Corporate Information

Corporate Governance

We are committed to maintaining corporate governance practices that uphold a business environment of uncompromising integrity. We continue to enhance this objective through our governance policies and compliance with the Sarbanes-Oxley Act of 2002, FCPA and the rules of the New York Stock Exchange (NYSE).

[4.1] Our highest governance body is the Board of Trustees, followed by our senior executives. The ProLogis Board is responsible for reviewing and approving strategic plans, corporate actions and financial objectives and [4.6] adheres to a well-defined code of ethics. In addition, the Board participates in a company-wide ethics challenge conducted each year by our legal department. [4.1] Our Board Committee Charters include:

[4.2] After a management change in November 2008, the Chairman of the Board is now a separate position from the Chief Executive Officer; since May of 2007, the two positions had been combined.

[4.3] Our Board comprises 10 members who are elected annually, nine of whom are independent. We require that a majority of our Board be independent in accordance with the applicable provisions of the Securities Act of 1934 and the rules standards adopted by the NYSE. [4.7] Prior to the election of any member of the Board, the Board Governance and Nomination Committee screens all potential candidates with a brief biographical sketch, conducts interviews and retains executive search firms as necessary. The Committee may look at a variety of factors to identify potential candidates, including each individual’s focus on environmental, economic and social responsibility.

[4.8] At regular meetings, the Board reviews and evaluates internal mission statements, codes of conduct and principles related to economic, environmental and social performance. At the November 2008 Board meeting, a revised mission statement, which now includes sustainability, was developed and is as follows: "Our mission is to be the leading global provider of sustainable distribution facilities to the world’s largest users of distribution space and to maximize shareholder value through customer service, organizational excellence and our commitment to corporate social responsibility."

[4.9] The Board receives an official update on sustainability initiatives during quarterly Board meetings. In 2008, ProLogis created the position of Chief Sustainability Officer, who reports directly to the CEO and acts as the direct liaison between the Board and senior management on all environmental and social responsibility objectives. The three members of the Board Sustainability Committee are committed to analyzing the company's environmental stewardship on a regular basis, with the full Board responsible for evaluating the company's overall sustainability performance. To address economic sustainability, the Board Audit Committee is charged with monitoring the quality and integrity of the accounting and reporting practices of the company.

[4.10] The Board conducts an annual self-evaluation, based on previously defined criteria, of its performance and the performance of designated committees to determine whether the Board and committees are functioning effectively. This evaluation includes the Board Sustainability Committee. The results are documented in Board minutes and discussed by the full Board with any agreed changes incorporated in Board and committee charters as applicable.

In addition, RiskMetrics Group assigned ProLogis an Industry Corporate Governance Quotient (CGQ) rating of 91.3 in April of 2009. RiskMetrics Group's CGQ is the most widely recognized third-party measure of corporate governance. The organization ranks U.S. companies using 65 different variables across eight categories: board of directors, charter and bylaw provisions, executive and director compensation, audit, anti-takeover provisions, stock ownership, progressive practices and director education.

[4.5] Our compensation philosophy is to reward superior company and executive performance and to attract and retain highly competent executives upon whose judgment, initiative and leadership our success depends. Our Management Development and Compensation Committee focuses on completing regular performance reviews for our senior executives. The Committee is responsible for setting compensation levels in accordance with company goals and objectives; the Committee also oversees programs in hiring, motivating and retaining key employees and in creating short- and long-term shareholder value.

[4.11] We take precautionary measures to address risk management in operational planning and with new investments. We have operational controls in place for emergency management, carry comprehensive insurance coverage and conduct a thorough underwriting process. Before any capital is committed to a new investment, our investment committee reviews investment memos, conducts an economic analysis and often considers the social and environmental impacts of the investment.

[4.4] You may communicate with any of the trustees, individually or as a group, by writing to them c/o Edward S. Nekritz, General Counsel and 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.

For a complete description of ProLogis' corporate governance practices, please visit:
http://ir.prologis.com/governance.cfm.

©2009 ProLogis