Company Name: ProLogis Trust
Public Availability Date: March 28, 2002

Document Sections:

INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]
January 18, 2002

By Messenger

Securities and Exchange Commission

Division of Corporation Finance

Office of Chief Counsel

Judiciary Plaza

450 Fifth Street, N.W.

Washington, D.C. 20549

Re: ProLogis Trust - Stockholder Proposal Submitted by Service Employees International Union

Dear Sir or Madam:

On behalf of ProLogis Trust, a Maryland real estate investment trust, and pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I hereby request confirmation that the Staff of the Securities and Exchange Commission will not recommend enforcement action if, in reliance on certain provisions of Rule 14a-8, we exclude a proposal submitted by Service Employees International Union ("SEIU") from our proxy materials for our 2002 annual meeting of shareholders. In compliance with Rule 14a-8(j)(1), this letter is submitted at least eighty (80) calendar days prior to the date on which we anticipate filing our definitive proxy statement and form of proxy relating to our 2002 annual meeting.

We received a letter from SEIU on November 29, 2001, submitting a proposal for consideration at our 2002 annual meeting of shareholders. The proposal (which, together with the accompanying statement in support, is attached as Exhibit A) reads as follows:

RESOLVED: That the shareholders of ProLogis Trust urge the Board of Trustees to take the measures necessary to change our Company's jurisdiction of incorporation from Maryland to Delaware.

Pursuant to Rule 14a-8(j), I have enclosed six copies of the proposal and this letter, which sets forth the grounds upon which we deem omission of the proposal to be proper. Pursuant to Rule 14a-8(j), a copy of this letter is being sent to the proponent to notify it of our intention to omit the proposal from our 2002 annual meeting proxy materials.

I believe that the proposal may be properly omitted from our proxy materials pursuant to Rule 14a-8 for the reasons set forth below.

I. The Proposal may be Properly Omitted Under Rule 14a-8(i)(1) Because the Proposal is not a Proper Subject for Action for Shareholders Under Maryland Law

Rule 14a-8(i)(1) provides that a shareholder proposal may be excluded from a proxy statement if "the proposal is not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization." The proposal is not a proper subject for the shareholders of a Maryland real estate investment trust ("REIT"). The only feasible means to change the jurisdiction over our trust from Maryland to Delaware would be to merge the trust with a Delaware entity that is permitted to elect to be treated as a REIT under the Internal Revenue Code. Section 8-501.1(d) of the Maryland REIT Law provides that in order to approve the merger of a Maryland REIT with another entity, the trustees must pass a resolution declaring that the terms of the proposed transaction are advisable and then direct that the transaction be submitted to a vote by the shareholders. The proposal by SEIU stands the methodology proscribed by Maryland on its head; it seeks to direct the trustees to take action to merge the trust into another entity, rather than permitting the board adopt a plan and bring it to the shareholders for approval. As such, it is an unlawful intrusion on the discretionary authority given to the trustees of a Maryland REIT. Accordingly, I believe that the proposal may be properly omitted under Rule 14a-8(i)(1) as it is improper under state law.

II. The Proposal may be Properly Omitted Under Rule 14a-8(i)(3) and 14a-9 as it is Materially False or Misleading

Rule 14a-8(i)(3) under the Exchange Act permits the exclusion of a shareholder proposal if the proposal or its supporting statement is "contrary to any of the Commission's proxy rules, including Rule 14a-9, which prohibits materially false or misleading statements in proxy soliciting materials." The supporting statement of the proposal contains a number of statements that are false or misleading within the meaning of Rule 14a-9.

The second paragraph of the supporting statement has the following quote from Insights magazine:

[The Maryland 1999 Unsolicited Takeovers Act] is an explicit break from the Delaware model, which has subjected boards attempting to use takeover defenses to heightened scrutiny and to increasing risks of personal liability. The Act expressly rejects this trend in Delaware law, offering seemingly unqualified protection for incumbent trustees and management. It has generated criticism from institutional investors and shareholder activists, who view it as a management entrenchment tool.

The excerpt cited by the author is out of context. The article, attached hereto as Exhibit B, provides a balanced look at the Unsolicited Takeovers Act, discussing different opinions of the Act and its provisions, finally concluding:

Maryland has maintained a modern and well-drafted corporations law. Its recent bold step to protect incumbent directors and management, especially at a time when Delaware law had swung in the opposite direction, should be applauded by Maryland corporations, their directors and counsel. Non-Maryland corporations should take heed.

The quote excerpted by SEIU suggests that the authors of the article found that the Maryland Unsolicited Takeovers Act is an unacceptable deviation from the Delaware model, when in fact, the article was presenting different perspectives on the Act, finally concluding that the Maryland model is a welcome change. In fact, the final sentence of the article reads that non-Maryland corporations should "take heed" of the Maryland Act, suggesting perhaps that non-Maryland entities consider organization in Maryland, the exact opposite of SEIU's proposal. SEIU should not be permitted to include this quote from Insights out of context as it lends unwarranted credibility to their position.

The particulars of the quote are also false and misleading. It implies that Maryland law does not subject trustees and management to any scrutiny, offering them "unqualified protection." This appears to refer to Section 2-405.1(f) of the Maryland General Corporation Law ("MGCL"). This section was revised in 1999 to provide that: "An act of a director relating to or affecting an acquisition or a potential acquisition of control of the corporation may not be subject to a higher duty or greater scrutiny than is applied to any other act of a director." This section is made applicable to REITs under Section 8-601.1 of the Maryland REIT Law. The trustee of a Maryland REIT has fiduciary duties similar to those of a director or REIT trustee in any other state; the Maryland legislature has merely clarified that the duties are not subject to heightened scrutiny in the case of an acquisition as they are in Delaware. To suggest that Maryland directors have "unqualified protection" is false and misleading.

The third paragraph of the proposal states that Maryland corporate law differs from Delaware law in "several key ways" and that an analysis of the differences may be found at the web site www.reform-reits.org. Entering this URL brings up the "Yahoo! Domains" web site; the Yahoo! Domains site suggests that Yahoo! has registered the URL www.reform-reits.org and is prepared to sell it to an interested party. The web site does not have any content regarding REITs or Maryland or Delaware law. It is false and misleading to suggest that an outside source has conducted an analysis of the differences between Maryland and Delaware law, finding "key" differences between the two where no such source exists.

In the fourth paragraph of the supporting statement, SEIU states that Maryland law permits trustees to consider the effect of an acquisition on non-shareholder constituencies and that Delaware law does not contain a similar "stakeholder" provision. This statement is also false and misleading. The right of a board to consider the interests of parties other than stockholders was recognized by the Supreme Court of Delaware in Unocal Corporation v. Mesa Petroleum Co., 493 A.2d 946 (Del. Sup. Ct. 1985). In Unocal, the court stated that defensive tactics by the board of a corporation that is the target of a takeover bid should entail an analysis by the directors of the bid and its effect on the corporate enterprise. The court continued, writing that "[e]xamples of such concerns may include: inadequacy of the price offered, nature and timing of the offer, questions of illegality, [and] the impact on `constituencies' other than shareholders (i.e., creditors, customers, employees, and perhaps even the community generally)...." Id. at 955. It is misleading for SEIU to draw a contrast between the law of Maryland and that of Delaware, implying that a difference exists, when Delaware law clearly recognizes the right of directors to consider the rights of constituencies other than stakeholders in considering a merger or acquisition.

The sixth paragraph of the supporting statement is also false and misleading. It states that:

Unless a company expressly opts out, under the Act the board of trustees of a REIT maywithout shareholder approval and even if contrary to a company's bylaws or charterclassify the board of trustees, require a two-thirds vote for the removal of trustees, and give the board the sole power to fill board vacancies occurring for any reason. Under Delaware law, adopting such provisions deviating from the charter would require shareholder approval.

This statement is misleading as it suggests that our declaration of trust does not already have such provisions. Our amended and restated declaration of trust already provides for a classified board of trustees, requires a two-thirds vote by either the shareholders or directors to remove a director and allows our board to fill vacancies occurring between annual meetings of shareholders, each of which provisions were contained in the amended and restated declaration of trust at the time it was approved by our shareholders. The supporting statement suggests that our declaration of trust does not have these provisions and that we could act in contravention of our declaration of trust to adopt these provisions. Because our declaration of trust already contains these provisions, this statement is false and misleading.

The seventh paragraph of the supporting statement is also false and misleading. SEIU states that:

With the passage of the Act in 1999, Maryland also became the first state in the nation to permit corporate charters to include a provision authorizing the board of trustees to amend the charter, without shareholder approval, to increase the authorized shares of stock of any or all classes. (emphasis in original).

The Maryland REIT Law has permitted the trustees of a Maryland REIT to amend a declaration of trust to increase or decrease the number of authorized shares without shareholder approval since October 1, 1995. See Maryland H.B. 749 (Attached as Exhibit C). SEIU suggests that this provision in the Maryland REIT Law was included as part of the Maryland Unsolicited takeovers Act of 1999, lending unwarranted credibility to their claim that the Act made broad changes to the scope of Maryland law in this regard.

For the reasons set forth above, I believe that the proposal may be excluded from our 2002 Proxy pursuant to Rule 14a-8(i)(3) and Rule 14a-9 as it is materially false or misleading.

III. Conclusion

For the foregoing reasons, I request your confirmation that the Staff will not recommend any enforcement action to the Commission if the proposal submitted by SEIU is omitted from our 2002 proxy. To the extent that the reasons set forth in this letter are based on matters of law, this letter also constitutes an opinion of counsel pursuant to Rule 14a-8(j)(2)(iii).

If the Staff has any questions or has formulated a response to my request, please contact me at 303/375-9292 or by facsimile at 303/576-2761.

Please acknowledge receipt of this letter by date-stamping the enclosed copy and returning it to the waiting messenger.

Very truly yours,

/s/

Edward S. Nekritz

Senior Vice President and General Counsel

Enclosures

cc: Service Employees International Union AFL-CIO, CLC

[APPENDIX 1]
SHAREHOLDER PROPOSAL

RESOLVED: That the shareholders of ProLogis Trust urge the Board of Trustees to take the measures necessary to change our Company's jurisdiction of incorporation from Maryland to Delaware.

SUPPORTING STATEMENT

Over the last several years, legislative changes to Maryland corporate law, including the 1999 Unsolicited Takeovers Act (the "Act") and the 2000 amendments to Maryland General Corporation Law and the Maryland REIT Law, have increased anti-takeover devices available to real estate investment trusts (REITs) incorporated in Maryland, and eroded some important shareholder rights.

According to one legal analysis of the 1999 Act, the law "is an explicit break from the Delaware model, which has subjected boards attempting to use takeover defenses to heightened scrutiny and to increasing risks of personal liability. The Act expressly rejects this trend in Delaware law offering seemingly unqualified protection for incumbent trustees and management. It has generated criticism from institutional investors and shareholder activists, who view it as a management entrenchment tool." [Insights, September, 1999]

As a result of the recent legislation, there are several key ways Maryland corporate law differs from Delaware law regarding and-takeover issues and shareholder rights (a more detailed analysis is available at www.reform-reits.org).

When considering the potential acquisition of the company, Maryland law now permits trustees to consider the effect of the potential acquisition on non-shareholder constituencies. This provision allows a company to "accept a lower priced offer that the trustees believe is more favorable to all of the company's constituencies." [Insights, September 1999]. Delaware law does not contain a "stakeholder" provision. In addition, the Act explicitly affirms that the "just say no" legal defense is available to trustees in Maryland, rejecting the Delaware courts' heightened scrutiny of trustees' decisions to reject unsolicited bids.

The Act specifically validates shareholder rights plane or "poison pills", including a trustee "alow hand" provision which limits new trustees from redeeming or terminating a poison pill for up to 180 days after they become trustees. Delaware courts have struck down "slow hand" provisions.

Unless a company expressly opts out, under the Act the board of trustees of a REIT maywithout shareholder approval and even if contrary to a company's bylaws or charterclassify the board of trustees, require a two-thirds vote for the removal of trustees, and give the board the sole power to fill board vacancies occurring for any reason. Under Delaware law, adopting such provisions deviating from the charter would require shareholder approval.

With the passage of the Act in 1999, Maryland also became the first state in the nation to permit corporate charters to include a provision authorizing the board of trustees to amend the charter, without shareholder approval, to increase the authorized shares of stock of any or all classes. Delaware requires shareholder approval to increase authorized shares of stock.

In light of the recent legislative changes to corporate law in Maryland, we believe reincorporating in Delaware would offer a more appropriate balance between the interests of shareholders, management, and trustees at our company.

[APPENDIX 2]
Exhibit A

November 28, 2001

Edward S. Nakritz

Senior Vice President and General Counsel

ProLogis Trust

14100 East 35\th/ Place

Aurora, Colorado 80011

Dear Mr. Nekritz:

We are submitting the enclosed resolution requesting that the Board of Trustees of ProLogis Trust take the necessary steps to change our Company's jurisdiction of incorporation from Maryland to Delaware.

The Service Employees International Union (SEIU) has owned 111 shares of ProLogis Trust for the requisite time period and intends to continue holding them through the date of the next annual meeting. SEIU members are also participants in many state, county, and municipal pension funds that are major holders of stock in US companies, including RETTs.

A representative of the SEIU will appear in person or by proxy to bring the resolution before the meeting.

Should you have any questions regarding this matter, please call Steve Abrecht, Trustee of Benefits at (202) 639-7612.

Sincerely,

/s/

Anna Burger

International Secretary-Treasurer

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[INQUIRY LETTER]
February 26, 2002

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549

Attention: Chief Counsel, Division of Corporation Finance

Re: Request by Prologis Trust to omit shareholder proposal submitted by the Service Employees International Union

Dear Sir/Madam,

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the Service Employees International Union ("SEIU") submitted a shareholder proposal (the "Proposal") to Prologis Trust ("Prologis" or the "Company"). The Proposal requests that Prologis's board take the necessary steps to change the Company's jurisdiction of incorporation from Maryland to Delaware.

In a letter to the Commission dated January 18, 2002 (the "No-Action Request"), Prologis stated that it intends to omit the Proposal from its proxy materials to be distributed to shareholders in connection with the Company's 2002 annual meeting of shareholders. Prologis argues that the Proposal is excludable pursuant to Rule 14a-8(i)(1), as an improper subject for shareholder action under Maryland law, because it usurps the power of the Company's trustees to initiate such a reincorporation. Prologis also urges that the Proposal may be omitted under Rule 14a-8(i)(3) because it contains false or misleading statements that violate Rule 14a-9. With the exceptions noted below, Prologis has failed to meet its burden of proving its entitlement to rely on either of those exclusions.

Improper Subject for Shareholder Action

Prologis contends that the Proposal's subject is an improper one for actions by shareholders under Maryland law because that law provides that reincorporation may be accomplished only by a merger of Prologis with a Delaware entity that is permitted to elect to be treated as a realestate investment trust ("REIT") under the Internal Revenue Code. Such a merger may be approved, Prologis says, citing section 8-501.1(d) of the Maryland REIT law, only if the trustees pass a resolution approving the transaction's terms and then submit the transaction to a vote of shareholders. Prologis interprets the Proposal as putting the cart before the horse; that is, accomplishing the second part of that process before the first part has occurred.

Prologis overlooks the fact that the Proposal is non-binding and thus could not possibly be attempting to effect the shareholder approval contemplated by section 8-501.1(d). The precatory nature of the Proposal is clear from its wordingthe Proposal states that the Company's shareholders "urge" the board of trustees to take the actions necessary to change the jurisdiction of incorporation. It is also evident from the fact that the Proposal does not propose any particular transaction but rather broadly asks the board to take the necessary steps toward reincorporation. Put another way, a vote on the Proposal would communicate shareholder sentiment to Prologis's board but would not purport to effect the final approval of any transaction or cause the Company's reincorporation.

The Staff has rejected Prologis's argument in a similar context, recognizing that non-binding proposals may ask the board to initiate a process that culminates in shareholder approval. In TRW, Inc. (available Feb. 11, 1999), the proponent submitted a non-binding proposal asking the board to take all necessary steps to amend the company's governing instruments to declassify the board. TRW argued that under Ohio law, only the shareholders could approve such a charter amendment. The proponent countered that the proposal was non-binding and that the board had the power to initiate the amendment and recommend that shareholders vote in favor of it. The Staff denied no-action relief.

Here, as in TRW, the Proposal is non-binding and requests the board to take action to bring about the desired result. Accordingly, the Proposal does not disrupt Maryland's statutory scheme for effecting reincorporations and is not excludable pursuant to Rule 14a-8(i)(1).

False or Misleading Statements

Prologis complains about a range of statements in the Proposal's supporting statement regarding Maryland's corporate laws, urging that these statements require exclusion under Rule 14a-8(i)(3).

First, Prologis objects to the quotation of material critical of the 1999 Unsolicited Takeovers Act (the "Act") from an article in the September 1999 issue of Insights, arguing that the material was taken out of context and is thus misleading. Specifically, Prologis asserts that the article's author, after describing different opinions on the subject, ultimately concludes that the Act was a positive step.

But the Proposal does not quote the material from Insights to support the proposition that the author or Insights is hostile to the Act. Rather, the Proposal uses the quotation to bolster its assertions that (1) Maryland law is different from Delaware law and the difference lies in the greater insulation Maryland law affords to incumbent directors and management, and (2) the Act has been criticized by institutional investors and shareholder activists, who believe it excessively entrenches managements. That the quoted material serves these purposes is clear from the prior paragraph, which states that the Act increased anti-takeover protections for Maryland corporations and "eroded important shareholder rights." Prologis may use its statement in opposition to inform shareholders of what itand perhaps the author of the Insights articlesee as the positive aspects of the Act and Maryland corporate law in general.

On a related note, Prologis urges that the substance of the quoted material is also misleading, focusing on the statement that the Act offers incumbent trustees and management "unqualified protection." Prologis states that Maryland law does not in fact provide "unqualified" protection but rather does not require the heightened scrutiny imposed under Delaware in the takeover context. It is clear from the quoted material, however, which uses the word "seemingly" before the phrase "unqualified protection," that the characterization of directors' and officers' duties is an opinionthe author is commenting on the way some have perceived the effect of the Act's revision of section 2-405.1(f) of the Maryland General Corporation Law, which provides that directors are not subject to higher duties in the takeover context.

Third, Prologis points to a reference in the supporting statement to a uniform resource locator for a web site, at www.reform-reits.org. Because that web site is still under construction, SEIU is willing to remove the reference from the Proposal.

Fourth, Prologis objects to the statement that "Delaware law [,unlike Maryland law,] does not contain a `stakeholder' provision." Prologis argues that Delaware case law, in particular the decision in Unocal Corporation v. Mesa Petroleum Co., permits a board to consider the interests of non-shareholder constituencies. SEIU believes that statutory law stands on a different footing from case law, whose applicability may be confined to a particular set of facts. However, because the Proposal focuses on statutory law, SEIU is willing to clarify the Proposal to make clear that the comparison is between the two states' corporate law statutes.

Fifth, Prologis complains about the language in the supporting statement describing the ability of the board, without shareholder approval, to classify the board of trustees, require a two-thirds vote for the removal of trustees and give the board sole power to fill board vacancies, even if the declaration of trust provides otherwise. Prologis notes that its declaration of trust already contains such provisions, and that the Proposal thus misleadingly suggests that Prologis could contravene its declaration of trust to adopt those kinds of provisions.

However, Prologis's declaration of trust is not set in stone. In the future, it could contain different provisions than it contains today, perhaps as a result of shareholder urging. In that case, Prologis's board could indeed take the actions outlined in the Proposal, contravening the declaration of trust and unilaterally imposing less shareholder-friendly governance provisions. Accordingly, the discussion of these provisions in the Proposal is not irrelevant to Prologis and is not misleading.

Finally, Prologis points out that the provision of the Maryland General Corporation Law permitting the board to amend the charter to increase the number of authorized shares was not added by the Act, as the Proposal states, but rather has been in effect since 1995. SEIU does not object to revising the Proposal to clarify that the provision in question was not added by the Act.

If you have any questions or need anything further, please do not hesitate to call me at (202) 639-7612. We appreciate the opportunity to be of assistance to the Staff in this matter.

Very truly yours,

/s/

Steve Abrecht

Director, SEIU Capital Stewardship Program

cc: Edward S. Nekritz

Senior Vice President and General Counsel

Prologis Trust

Fax # 303-576-2761

[INQUIRY LETTER]
March 4, 2002

By Fax and Overnight Mail

(202) 639-0991

Mr. Steve Abrecht

Director, SEIU Capital Stewardship Program

Service Employees' International Union AFL-CIO, CLC

1313 L Street, N.W.

Washington, D.C. 20005

Re: Shareholder Proposal Submitted by Service Employees' International Union

Dear Mr. Abrecht:

We have been notified that the Service Employees' International Union ("SEIU") has submitted a proposal that it wishes to be considered at the annual meeting of the shareholders of ProLogis Trust ("ProLogis"). You should understand that these proposals cannot be presented at the 2002 annual meeting of ProLogis's shareholders as they have not been presented in accordance with the requirements of ProLogis's Amended and Restated Bylaws (the "Bylaws").

As you were advised in the December 10, 2001 letter from Mr. Edward S. Nekritz of ProLogis to Ms. Anna Burger of SEIU (a copy of which is enclosed), shareholder proposals must be submitted in accordance with ProLogis's Bylaws. The correspondence received from SEIU dated November 28, 2001 and December 20, 2001 and two letters dated February 26, 2002 has not and does not comply with the applicable provisions of the Bylaws. In particular, the Bylaws require the notice of any proposals to be presented at an annual meeting of shareholders to be presented by a shareholder of record at the time of the giving of the notice. ProLogis has reviewed the share ownership rccords with its transfer agent and has determined that SEIU was not a shareholder of record as of the date of its purported notice or at any other time relevant for this purpose. The period in which any proposals by shareholders of record may properly be made for the 2002 annual meeting expired on February 16, 2002. Since SEIU's proposals will not be presented at the 2002 annual meeting, compliance with Rule 14a-8 with respect to any such proposals in inapplicable and SEIU's proposal will not be included in ProLogis's proxy statement for the 2002 annual meeting.

For these reasons, you are not eligible, and ProLogis will not permit you, to present any proposals to be considered at the 2002 annual meeting of ProLogis's shareholders.

Please do not hesitate to contact the undersigned at the above number to discuss the matter further.

Very truly yours,

/s/

Michael T. Blair

cc: Edward S. Nekritz

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Attention: Chief Counsel, Division of Corporate Finance

[INQUIRY LETTER]
March 18, 2002

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549

Attention: Chief Counsel, Division of Corporation Finance

Re: Intended Omission by ProLogis Trust of Proposal Submitted by Service Employees International Union

Dear Sir/Madam,

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the Service Employees International Union ("SEIU") submitted a shareholder proposal (the "Proposal") to ProLogis Trust ("ProLogis" or the "Company"). The Proposal requests that ProLogis's board take the necessary steps to change the Company's jurisdiction of incorporation from Maryland to Delaware.

In a letter to the Commission dated January 18, 2002 (the "No-Action Request"), ProLogis stated that it intends to omit the Proposal from its proxy materials to be distributed to shareholders in connection with the Company's 2002 annual meeting of shareholders in reliance on Rule 14a-8(i)(1), because it usurps the power of the Company's trustees to initiate such a reincorporation, and Rule 14a-8(i)(3), because it contains false or misleading statements. SEIU responded to the No-Action Request by letter dated February 26, 2002 (the "No-Action Response"), and has not received notification of a decision by the Staff.

By letter dated March 4, 2002, ProLogis asserted for the first time that it is entitled to omit the Proposal from its proxy materials as a result of SEIU's failure to comply with provisions of ProLogis's bylaws. We write to seek clarification from the Staff and, if the Staff deems appropriate, enforcement action, in order to prevent ProLogis from excluding the Proposal from its proxy materials.

Background

Article I, Section L.1 of ProLogis's bylaws (the "Bylaws") provides, "(a) Nominations of persons for election to the Board and the proposal of business to be conducted by the Shareholders may be made at an annual meeting of Shareholders (i) pursuant to the Trust's notice of a meeting, (ii) by or at the direction of the Board or (iii) by any Shareholder of the Trust who was a Shareholder of record at the time of the giving of notice provided for in this Section 12(a)1 and at the time of the annual meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 12(a)."

Article I, Section L.1(b) provides that the required notice must be provided no more than 120 days and no fewer than 90 days prior to the first anniversary of the prior year's annual meeting of shareholders, subject to exception if the 2002 meeting is moved significantly from the anniversary date. Because ProLogis's 2001 annual meeting was held on May 17, the notice period for the 2002 annual meeting would run from January 17 to February 16. Article I, Sections L.1(a) and (b) are hereinafter referred to as the "Notice Bylaw." (A copy of ProLogis's Bylaws is attached hereto as Exhibit A.)

By letter dated February 26, 2002, SEIU sent a notice of intention (the "SEIU Notice") to present a shareholder resolution, referencing Article I, section L of the Bylaws. (The SEIU Notice is attached hereto as Exhibit B.) SEIU furnished the SEIU Notice because a non-lawyer staff member had reviewed the Bylaws, seen the Notice Bylaw, and, incorrectly calculating the period as ending on February 26, sent the SEIU Notice. SEIU does not dispute that the SEIU Notice was (1) untimely and (2) defective because it was not furnished by the record owner of the ProLogis shares of which SEIU is the beneficial owner. However, by sending the SEIU Notice, SEIU did not intend to concede the applicability of the Notice Bylaw to the Proposal.

By letter dated March 4, 2002 (the "March 4 Letter"), ProLogis notified SEIU for the first time that the Proposal would be excluded from ProLogis's 2002 proxy materials because SEIU had failed to comply with ProLogis's Bylaws. (The March 4 Letter is attached hereto as Exhibit C.) The March 4 Letter is difficult to understand. It states:

The correspondence received from SEIU dated November 28, 2001 and December 20, 2001 and two letters dated February 26, 2002 has [sic] not and does [sic] not comply with the applicable provisions of the Bylaws. In particular, the Bylaws require the notice of any proposals to be presented at an annual meeting of shareholders to be presented by a shareholder of record at the time of the giving of the notice. ProLogis has reviewed the share ownership records with its transfer agent and has determined that SEIU was not a shareholder of record as of the date of its purported notice or at any other time relevant for this period.

The correspondence referenced in the March 4 Letter breaks down as follows:

November 28, 2001 letter: from Anna Burger, Secretary-Treasurer of SEIU, to Edward S. Nekritz, Senior Vice President and General Counsel of ProLogis, submitting the Proposal to ProLogis (the "Submission Letter"; the Submission Letter is attached hereto as Exhibit D)

December 20, 2001 letter: from Steve Abrecht, Director, Capital Stewardship Program, SEIU, to Edward Nekritz (the "Proof of Ownership Letter"); this was the cover letter for a letter dated December 19, 2001 from Fatima Brooks-McCall, Vice President of SunTrust Securities, Inc., stating that it had held on SEIU's behalf the requisite amount of securities for the time period necessary to establish eligibility under Rule 14a-8 (the "SunTrust Letter"; the SunTrust Letter is attached hereto as Exhibit E)

February 26, 2002: the SEIU Notice

February 26, 2002: The only other correspondence dated February 26, 2002 is the No-Action Response (the No-Action Response is attached hereto as Exhibit F)

Thus, the March 4 Letter appears to assert several bases for exclusion, none of which was raised in the No-Action Request:

1. The Submission Letter was required to be sent by the record owner of the shares of ProLogis stock beneficially owned by SEIU. This argument is frivolous. Rule 14a-8 clearly contemplates submission of proposals by beneficial owners. See Exchange Act Release No. 12,598 (July 7, 1976) ("A proposal may be submitted not only by a record owner of a security of the issuer but also by a beneficial owner as well.").

2. The Proof of Ownership Letter was required to be sent by the record owner of the shares of ProLogis stock beneficially owned by SEIU. This argument simply makes no sense. The Proof of Ownership Letter accompanied the SunTrust Letter, which was itself sent by the record owner and confirmed SEIU's beneficial ownership of ProLogis shares.

3. The No-Action Response was required to be sent by the record owner of the shares of ProLogis stock beneficially owned by SEIU. This argument is also frivolous. If Rule 14a-8 permits a beneficial owner to submit and present a shareholder proposal, it follows that the beneficial owner may defend that proposal against a no-action challenge.2

4. The Notice Bylaw applies to proposals submitted under Rule 14a-8 and, because the SEIU Notice was defective, the Proposal may be excluded.

When contacted by telephone on March 8, 2002, Michael Blair, ProLogis's outside counsel and the author of the March 4 Letter, explained that he believed ProLogis was permitted to impose procedural requirements on proposals submitted under Rule 14a-8. When asked why ProLogis had not sought no-action relief from the Staff on this basis, Mr. Blair replied that the Commission lacked jurisdiction over the question of the application of the Notice Bylaw to proposals submitted under Rule 14a-8. He also noted that at the time the No-Action Request was submitted, the notice period under the Notice Bylaw had not yet expired, so compliance was still possible. SEIU notes, however, that the No-Action Request has been pending for a month since the expiration of the notice period, giving ProLogis ample opportunity to supplement the No-Action Request.

Analysis

ProLogis should not be permitted to impose additional procedural requirements, including the Notice Bylaw, on proposals submitted pursuant to Rule 14a-8. First, ProLogis's own proxy statement disclosure states clearly that the notice requirements of ProLogis's Bylaws do not apply to proposals timely submitted pursuant to Rule 14a-8:

Any proposal by a shareholder of ProLogis intended to be presented at the 2002 annual meeting of shareholders must be received by ProLogis at its principal executive offices not later than December 11, 2001, for inclusion in ProLogis' proxy statement and form of proxy relating to that meeting.

In addition, shareholders may present proposals which are proper subjects for consideration at an annual meeting, even if the proposal is not submitted by the deadline for inclusion in the proxy statement. To do so, the shareholder must comply with the procedures specified by Bylaws. The Bylaws require that all shareholders who intend to make proposals at an annual shareholders' meeting submit their proposals, including any required supporting information, to ProLogis during the period 90 to 120 days before the anniversary date of the previous year's annual meeting. To be eligible for consideration at the 2002 annual meeting, proposals which have not been submitted by the deadline for inclusion in the proxy statement must be received by ProLogis between January 17, and February 16, 2002.

(Definite Proxy Statement of ProLogis Trust filed on April 5, 2001) (emphasis added)

If ProLogis intended to apply the Notice Bylaw to all shareholder proposalsnot just those that were not received in time to be included in ProLogis's own proxy statementit needed to say so in its 2001 proxy statement. The application of the Notice Bylaw to the Proposal under these circumstances renders ProLogis's 2001 proxy statement disclosure misleading to shareholders.

More broadly, companies should not be allowed to erect additional procedural hurdles for shareholders seeking to exercise their rights under Rule 14a-8. SEIU does not object to the imposition of additional requirements like the Notice Bylaw, which have been upheld under state law in most circumstances, on the submission of proposals outside the Rule 14a-8 context.

However, allowing companies to impose such requirements on proposals submitted under Rule 14a-8 would thwart the purpose of the rule, add substantially to the complexity of the submission process and create traps for unwary shareholders, especially those who are less sophisticated. In the past, perhaps recognizing these considerations, the Staff has denied a request by a company for no-action relief based on non-compliance with an advance notice bylaw, and has rejected the attempt of another company to engraft onto Rule 14a-8 the more onerous eligibility requirements of the jurisdiction of the company's incorporation.

The shareholder proposal rule was originally conceived as a mechanism for ensuring that shareholders had a voice in the governance of public companies and were able to bring to other shareholders' attention matters of common interest. As Baldwin Bane, Director of the Corporation Finance Division, stated in 1945, "Speaking generally, it is the purpose of [the predecessor to Rule 14-8] to place stockholders in a position to bring before their fellow stockholders matters of concern to them as stockholders in such corporation; that is, such matters relating to the affairs of the company concerned as are proper subjects for stockholders' action under the laws of the state under which it is organized." (Opinion of Baldwin B. Bane, contained in Exchange Act Release No. 3638 (Jan. 3, 1945))

Many commentators have stated that the Commission intended the shareholder proposal rule to foster "corporate democracy." (See, e.g., Alan R. Palmiter, "The Shareholder Proposal Rule: a Failed Experiment in Merit Regulation," 45 Ala. L. Rev. 879, 880 (1994); Eric A. Welter, "The Shareholder Proposal Rule: A Change to Certainty," 60 Geo. Wash. L. Rev. 1980, 1992 (1980)) The U.S. Court of Appeals for the D.C. Circuit stated:

The clear import of the language, legislative history, and record of administration of section 14(a) is that its overriding purpose is to assure corporate shareholders the ability to exercise their rightsome would say their dutyto control the important decisions which affect them in their capacity as stockholders and owners of the corporation.... It could scarcely be argued that management is more qualified or more entitled to make these kinds of decisions than the shareholders who are the true beneficial owners of the corporation, and it seems equally plausible that an application of the proxy rules which permitted such a result could be harmonized with the philosophy of corporate democracy which Congress embodied in section 14(a) of the Securities Exchange Act of 1934. (Medical Committee for Human Rights v. SEC, 432 F.2d 659 (D.C. Cir. 1970), vacated as moot, 404 U.S. 403 (1972))

The Commission, in numerous revisions to Rule 14a-8, has been careful to balance the interests of shareholders and companies. The procedural requirements, in particular, have been crafted to avoid overly burdening companies while still affording shareholders the opportunity to put their proposals before their fellow shareholders. For example, when the Commission proposed in 1976 to limit each shareholder to two proposals per issuer and to limit proposal length to 300 words, it contended that such changes were necessary to prevent abuse of the process and ensure that shareholder proposals do not obscure other important matters in issuers' proxy materials. However, the Commission weighed those objectives against the harm to shareholders, going so far as to compile data on the average number and length of shareholder proposals. (See Exchange Act Release No. 12,598 (July 7, 1976)) Allowing companies to add their own, more stringent procedural requirements would disrupt this balance.

Importantly, the addition of notice requirements in the Rule 14a-8 context would not serve the purpose usually offered in support of such requirements. Companies generally defend advance notice bylaw provisions as necessary to ensure that companies are informed about all matters to be presented at shareholders' meetings, and to facilitate the orderly conduct of such meetings. When a shareholder has submitted a proposal 180 days prior to an annual meeting, as required under Rule 14a-8, the company already has notice of the shareholder's intent to raise the matter at the meeting. Requiring a second notice serves no legitimate purpose.

What it does do, though, is increase the possibility that a proposal will be omitted from the proxy statement, and that the shareholder will be prevented from presenting the matter at the meeting. Such a result is not consistent with the shareholder proposal rule's purpose.

In formulating Rule 14a-8's procedural requirements, the Commission has been sensitive to the possibility that shareholders, especially less sophisticated ones, will inadvertently fail to comply with a requirement. For instance, the requirement that issuers notify shareholders of certain deficiencies and afford an opportunity to cure recognizes the complex and technical nature of the rule while still expecting compliance by shareholders. (See, e.g., Exchange Act Release No. 12,598 (July 7, 1976) ("Subparagraph (a)(4) also would provide that in those instances in which a proponent fails to comply with either of the above requirements [proposal length and number] or with the 200-word limit on statements in support of a proposal, the management shall notify the proponent and provide him with a reasonable time to reduce the items submitted by him to the limits set forth in the rule. The provision is being proposed in the interest of fairness because the Commission recognizes that many proponents, due to a lack of awareness of the proposal limitations, may inadvertently exceed them at the time they submit their proposals."))

Shareholder confusion and non-compliance is especially likely where, as here, a procedural hurdle requires a shareholder to produce a notice from the record owner, which is almost always Cede & Co., the nominee of the Depository Trust Corporation. Obtaining such a notice from Cede & Co. requires a shareholder to determine the department or person at the shareholder's "street name" holdergenerally a bank or brokeragein charge of submitting instruction letters to Cede & Co. (Cede & Co. will not send a notice or other communication unless "instructed" to do so by the street name holder with which Cede & Co. has a business relationship.) Some street name holders may never have sent an instruction letter to Cede & Co., and thus there may be no employee familiar with the process. The instruction letter must be sent to and approved by Cede & Co. before that company will produce the requested notice. The shareholder must draft a notice for Cede & Co. that complies with the company's bylaws. Finally, Cede & Co. requires notices to be picked up at its lower Manhattan office; it will not take responsibility for mailing a notice, even to the beneficial owner on whose behalf the notice is being sent. These are onerous tasks for shareholders who may have no familiarity with corporate bylaws or the complex system of street name shareholding.

The Staff has addressed this issue once before, when presented by an issuer with a request for no-action relief. In Tyson Foods, Inc. (available Dec. 9, 1999), Tyson argued that a proposal was excludable pursuant to Rule 14a-8(i)(1) because the proponent had failed to comply with an advance notice bylaw requirement. The proponent responded that Tyson could not override the deadline requirement imposed in Rule 14a-8, characterizing the company's strategy as "at best legally creative and at worst a disingenuous effort to deny shareowners the access to the Company's proxy statement that Congress clearly intended." Tyson disagreed that Rule 14a-8 created a federal procedure for placing matters on an agenda for a corporation's shareholder meeting. The Staff sided with the proponent and denied Tyson's request for no-action relief.

Similarly, in Tyco International Ltd. (available Aug. 6, 1999), the company, which was incorporated in Bermuda, sought to exclude three proposals under Rule 14a-8(i)(1), claiming that Bermuda's eligibility requirements for shareholder proposals superseded the much less stringent eligibility requirements contained in Rule 14a-8. Bermuda law provided that shareholders may not place a matter on the agenda for a shareholders' meeting unless they hold 5% or more of the company's shares or the proposal is sponsored by at least 100 shareholders. The proponents contended that more stringent requirements imposed by the jurisdiction of a company's incorporation cannot override procedural requirements established by Rule 14a-8. Again, the Staff sided with the proponents.

It is appropriate for the Staff to decide in the first instance whether ProLogis may apply the Notice Bylaw to exclude the Proposal, despite the absence of a no-action request by ProLogis. The Commission is charged with carrying out Congress' purpose in enacting section 14(a) of the Securities Exchange Act, and the application of the Notice Bylaw to the Proposal would frustrate that purpose. Moreover, ProLogis's argument, although limited to advance notice bylaws, implicates a vast range of potential company-enacted procedural impedimentsshorter proposal length limits, more stringent eligibility requirements, and higher resubmission thresholds, to name a fewwhich could swallow up Rule 14a-8 entirely. Assuming the Staff decides that the Notice Bylaw may not be applied to the Proposal, we ask that the Staff notify ProLogis of this view and advise ProLogis that it is not permitted to exclude the Proposal on this basis. We also ask the Staff to notify us regarding the action it has taken in this regard.

I would be pleased to be of further assistance to the Staff in this matter. If you have any questions or need anything further, please do not hesitate to call me on (202) 639-7612.

Very truly yours,

/s/

Steve Abrecht

Director, Capital Stewardship Program

-----FOOTNOTES-----

1 The meaning of the Notice Bylaw's reference to "this Section 12(a)" is unclear. SEIU notes that, at least in the copy of the Bylaws it obtained from LEXIS-NEXIS, a "Section 13" and "Section 14" immediately follow Section L.3; however, there are no sections 1-12 in Article I or Section L.

2 We believe it would be appropriate for the Staff to ascertain the extent to which ProLogis's exclusion of the Proposal rests on any of the bases contained in numbers 1 through 3 of this list. If ProLogis is indeed relying on any of these arguments, we ask that the Staff inform ProLogis that such arguments are frivolous and may not serve as the basis for excluding the Proposal. We also ask that appropriate enforcement action be taken in the event that ProLogis nevertheless excludes the Proposal in reliance on one of these bases.

[STAFF REPLY LETTER]
March 28, 2002

Response of the Office of Chief Counsel Division of Corporation Finance

Re: ProLogis Trust

Incoming letter dated January 18, 2002

The proposal urges the board to take the measures necessary to change ProLogis' jurisdiction of incorporation from Maryland to Delaware.

We are unable to concur in your view that ProLogis may exclude the proposal under rule 14a-8(i)(1). Accordingly, we do not believe that ProLogis may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(1).

We are unable to concur in your view that ProLogis may exclude the entire proposal under rule 14a-8(i)(3). However, there appears to be some basis for your view that portions of the proposal and supporting statement may be materially false or misleading under rule 14a-9. In our view, the proponent must:

delete the phrase "(a more detailed analysis is available at www.reform-reits.org)";

delete the sentence "Delaware law does not contain a `stakeholder' provision"; and

delete the phrase "With the passage of the Act in 1999."

Accordingly, unless the proponent provides ProLogis with a proposal and supporting statement revised in this manner, within seven calendar days after receiving this letter, we will not recommend enforcement action to the Commission if ProLogis omits only these portions of the supporting statement from its proxy materials in reliance on rule 14a-8(i)(3).

Sincerely,

/s/

Jennifer Gurzenski

Attorney-Advisor