specified date, (B) the date on which the Participant’s service as an Outside Trustee terminates for any reason (the “Termination Date”), or (C) the earlier of a specified date or the Participant’s Termination Date.
 
  (c)   If no Payment Date is specified in a Participant’s first Deferral Election (or, if applicable, the election on file as of December 31, 2008), the Participant shall be deemed to have elected his or her Termination Date as the Payment Date. If no Payment Form is specified in a Participant’s first Deferral Election (or, if applicable, the election on file as of December 31, 2008), the Participant shall be deemed to have elected a lump sum as the Payment Form. Payments under the Plan shall be made (or shall begin) as soon as practicable (but in no event more than 30 days) after the applicable Payment Date.
 
  (d)   If payment of any portion of the Participant’s Account balance is to be made in the form of installment payments, the installment payment for the year in which the Payment Date occurs shall begin as soon as practicable (but not more than 30 days) after the Participant’s Payment Date and any

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      subsequent annual installments shall be paid in the calendar year following the calendar year in which the Payment Date occurs (at such time during such year as determined by the Committee). The amount of each installment payment shall be equal to the Participant’s Account balance, determined as of the Accounting Date immediately prior to the payment of the installment, divided by the number of installments remaining to be made, including the then current installment.
 
  (e)   Unless the Committee determines otherwise, share units shall be paid in the form of Common Shares, with the Participant receiving one Common Share for each share unit distributed (and cash equal to any fractional share unit). The amount in the Participant’s Cash Account, if any, shall be paid in cash.
Notwithstanding any other provision of the Plan to the contrary, in all cases, whether a Participant has had a Termination Date or other separation from service for purposes of the Plan shall be determined in accordance with the requirements of section 409A of the Code (and applicable guidance issued thereunder) relating to separations from service by applying the applicable default provisions.
      Section 9. Changes to Form of Payment . From and after the Effective Date, a Participant may change the Payment Date and/or Payment Form (including any Payment Date or Payment Form established pursuant to a deemed election pursuant to Section 8) once during his period of participation in the Plan after the Effective Date by filing an election with the Committee. Notwithstanding any other provision of the Plan to the contrary, any such election to change the Payment Date and/or Payment Form (a) shall not be effective until the date that is 12 months following the date on which it is filed with the Committee and (b) shall be effective only if it is filed with the Committee at least 12 months prior to the date on which payments are otherwise to be made (or begin) under the Plan (i.e., the date on which the first payment of the Participant’s Accounts is otherwise scheduled to begin pursuant to Section 8). If a Participant files an effective change to the Payment Date and/or Payment Form pursuant to this Section 9, payment of the Participant’s Account balance shall be distributed in accordance with the new payment election and such payments shall be made (or shall commence) as soon as practicable (but in no event more than 30 days) after the date which is the fifth anniversary of the date on which payment was to commence under the Participant’s prior Deferral Election (the “Deferred Commencement Date”). The amount of each distribution that is payable on or after the Deferred Commencement Date shall be determined in accordance with Section 8 by substituting the Deferred Commencement Date for the Payment Date in such Section 8.
      Section 10. Unforeseeable Emergency . The Committee may, pursuant to rules adopted by it and applied in a uniform manner, accelerate the date of distribution of a Participant’s Accounts because of an unforeseeable emergency at any time.

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“Unforeseeable Emergency” shall mean an unforeseeable, severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or his dependent (as defined in section 152(a) of the Code, without regard to section 152(b)(1), (b)(2) and (d)(1)(B) of the Code); (b) loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to the home not otherwise covered by insurance); or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Whether a Participant has an Unforeseeable Emergency shall be determined on the relevant facts and circumstances of the applicable situation but, in any case, a distribution shall not be considered to be on account of an Unforeseeable Emergency to the extent that the emergency is or may be relieved through reimbursement or compensation from insurance or otherwise or by liquidation of the Participant’s assets (to the extent that the liquidation of such assets would not cause severe financial hardship). Distributions on account of an Unforeseeable Emergency shall be limited to the amount reasonably necessary to satisfy the emergency need (including amounts necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the distribution). Distribution pursuant to this Section 10 of less than the Participant’s entire interest in the Plan shall be made pro rata from his Accounts. Subject to the foregoing, payment of any amount with respect to which a Participant has filed a request under this Section 10 shall be made in a lump sum as soon as practicable (but in no event more than 30 days) after approval of such request by the Committee.
      Section 11. Designation of Beneficiary . A Participant may designate a beneficiary or beneficiaries which shall be effective upon filing written notice with the Secretary of the Trust on the form provided for that purpose. If no beneficiary is designated, or if no designated beneficiary survives the Participant, the beneficiary shall be the Participant’s estate. If more than one beneficiary statement has been filed, the beneficiary or beneficiaries designated in the statement bearing the most recent date shall be deemed the valid beneficiary or beneficiaries.
      Section 12. Death of Participant or Beneficiary . In the event of a Participant’s death before he or she has received the full value of his or her Accounts, the then current value of the Participant’s Accounts shall be determined as of the Accounting Date immediately following death and such amount shall be paid to the beneficiary or beneficiaries of the deceased Participant as soon as practicable (but in no event more than 30 days) thereafter in a lump sum.
      Section 13. Adjustments on Recapitalization . In the event of a corporate transaction involving the Trust, the Committee shall adjust share units credited to Participants’ Accounts when an equitable adjustment is required to preserve the benefits or potential benefits thereof and the Committee may adjust share units in other situations (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, sale of assets or subsidiaries, combination or exchange of shares). Action by the Committee may include, in its sole discretion: (a) adjustment of the number and kind of

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shares which may be delivered under the Plan; and (b) any other adjustments that the Committee determines to be equitable.
      Section 14. Compliance with Securities and Other Laws . In no event shall the Trust be required to issue Common Shares to any person in settlement of a Participant’s Account if the issuance thereof would constitute a violation by either the Participant or the Trust of any provision of any law or regulation of any governmental authority or any national securities exchange. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Common Shares, the transfer of such Common Shares may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.
      Section 15. Assignability . No right to receive payments hereunder shall be transferable or assignable by a Participant or a beneficiary, except by will or by the laws of descent and distribution.
      Section 16. Amendment of Termination of Plan . This Plan may at anytime or from time to time be amended, modified or terminated by the Board, subject to the requirements of section 409A of the Code No amendment, modification or termination shall, without the consent of a Participant, adversely affect such Participant’s accruals on his or her prior elections.
      Section 17. Governing Law . This Plan shall be governed by and construed in accordance with the laws of the State of Maryland.

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