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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
 
Filed by the Registrant þ
 Filed by a Party other than the Registrant  o
Check the appropriate box:
o  Preliminary Proxy Statement
o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ  Definitive Proxy Statement
o  Definitive Additional Materials
o  Soliciting Material Pursuant to §240.14a-12
 
ProLogis
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
þ   No fee required.
 
o   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
  (1)   Title of each class of securities to which transaction applies:
 
 
  (2)   Aggregate number of securities to which transaction applies:
 
 
  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
  (4)   Proposed maximum aggregate value of transaction:
 
 
  (5)   Total fee paid:
 
 
  o   Fee paid previously with preliminary materials.
 
o   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
  (1)   Amount Previously Paid:
 
 
  (2)   Form, Schedule or Registration Statement No.:
 
 
  (3)   Filing Party:
 
 
  (4)   Date Filed:
 


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(ABM LOGO)   (PROLOGIS LOGO)
 
MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT
 
The board of directors of AMB Property Corporation and the board of trustees of ProLogis have each approved an agreement to combine the two companies through a merger of equals. The proposed transaction will create a truly global owner, operator and developer of industrial real estate. The combined company, which will be named “ProLogis, Inc.” and will be organized as an umbrella partnership real estate investment trust, or “UPREIT,” is expected to have a pro forma equity market capitalization of approximately $14 billion, a total market capitalization in excess of $24 billion, and gross assets owned and managed of approximately $46 billion. We believe that the combined company will create a stronger, more liquid enterprise poised to take advantage of changing market conditions to become the leading global provider of industrial real estate.
 
In the proposed transactions, ProLogis shareholders will receive 0.4464 of a newly issued share of AMB common stock for each ProLogis common share that they own. This exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to the closing. AMB common stock and ProLogis common shares are each traded on the New York Stock Exchange, under the ticker symbols “AMB” and “PLD,” respectively. Based on the closing price of AMB common stock on the New York Stock Exchange (which we refer to as the “NYSE”) of $32.86 on January 26, 2011, the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies, the exchange ratio represented approximately $14.67 in AMB common stock for each ProLogis common share. Based on the closing price of AMB common stock on the NYSE of $32.93 on January 28, 2011, the last trading day before public announcement of the proposed transactions, the exchange ratio represented approximately $14.70 in AMB common stock for each ProLogis common share. Based on the closing price of AMB common stock on the NYSE of $36.52 on April 26, 2011, the latest practicable date before the date of this joint proxy statement/prospectus, the exchange ratio represented approximately $16.30 in AMB common stock for each ProLogis common share. The value of the merger consideration will fluctuate with changes in the market price of AMB common stock. We urge you to obtain current market quotations of AMB common stock and ProLogis common shares.
 
The merger of AMB and ProLogis will be accomplished through a first-step merger of ProLogis and an indirect wholly owned subsidiary of ProLogis and a second-step merger of a parent entity of that subsidiary with AMB. ProLogis will continue its existence as a subsidiary of the combined company. If the merger of AMB and ProLogis is completed, each share of each series of ProLogis preferred shares will be converted into a share of AMB preferred stock of corresponding series having rights, privileges, powers and preferences substantially identical to those of the relevant series of ProLogis preferred shares. Holders of ProLogis preferred shares and AMB preferred stock are not entitled to, and are not being requested to, vote at the special meetings.
 
Based upon the number of outstanding shares on the record date for each special meeting, we anticipate that AMB will issue 254,693,674 shares of common stock and 12,000,000 shares of preferred stock in connection with the mergers described herein, and will reserve approximately 22,227,386 shares of common stock for issuance in respect of ProLogis equity awards, convertible notes and other arrangements that AMB will assume in connection with the merger. Upon completion of the transactions, we estimate that former AMB stockholders will own approximately 40% of the common stock of the combined company and former ProLogis shareholders will own approximately 60% of the common stock of the combined company.
 
Each of the mergers is intended to qualify as a reorganization for U.S. federal income tax purposes, and, accordingly, assuming the transaction so qualifies, ProLogis shareholders generally will not recognize any gain or loss for U.S. federal income tax purposes on the surrender of their ProLogis common shares and receipt of AMB common stock, except with respect to cash received in lieu of any fractional shares of AMB common stock.
 
Your vote is very important, regardless of the number of shares you own.  The combination of AMB and ProLogis cannot be completed without the approval of both the AMB stockholders and the ProLogis shareholders, including the approval by AMB stockholders of certain amendments to the AMB bylaws. Each of AMB and ProLogis is holding a special meeting to vote on the proposals necessary to complete the merger transactions. We urge you to read this joint proxy statement/prospectus carefully. The obligations of AMB and ProLogis to complete the merger are subject to the satisfaction or waiver of several conditions set forth in the merger agreement. More information about AMB, ProLogis, the special meetings and the merger is included in this joint proxy statement/prospectus. You should also consider carefully the risks that are described in the “Risk Factors” section beginning on page 23.
 
Whether or not you plan to attend your company’s special meeting, please submit your proxy as soon as possible to make sure that your shares of AMB common stock or ProLogis common shares are represented at that meeting.
 
The AMB board of directors recommends that AMB stockholders vote “FOR” the proposal to approve the merger with ProLogis, including the issuance of AMB common stock and preferred stock to ProLogis shareholders, the proposed amendments to the AMB bylaws, which approvals are necessary to complete the merger, and the proposed amendments to the AMB charter.
 
The ProLogis board of trustees recommends that ProLogis shareholders vote “FOR” the proposal to approve the merger agreement and the transactions contemplated thereby, which approval is necessary to complete the merger.
 
We join our respective boards in their recommendation, and look forward to the successful combination of AMB and ProLogis.
 
     
Sincerely,
  Sincerely,
     
(-s- Hamid R. Moghadam)   (-s- Walter C. Rakowich)
Hamid R. Moghadam
Chief Executive Officer and Chairman
AMB Property Corporation
  Walter C. Rakowich
Chief Executive Officer
ProLogis
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this joint proxy statement/prospectus or determined that this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
 
This joint proxy statement/prospectus is dated April 28, 2011 and is first being mailed to the stockholders of AMB and shareholders of ProLogis on or about May 2, 2011.


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(AMB LOGO)
AMB Property Corporation
Pier 1, Bay 1
San Francisco, CA 94111
(415) 394-9000

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 1, 2011
 
Dear Stockholders of AMB Property Corporation:
We are pleased to invite you to attend a special meeting of stockholders of AMB Property Corporation, a Maryland corporation. The meeting will be held at AMB Property Corporation’s global headquarters, which are located at Pier 1, Bay 1, San Francisco, California 94111, on June 1, 2011, at 9:00 a.m., local time, to consider and vote upon the following matters:
  •  a proposal to approve the merger of New Pumpkin Inc., a Maryland corporation and currently a wholly owned subsidiary of ProLogis, with and into AMB, with AMB continuing as the surviving corporation (which will occur following the merger of an indirect wholly owned subsidiary of New Pumpkin with and into ProLogis), including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection therewith;
  •  a proposal to amend certain provisions of the amended and restated bylaws of AMB, which will be the bylaws of the combined company, effective upon the consummation of the merger described above, to provide for certain features of the leadership structure of the combined company;
  •  a proposal to amend the AMB charter (which, including the AMB articles of incorporation, we refer to as the “AMB charter”), which will be the charter of the combined company, effective upon the consummation of the merger, to provide that (1) the board of directors of the combined company, with the approval of a majority of the entire board, and without action by the stockholders of the combined company, may amend the charter of the combined company to increase or decrease the aggregate number of shares of stock of the combined company or the number of shares of stock of any class or series that the combined company has authority to issue and (2) notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the board of directors and taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter, provided that (i) any amendment to any provision of the charter which expressly requires for any purpose a greater proportion of the votes entitled to be cast shall require the proportion of votes specified in that provision, (ii) any amendment to this provision shall require the affirmative vote of the holders of shares entitled to cast two-thirds of all of the votes entitled to be cast on the matter and (iii) any action requiring a different vote as expressly provided in the charter shall require such different vote; and
  •  a proposal to approve the adjournment of the AMB special meeting, if necessary or appropriate, to solicit additional proxies in favor of the above proposals if there are insufficient votes at the time of such adjournment to approve such proposals.
The approval by AMB stockholders of both the proposal to approve the merger and the proposal to amend certain provisions of the bylaws is required for the completion of the merger. However, approval of the proposal to amend the AMB charter is not a condition to completion of the merger.
Please refer to the attached joint proxy statement/prospectus for further information with respect to the business to be transacted at the AMB special meeting.
Holders of record of shares of AMB common stock at the close of business on April 21, 2011 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.
The proposal to approve the merger, including the issuance of AMB common and preferred stock to ProLogis shareholders in connection therewith, requires the affirmative vote of holders of two-thirds of the outstanding AMB common stock. The proposal to approve the bylaw amendment requires the affirmative vote of the holders of a majority of the outstanding AMB common stock. The proposal to approve the amendment to the AMB charter requires the affirmative vote of holders of two-thirds of the outstanding AMB common stock. A proposal to adjourn the AMB special meeting would require the affirmative vote of holders of a majority of the AMB common stock, represented in person or by proxy, at the AMB special meeting and entitled to vote on the proposal.
Your vote is important. Whether or not you expect to attend the AMB special meeting in person, we urge you to vote your shares as promptly as possible by (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the AMB special meeting. If your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.
 
By Order of the Board of Directors,
 
-s- HAMID R. MOGHADAM
TAMRA D. BROWNE, ESQ.
Senior Vice President, General Counsel and Secretary
 
April 28, 2011
San Francisco, California


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(PROLOGIS LOGO)
 
ProLogis
4545 Airport Way
Denver, CO 80239
(303) 567-5761
 
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On June 1, 2011
 
Dear Shareholders of ProLogis:
 
We are pleased to invite you to attend a special meeting of shareholders of ProLogis, a Maryland real estate investment trust. The meeting will be held at ProLogis’ world headquarters, 4545 Airport Way, Denver, Colorado 80239, on June 1, 2011, at 9:00 a.m., local time, to consider and vote upon the following matters:
 
  •  a proposal to approve the merger of Pumpkin LLC, a Delaware limited liability company and indirect wholly owned subsidiary of ProLogis, with and into ProLogis, with ProLogis continuing as the surviving entity and an indirect wholly owned subsidiary of New Pumpkin Inc., a Maryland corporation and current wholly owned subsidiary of ProLogis, followed by the merger of New Pumpkin with and into AMB Property Corporation, with AMB continuing as the surviving corporation under the name “ProLogis, Inc.”, pursuant to which each outstanding ProLogis common share of beneficial interest will be converted into the right to receive 0.4464 of a newly issued share of AMB common stock (we refer to the foregoing mergers together as the “Merger”); and
 
  •  a proposal to approve the adjournment of the ProLogis special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the Merger if there are insufficient votes at the time of such adjournment to approve such proposal.
 
Please refer to the attached joint proxy statement/prospectus for further information with respect to the business to be transacted at the ProLogis special meeting.
 
Holders of record of ProLogis common shares at the close of business on April 21, 2011 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.
 
The proposal to approve the Merger requires the affirmative vote of holders of a majority of the outstanding ProLogis common shares. A proposal to adjourn the ProLogis special meeting would require the affirmative vote of a majority of the votes cast on the matter by the holders of the ProLogis common shares represented, in person or by proxy, at the ProLogis special meeting.
 
Your vote is important. Whether or not you expect to attend the ProLogis special meeting in person, we urge you to vote your shares as promptly as possible by (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the ProLogis special meeting. If your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.
 
For the Board of Trustees,
 
-s- Edward S. Nekritz
Edward S. Nekritz
Secretary
 
April 28, 2011
Denver, Colorado


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ADDITIONAL INFORMATION
 
This joint proxy statement/prospectus incorporates by reference important business and financial information about AMB and ProLogis from other documents that are not included in or delivered with this joint proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain the documents incorporated by reference into this joint proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:
 
     
AMB Property Corporation   ProLogis
Pier 1, Bay 1
San Francisco, California 94111
(415) 394-9000
Attn: Investor Relations
  4545 Airport Way
Denver, Colorado 80239
(800) 820-0181
Attn: Investor Relations
or   or
MacKenzie Partners, Inc.    Georgeson Inc.
105 Madison Avenue
New York, New York 10016
Call Collect: (212) 929-5500
Call Toll Free (800) 322-2885
Email: proxy@mackenziepartners.com
  199 Water Street — 26th Floor
New York, New York 10038
Banks and Brokers Call: (212) 440-9800
Call Toll Free: (888) 867-6963
 
Investors may also consult the websites of AMB or ProLogis for more information concerning the Merger described in this joint proxy statement/prospectus. The website of AMB is www.AMB.com and the website of ProLogis is www.ProLogis.com. Information included on these websites is not incorporated by reference into this joint proxy statement/prospectus.
 
If you would like to request any documents, please do so by May 25, 2011 in order to receive them before the meetings.
 
For more information, see “Where You Can Find More Information.”
 
ABOUT THIS DOCUMENT
 
This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission by AMB Property Corporation (File No. 333-172741), constitutes a prospectus of AMB under Section 5 of the U.S. Securities Act of 1933, as amended (which we refer to as the “Securities Act”), with respect to the AMB common stock and AMB preferred stock to be issued to ProLogis shareholders in connection with the Merger. This document also constitutes a joint proxy statement of AMB and ProLogis under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”). It also constitutes a notice of meeting with respect to the special meeting of AMB stockholders and a notice of meeting with respect to the special meeting of ProLogis shareholders, at which AMB stockholders and ProLogis shareholders, respectively, will be asked to vote upon certain proposals to approve the Merger and certain related matters.
 
You should rely only on the information contained or incorporated by reference into this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated April 27, 2011. You should not assume that the information contained in, or incorporated by reference into, this joint proxy statement/prospectus is accurate as of any date other than the date on the front cover of those documents. Neither our mailing of this joint proxy statement/prospectus to AMB stockholders or ProLogis shareholders nor the issuance of AMB common stock or preferred stock in connection with the Merger will create any implication to the contrary.
 
 
 
 
This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this joint proxy statement/prospectus regarding AMB has been provided by AMB and information contained in this joint proxy statement/prospectus regarding ProLogis has been provided by ProLogis.


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QUESTIONS AND ANSWERS
 
The following are answers to some questions that you, as a stockholder of AMB Property Corporation (which we refer to as “AMB”) or a shareholder of ProLogis, may have regarding the proposed transactions between AMB and ProLogis and the other matters being considered at the stockholder meeting of AMB and at the shareholder meeting of ProLogis. AMB and ProLogis urge you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Merger and the other matters being considered at the special meetings. Additional important information is also contained in the annexes to and the documents incorporated by reference into this joint proxy statement/prospectus.
 
Q: What is the Merger?
 
A: AMB and ProLogis have agreed to a merger of equals between AMB and ProLogis under the terms of an Agreement and Plan of Merger, dated as of January 30, 2011 and amended as of March 9, 2011 (which we refer to as the “merger agreement”), by and among AMB, AMB Property, L.P. (which we refer to as “AMB LP”), ProLogis, Upper Pumpkin LLC (which we refer to as “Upper Pumpkin”), New Pumpkin Inc. (which we refer to as “New Pumpkin”) and Pumpkin LLC. Each of Pumpkin LLC, Upper Pumpkin, and New Pumpkin is a direct or indirect wholly owned subsidiary of ProLogis. A copy of the merger agreement is attached as Annex A to this joint proxy statement/prospectus.
 
Pursuant to the merger agreement, AMB and ProLogis will combine through a multi-step process:
 
• first, ProLogis will be reorganized into an umbrella partnership real estate investment trust (which we refer to as an “UPREIT”) by merging Pumpkin LLC with and into ProLogis, with ProLogis continuing as the surviving entity and as a wholly owned subsidiary of Upper Pumpkin and an indirect wholly owned subsidiary of New Pumpkin (we refer to this as the “ProLogis merger”);
 
• following the ProLogis merger, New Pumpkin will be merged with and into AMB, with AMB continuing as the surviving corporation under the name of “ProLogis, Inc.” (we refer to this as the “Topco merger,” and we refer to the ProLogis merger and the Topco merger together as the “Merger”); and
 
• following the Topco merger, the combined company will contribute all of the outstanding equity interests of Upper Pumpkin to AMB LP (which we refer to as the “contribution”), in exchange for the issuance of equity interests in AMB LP (which we refer to as the “issuance”), and AMB LP will be renamed “ProLogis, L.P.”.
 
ProLogis will continue its existence as a subsidiary of the combined company. The shares of common stock of the combined company will be listed and traded on the NYSE under the symbol “PLD.”
 
Q: Why is the combined company being structured as an UPREIT?
 
A: The parties believe that the UPREIT structure, by which the combined company will own substantially all of its assets and conduct substantially all of its operations through an operating partnership, will give the combined company greater flexibility to acquire assets using a tax-deferred acquisition currency.
 
Q: Why am I receiving this joint proxy statement/prospectus?
 
A: The Merger cannot be completed unless:
 
• the holders of AMB common stock vote to approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger);
 
• the holders of AMB common stock vote to approve a proposal to amend certain provisions of the amended and restated bylaws of AMB (we refer to the amended and restated bylaws of AMB as the “AMB bylaws” and to the amendment as the “bylaw amendment”), which will be the bylaws of the combined company effective upon the consummation of the Topco merger, to provide for certain features of the leadership structure of the combined company; and
 
• the holders of ProLogis common shares of beneficial interest (which we refer to as “ProLogis common shares”) vote to approve the Merger.


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Each of AMB and ProLogis will hold separate special meetings to obtain these approvals. At the AMB special meeting, AMB stockholders also will be asked to vote to approve certain amendments to the AMB charter (we refer to the AMB charter, including the AMB articles of incorporation, as the “AMB charter” and to the amendments as the “charter amendment”). However, approval of the proposal to amend the AMB charter is not a condition to completion of the Topco merger.
 
This joint proxy statement/prospectus contains important information about the Merger and the other proposals being voted on at the special meetings, and you should read it carefully. It is a joint proxy statement because the AMB board of directors is soliciting proxies from its stockholders and the ProLogis board of trustees is soliciting proxies from its shareholders. It is a prospectus because AMB will issue shares of its common stock and preferred stock in the Topco merger. The enclosed voting materials allow you to vote your shares without attending your respective meeting.
 
Your vote is important. We encourage you to vote as soon as possible.
 
Q: When and where will the special meetings be held?
 
A: The AMB special meeting will be held at AMB Property Corporation’s global headquarters, which are located at Pier 1, Bay 1, San Francisco, California 94111, on June 1, 2011, at 9:00 a.m., local time. The ProLogis special meeting will be held at ProLogis’ world headquarters, 4545 Airport Way, Denver, Colorado 80239, on June 1, 2011, at 9:00 a.m., local time.
 
Q: How do I vote?
 
A: If you are a holder of record of AMB common stock as of the record date for the AMB special meeting or a holder of record of ProLogis common shares as of the record date for the ProLogis special meeting, you may vote in person by attending your special meeting or, to ensure your shares are represented at the meeting, you may vote by:
 
• accessing the Internet website specified on your proxy card;
 
• calling the toll-free number specified on your proxy card; or
 
• signing and returning the enclosed proxy card in the postage-paid envelope provided.
 
If you hold AMB common stock or ProLogis common shares in the name of a broker, bank or nominee, please follow the voting instructions provided by your broker, bank or nominee to ensure that your stock or shares are represented at your special meeting.
 
Q: What am I being asked to vote upon?
 
A: AMB.  AMB stockholders are being asked to vote to approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), to approve the bylaw amendment and to approve the charter amendment.
 
ProLogis.  ProLogis shareholders are being asked to vote to approve the Merger.
 
The Merger cannot be completed without the approval by AMB stockholders of the proposals relating to the Topco merger and the bylaw amendment and cannot be completed without the approval by ProLogis shareholders of the proposal relating to the Merger. However, approval of the proposal to amend the AMB charter is not a condition to completion of the Merger.
 
Q: How do the AMB board of directors and the ProLogis board of trustees recommend that I vote?
 
A: AMB.  The AMB board of directors unanimously recommends that holders of AMB common stock vote “FOR” the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), “FOR” the bylaw amendment, “FOR” the charter amendment and “FOR” the AMB adjournment proposal.
 
ProLogis.  The ProLogis board of trustees unanimously recommends that holders of ProLogis common shares vote “FOR” the Merger and “FOR” the ProLogis adjournment proposal.


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Q: What vote is required to approve each proposal?
 
A: AMB.  The proposals at the AMB special meeting to approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), and to approve the charter amendment each require approval by the affirmative vote of holders of two-thirds of the outstanding AMB common stock. The proposal to approve the bylaw amendment requires approval by the affirmative vote of holders of a majority of the outstanding AMB common stock. The proposal to adjourn the AMB special meeting, if necessary or appropriate, to solicit additional proxies requires approval by the affirmative vote of holders of a majority of the shares of AMB common stock represented, in person or by proxy, at the AMB special meeting and entitled to vote on the proposal.
 
ProLogis.  The proposal at the ProLogis special meeting to approve the Merger requires the affirmative vote of the holders of a majority of the outstanding ProLogis common shares. The proposal to adjourn the ProLogis special meeting, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of a majority of the votes cast on the matter by the holders of the ProLogis common shares represented, in person or by proxy, at the ProLogis special meeting.
 
Q: How many votes do I have?
 
A: AMB.  You are entitled to one vote for each share of AMB common stock that you owned as of the close of business on the record date. As of the close of business on April 21, 2011, the record date for the AMB special meeting, there were 169,550,440 outstanding shares of AMB common stock, approximately 2.5% of which were beneficially owned by the directors and executive officers of AMB.
 
ProLogis.  You are entitled to one vote for each ProLogis common share that you owned as of the close of business on the record date. As of the close of business on April 21, 2011, the record date for the ProLogis special meeting, there were approximately 570,550,345 outstanding ProLogis common shares, less than 1% of which were beneficially owned by the trustees and executive officers of ProLogis.
 
Q: What constitutes a quorum?
 
A: AMB.  Stockholders who hold a majority of the AMB common stock outstanding on the record date and who are entitled to vote must be present or represented by proxy to constitute a quorum at the AMB special meeting.
 
ProLogis.  Shareholders who hold a majority of the ProLogis common shares outstanding on the record date and who are entitled to vote must be present or represented by proxy to constitute a quorum at the ProLogis special meeting.
 
Q: If my shares are held in “street name” by my broker, will my broker vote my shares for me?
 
A: If you hold your shares in a stock brokerage account or if your shares are held by a bank or nominee (that is, in “street name”), you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or nominee. Please note that you may not vote shares held in street name by returning a proxy card directly to AMB or ProLogis or by voting in person at your special meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or nominee. Further, brokers who hold shares of AMB common stock or ProLogis common shares on behalf of their customers may not give a proxy to AMB or ProLogis to vote those shares without specific instructions from their customers.
 
Q: What will happen if I fail to vote or I abstain from voting?
 
A: AMB.  If you are an AMB stockholder and fail to vote, fail to instruct your broker, bank or nominee to vote or abstain from voting, it will have the same effect as a vote against the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), a vote against the bylaw amendment and a vote against the charter amendment. If you fail to vote or fail to instruct your broker, bank or nominee to vote, and as a result your shares are not represented at the meeting, it will have no effect on the adjournment proposal. If your shares are represented at the meeting but you abstain from voting or your shares are otherwise not voted in favor of the adjournment proposal, it will have the effect of a vote against that proposal.


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ProLogis.  If you are a ProLogis shareholder and fail to vote, fail to instruct your broker, bank or nominee to vote or abstain from voting, it will have the same effect as a vote against the proposal to approve the Merger, but it will have no effect on the ProLogis adjournment proposal.
 
Q: What will happen if I fail to instruct my broker, bank or nominee how to vote?
 
A: AMB.  If you are an AMB stockholder and you do not instruct your broker, bank or nominee on how to vote your shares, your broker may not vote your shares on the proposal to approve the Topco merger, the proposal to approve the bylaw amendment or the proposal to approve the charter amendment. This will have the same effect as a vote against each of such proposals.
 
ProLogis.  If you are a ProLogis shareholder and you fail to instruct your broker, bank or nominee to vote, it will have the same effect as a vote against the proposal to approve the Merger.
 
Q: What if I return my proxy card without indicating how to vote?
 
A: If you sign and return your proxy card without indicating how to vote on any particular proposal, your shares will be voted in accordance with the recommendation of the AMB board of directors or ProLogis board of trustees, as applicable, with respect to such proposal.
 
Q: Can I change my vote after I have returned a proxy or voting instruction card?
 
A: Yes. You can change your vote at any time before your proxy is voted at your special meeting. You can do this in one of three ways:
 
• you can send a signed notice of revocation;
 
• you can grant a new, valid proxy bearing a later date; or
 
• if you are a holder of record, you can attend your special meeting and vote in person, which will automatically cancel any proxy previously given, or you may revoke your proxy in person, but your attendance alone will not revoke any proxy that you have previously given.
 
If you choose either of the first two methods, you must submit your notice of revocation or your new proxy to the secretary of AMB or secretary of ProLogis, as appropriate, no later than the beginning of the applicable special meeting. If your shares are held in street name by your broker, bank or nominee, you should contact your broker, bank or nominee to change your vote.
 
Q: What are the material U.S. federal income tax consequences of the Merger to U.S. holders of ProLogis common shares?
 
A: Each of the ProLogis merger and the Topco merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. Assuming each of the ProLogis merger and the Topco merger qualifies as a reorganization, a U.S. holder of ProLogis common shares generally will not recognize any gain or loss upon surrender of ProLogis common shares and receipt of shares of AMB common stock, except with respect to cash received in lieu of a fractional share of AMB common stock.
 
Q: When do you expect the Merger to be completed?
 
A: AMB and ProLogis are working to complete the Merger in the second quarter of 2011. However, the Merger is subject to various regulatory approvals and other conditions, and it is possible that factors outside the control of both companies could result in the Merger being completed at a later time, or not at all. There may be a substantial amount of time between the respective AMB and ProLogis special meetings and the completion of the Merger. AMB and ProLogis expect to complete the Merger as soon as reasonably practicable following the receipt of all required approvals.
 
Q: What do I need to do now?
 
A: Carefully read and consider the information contained in and incorporated by reference into this joint proxy statement/prospectus, including its annexes.
 
In order for your shares to be represented at your special meeting:


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• you can attend your special meeting in person;
 
• you can vote through the Internet or by telephone by following the instructions included on your proxy card; or
 
• you can indicate on the enclosed proxy or voting instruction card how you would like to vote and return the card in the accompanying postage-paid envelope.
 
Q: Do I need to do anything with my share certificates now?
 
A: No. You should not submit your share certificates at this time. After the Merger is completed, if you held certificates representing ProLogis common shares or preferred shares prior to the Merger, the exchange agent for the combined company will send you a letter of transmittal and instructions for exchanging your shares for the merger consideration. Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions, a ProLogis shareholder will receive the merger consideration.
 
If you are an AMB stockholder, you are not required to take any action with respect to your AMB stock certificates. Such certificates will continue to represent shares of the combined company after the Topco merger. However, after the Topco merger is completed, the exchange agent for the combined company will send you a letter of transmittal and instructions for exchanging your AMB stock certificates for stock certificates of the combined company. Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions, an AMB stockholder will receive a stock certificate of the combined company.
 
Q: Do I need identification to attend the AMB special meeting or ProLogis special meeting in person?
 
A: Yes. Please bring proper identification, together with proof that you are a record owner of AMB common stock or ProLogis common shares. If your shares are held in street name or through an AMB or ProLogis retirement plan, please bring acceptable proof of ownership, such as a letter from your broker or an account statement stating or showing that you beneficially owned shares of AMB common stock or ProLogis common shares, as applicable, on the applicable record date.
 
Q: Who can help answer my questions?
 
A: AMB stockholders or ProLogis shareholders who have questions about the Merger or the other matters to be voted on at the special meetings or who desire additional copies of this joint proxy statement/prospectus or additional proxy or voting instruction cards should contact:
 
     
if you are an AMB stockholder:

MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
 
if you are a ProLogis shareholder:

Georgeson Inc.
199 Water Street - 26th Floor
New York, New York 10038
Banks and Brokers Call: (212) 440-9800
or
Call Toll Free: (888) 867-6963
Email: proxy@mackenziepartners.com    


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SUMMARY
 
This summary highlights information contained elsewhere in this joint proxy statement/prospectus and may not contain all the information that is important to you. AMB and ProLogis urge you to read carefully the remainder of this joint proxy statement/prospectus, including the attached annexes, and the other documents to which we have referred you because this section does not provide all the information that might be important to you with respect to the Merger and the related matters being considered at the applicable special meeting. See also “Where You Can Find More Information.” We have included page references to direct you to a more complete description of the topics presented in this summary.
 
Information about the Companies
 
AMB Property Corporation (See page 31)
 
AMB, a Maryland corporation, is a self-administered and self-managed real estate investment trust (which we refer to as a “REIT”) for U.S. federal income tax purposes. AMB, together with its subsidiaries, is a global owner, operator and developer of industrial real estate, focused on major hub and gateway distribution markets in the Americas, Europe and Asia. As of December 31, 2010, the company owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 159.6 million square feet (14.8 million square meters) in 49 markets within 15 countries.
 
The business of AMB is operated primarily through its operating partnership, AMB Property, L.P. (which we refer to as “AMB LP”). As of December 31, 2010, AMB owned an approximate 98.2% general partnership interest in AMB LP, excluding preferred units, and, as its sole general partner, AMB has the full, exclusive and complete responsibility for and discretion in the day-to-day management and control of AMB LP. AMB LP holds substantially all the assets of AMB and directly or indirectly holds the ownership interests in AMB’s joint ventures.
 
The principal offices of AMB are located at Pier 1, Bay 1, San Francisco, California 94111 and its telephone number is (415) 394-9000. AMB common stock is listed on the New York Stock Exchange (which we refer to as the “NYSE”), trading under the symbol “AMB.”
 
Additional information about AMB and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus and “Where You Can Find More Information.”
 
ProLogis (See page 31)
 
ProLogis, a Maryland real estate investment trust, is the leading global provider of distribution facilities, with more than 435 million square feet (40 million square meters) of industrial space in markets across North America, Europe and Asia. The company leases its industrial facilities to more than 4,400 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises with large-scale distribution needs. ProLogis owns and manages a global portfolio of properties in 19 countries, comprising over $31 billion in assets. New Pumpkin, a Maryland corporation, Upper Pumpkin, a Delaware limited liability company, and Pumpkin LLC, a Delaware limited liability company, are direct or indirect wholly owned subsidiaries of ProLogis and were formed for the purpose of effecting the Merger.
 
The principal offices of ProLogis are located at 4545 Airport Way, Denver, Colorado 80239 and its telephone number is (303) 567-5000. ProLogis common shares of beneficial interest (which we refer to as “ProLogis common shares”) are listed on the NYSE, trading under the symbol “PLD.”
 
Additional information about ProLogis and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus and “Where You Can Find More Information.”
 
The Combined Company (See page 32)
 
The combined company will be named “ProLogis, Inc.” and will be a Maryland corporation that is a self-administered and self-managed REIT for U.S. federal income tax purposes. The combined company is expected to be a leading global owner, operator and developer of industrial real estate. The combined company is expected to have a pro forma equity market capitalization of approximately $14 billion, a total market capitalization in excess of


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$24 billion, and gross assets owned and managed of approximately $46 billion. The combined company will own or manage approximately 600 million square feet (approximately 55 million square meters) of modern distribution facilities located in key gateway markets and logistics corridors in 22 countries.
 
References to the “combined company” in this document shall be to AMB Property Corporation after the effective time of the Merger, which will be renamed as “ProLogis, Inc.”
 
The business of the combined company will be operated through an operating partnership, ProLogis, L.P. On a pro forma basis giving effect to the Merger, the combined company will own an approximate 99.3% general partnership interest in the operating partnership, excluding preferred units, and, as its sole general partner, the combined company will have the full, exclusive and complete responsibility for and discretion in the day-to-day management and control of the operating partnership.
 
The corporate headquarters of the combined company will be located at Pier 1, Bay 1, San Francisco, California 94111 and its telephone number will be (415) 394-9000. The operational headquarters of the combined company will be located at 4545 Airport Way, Denver, Colorado 80239 and its telephone number will be (303) 567-5000.
 
The common stock of the combined company will be listed on the NYSE, trading under the symbol “PLD.”
 
Risk Factors (See page 23)
 
Before voting at the AMB special meeting or the ProLogis special meeting, you should carefully consider all of the information contained in or as incorporated by reference into this joint proxy statement/prospectus, as well as the specific factors under the heading “Risk Factors.”
 
The Merger
 
The Merger Agreement (See page 77)
 
AMB and ProLogis have entered into the merger agreement attached as Annex A to this joint proxy statement/prospectus. The AMB board of directors and the ProLogis board of trustees have both unanimously approved the combination of AMB and ProLogis in what the parties intend to be a “merger of equals.” AMB and ProLogis encourage you to read the entire merger agreement carefully because it is the principal legal document governing the Merger.
 
Form of the Merger (See page 77)
 
Pursuant to the merger agreement, AMB and ProLogis will combine through a multi-step process:
 
  •  first, in the ProLogis merger, ProLogis will be reorganized into an UPREIT by merging Pumpkin LLC with and into ProLogis, with ProLogis continuing as the surviving entity and as a wholly owned subsidiary of Upper Pumpkin and an indirect wholly owned subsidiary of New Pumpkin;
 
  •  following the ProLogis merger, in the Topco merger, New Pumpkin will be merged with and into AMB, with AMB continuing as the surviving corporation under the name of “ProLogis, Inc.”; and
 
  •  following the Topco merger, the combined company will contribute all of the outstanding equity interests of Upper Pumpkin to AMB LP, which will be renamed “ProLogis, L.P.”, in exchange for the issuance of partnership units to the combined company.
 
ProLogis will continue its existence as a subsidiary of the combined company. The shares of common stock of the combined company will be listed and traded on the NYSE under the symbol “PLD.”
 
We expect that the former shareholders of ProLogis and the former stockholders of AMB will own approximately 60% and 40%, respectively, of the outstanding common stock of the combined company.
 
Merger Consideration (See page 77)
 
Upon completion of the Merger, holders of ProLogis common shares will receive 0.4464 of a newly issued share of AMB common stock for each ProLogis common share they own at the effective time of the Topco merger,


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with cash paid in lieu of fractional shares. The exchange ratio is fixed and will not be adjusted for changes in the market value of ProLogis common shares or AMB common stock. Because of this, the implied value of the consideration to ProLogis shareholders will fluctuate between now and the completion of the Merger. Based on the closing price of AMB common stock on the NYSE of $32.86 on January 26, 2011, the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies, the exchange ratio represented approximately $14.67 in AMB common stock for each ProLogis common share. Based on the closing price of AMB common stock on the NYSE of $32.93 on January 28, 2011, the last trading day before public announcement of the Merger, the exchange ratio represented approximately $14.70 in AMB common stock for each ProLogis common share. Based on the closing price of AMB common stock on the NYSE of $36.52 on April 26, 2011, the latest practicable date before the date of this joint proxy statement/prospectus, the exchange ratio represented approximately $16.30 in AMB common stock for each ProLogis common share. See “Comparative Stock Prices and Dividends.”
 
The following table presents trading information for AMB common stock and ProLogis common shares on January 26, 2011, the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies, January 28, 2011, the last trading day before public announcement of the Merger, and April 26, 2011, the latest practicable date before the date of this joint proxy statement/prospectus. Equivalent per share prices for ProLogis common shares, adjusted by the exchange ratio of 0.4464, are also provided for each of these dates.
 
                         
            Equivalent
    AMB Common Stock
  ProLogis Common
  Per Share
    (Close)   Shares (Close)   Price
 
January 26, 2011
  $ 32.86     $ 14.70     $ 14.67  
January 28, 2011
  $ 32.93     $ 15.21     $ 14.70  
April 26, 2011
  $ 36.52     $ 16.43     $ 16.30  
 
The market prices of AMB common stock and ProLogis common shares fluctuate. As a result, we urge you to obtain current market quotations of AMB common stock and ProLogis common shares.
 
Treatment of ProLogis Share Options and Other Equity-Based Awards (See page 78)
 
Upon completion of the Topco merger, outstanding share options to purchase ProLogis common shares, share unit awards with respect to ProLogis common shares, dividend equivalent units with respect to ProLogis common shares and performance share awards denominated in ProLogis common shares will generally be converted into stock options, stock unit awards, dividend equivalent units and performance stock awards with respect to common stock of the combined company, after giving effect to the exchange ratio. Equity awards of AMB will remain outstanding upon completion of the Merger as equity awards of the combined company.
 
The ProLogis Employee Share Purchase Plan will be automatically suspended effective as of the earlier of June 30, 2011 or ProLogis’ payroll period ending immediately prior to the closing of the Topco merger, but in no event less than ten business days prior to the closing of the Topco merger, and any contributions made for the offering period in effect as of January 30, 2011, the date of the merger agreement, will be applied to the purchase of ProLogis common shares, and any cash remaining in the ProLogis Employee Share Purchase Plan after such suspension date will be promptly refunded to plan participants. See “The Merger — Treatment of ProLogis Share Options and Other Equity-Based Awards.”
 
Treatment of ProLogis Preferred Shares in the Merger (See page 77)
 
Upon completion of the Merger:
 
  •  each outstanding Series C Cumulative Redeemable Preferred Share of Beneficial Interest of ProLogis (which we refer to as “ProLogis Series C preferred shares”) will be exchanged for one newly issued share of Cumulative Redeemable Preferred Stock, Series Q, of AMB (which we refer to as “AMB Series Q preferred stock”);


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  •  each outstanding Series F Cumulative Redeemable Preferred Share of Beneficial Interest of ProLogis (which we refer to as “ProLogis Series F preferred shares”) will be exchanged for one newly issued share of Cumulative Redeemable Preferred Stock, Series R, of AMB (which we refer to as “AMB Series R preferred stock”); and
 
  •  each outstanding Series G Cumulative Redeemable Preferred Share of Beneficial Interest of ProLogis (which we refer to as “ProLogis Series G preferred shares”) will be exchanged for one newly issued share of Cumulative Redeemable Preferred Stock, Series S, of AMB (which we refer to as “AMB Series S preferred stock”).
 
Recommendations of the AMB Board of Directors (See page 39)
 
After careful consideration, the AMB board of directors, on January 30, 2011, unanimously approved the merger agreement and declared the merger agreement and the transactions contemplated thereby (including the Topco merger, the bylaw amendment and the charter amendment) to be advisable and in the best interests of AMB and the stockholders of AMB.
 
The AMB board of directors unanimously recommends that holders of AMB common stock vote “FOR” the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), “FOR” the bylaw amendment, “FOR” the charter amendment and “FOR” the AMB adjournment proposal.
 
For the factors considered by the AMB board of directors in reaching its decision to approve the merger agreement and the recommendations of the AMB board of directors, see “The Merger — AMB’s Reasons for the Topco Merger; Recommendations of the AMB Board of Directors.”
 
Recommendation of the ProLogis Board of Trustees (See page 42)
 
After careful consideration, the ProLogis board of trustees, on January 30, 2011, unanimously approved the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the Merger, to be advisable and in the best interests of ProLogis and the shareholders of ProLogis.
 
The ProLogis board of trustees unanimously recommends that the ProLogis shareholders vote “FOR” the proposal to approve the Merger and “FOR” the ProLogis adjournment proposal.
 
For the factors considered by the ProLogis board of trustees in reaching its decision to approve the merger agreement and the recommendations of the ProLogis board of trustees, see “The Merger — ProLogis’ Reasons for the Merger; Recommendations of the ProLogis Board of Trustees.”
 
Opinion of AMB’s Financial Advisor (See page 45)
 
J.P. Morgan Securities LLC (which we refer to as “J.P. Morgan”) delivered its opinion to the AMB board of directors that, as of January 30, 2011, and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the exchange ratio of 0.4464 provided for in the Topco merger was fair, from a financial point of view, to AMB. The full text of the written opinion of J.P. Morgan, dated January 30, 2011, which sets forth the assumptions made, procedures followed, factors considered, and qualifications and limitations on the review undertaken by J.P. Morgan in connection with its opinion, is attached hereto as Annex D to this joint proxy statement/prospectus and is incorporated herein by reference. The opinion of J.P. Morgan was directed to the AMB board of directors for the information and assistance of the AMB board of directors in connection with its evaluation of the Topco merger and addressed only the fairness as of the date of the opinion, from a financial point of view, of the exchange ratio to AMB. The opinion of J.P. Morgan was not intended to, and does not, constitute a recommendation to any holder of AMB common stock as to how such stockholder should vote or act with respect to the Topco merger or any other matter.


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Opinion of ProLogis’ Financial Advisor (See page 52)
 
Morgan Stanley & Co. Incorporated (which we refer to as “Morgan Stanley”) delivered its opinion to the ProLogis board of trustees that, as of January 30, 2011, and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the exchange ratio of 0.4464 pursuant to the merger agreement was fair, from a financial point of view, to the holders of ProLogis common shares. The full text of the written opinion of Morgan Stanley, dated January 30, 2011, which sets forth the assumptions made, procedures followed, factors considered, and qualifications and limitations on the review undertaken by Morgan Stanley in connection with its opinion, is attached hereto as Annex E to this joint proxy statement/prospectus and is incorporated herein by reference. The opinion of Morgan Stanley was directed to the ProLogis board of trustees, addressed only the fairness as of the date of the opinion, from a financial point of view, of the exchange ratio to the holders of ProLogis common shares and does not address any other aspect of the transaction. The opinion of Morgan Stanley was not intended to, and does not, constitute a recommendation to any holder of ProLogis common shares or AMB common stock as to how such shareholder or stockholder should vote or act with respect to the Merger or any matter.
 
Interests of AMB Directors and Executive Officers in the Merger (See page 65)
 
In considering the recommendation of the AMB board of directors that AMB stockholders vote to approve the Topco merger, AMB stockholders should be aware that some of the executive officers and directors of AMB have financial interests in the Merger that are different from, or in addition to, the interests of AMB stockholders generally. The AMB board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the Topco merger, in approving the merger agreement, and in recommending that the AMB stockholders approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger). For purposes of all of the AMB agreements and plans described below, the completion of the transactions contemplated by the merger agreement will constitute a change in control of AMB.
 
In connection with the Topco merger, AMB LP entered into letter agreements with each AMB executive officer which, conditioned upon and effective as of the consummation of the Topco merger, amend their existing change in control agreements with AMB LP. The general purpose of such amendments was to provide that the vesting of the equity awards held by the AMB executive officers would accelerate only upon a severance-qualifying termination following a change in control (instead of immediate acceleration following the change in control). These change in control agreements with AMB LP, as amended by the letter agreements, provide severance and other benefits in the case of qualifying terminations of employment within two years following a change in control of AMB, such as the Topco merger or another change in control of the combined company.
 
The terms of the deferred compensation plans of AMB provide that upon a change in control, such as the Topco merger, participants will receive a lump-sum payment equal to his or her vested account balance. Each of AMB’s executive officers (with the exception of Mr. Eugene F. Reilly) is a participant under such plans. Conditioned upon the consummation of the Topco merger, AMB also adopted a new supplemental non-qualified deferred compensation plan to provide an opportunity for participants under AMB’s existing deferred compensation plan to continue to receive tax-deferred earnings with respect to the shares or cash withheld to pay taxes as a result of the required, non-waivable, distributions under the existing deferred compensation plans which will be triggered by the consummation of the Topco merger. These grants would not make participants whole for taxes paid on the required distributions, but only whole to the extent that those taxes will be paid earlier than both they and AMB anticipated when deferrals under the existing deferred compensation plans were made.
 
Following the consummation of the Merger, Mr. Hamid R. Moghadam, Ms. Lydia H. Kennard, Mr. J. Michael Losh, Mr. Jeffrey L. Skelton and Mr. Carl B. Webb, each of whom is currently a member of the AMB board of directors, will be elected to the board of directors of the combined company. Mr. Moghadam will serve as chairman and co-chief executive officer of the combined company until no later than December 31, 2012, following which he will become sole chief executive officer and remain chairman of the combined company. Mr. Olinger, the current chief financial officer of AMB, will serve as the chief integration officer of the combined company until no later than December 31, 2012, following which he will become the chief financial officer of the combined company.


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Interests of ProLogis Trustees and Executive Officers in the Merger (See page 68)
 
In considering the recommendation of the ProLogis board of trustees that ProLogis shareholders vote to approve the Merger, you should be aware that some of the trustees and executive officers of ProLogis have interests in the Merger that are different from, or in addition to, the interests of ProLogis shareholders generally. The board of trustees of ProLogis was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the Merger, in approving the merger agreement, and in recommending that the ProLogis shareholders approve the Merger.
 
In connection with the Topco merger, ProLogis has entered into letter agreements with certain executive officers (and expects to enter into letter agreements with other non-executive senior officers) which, conditioned upon and effective as of the consummation of the Topco merger, amend their existing executive protection agreements with ProLogis. These executive protection agreements with ProLogis, as amended by the letter agreements, provide severance and other benefit protections in the case of qualifying terminations of employment for a limited period of time following the Topco merger or another change in control of the combined company.
 
ProLogis also entered into an employment agreement with Mr. Walter C. Rakowich which will become effective on January 1, 2012, provided that the Topco merger has occurred by that date. Among other things, the new employment agreement provides that he will provide services as the co-chief executive officer of the combined company until December 31, 2012, subject to earlier termination in accordance with its terms. Under the new employment agreement, Mr. Rakowich waived his right to resign his employment in a constructive discharge under his current employment agreement with ProLogis solely due to his position as co-chief executive officer of the combined company following the consummation of the Topco merger.
 
Following the consummation of the Merger, six persons selected by ProLogis, Mr. Walter C. Rakowich, Mr. Irving F. Lyons III, Mr. George L. Fotiades, Ms. Christine Garvey, Mr. D. Michael Steuert and Mr. William D. Zollars, each of whom (other than Mr. Zollars) is currently a member of the ProLogis board of trustees, will be elected to the board of directors of the combined company. Mr. Rakowich will also become the chairman of the executive committee of the board of directors of the combined company, and Mr. Lyons will become the lead independent director of the combined company. In addition, Mr. Rakowich will become co-chief executive officer of the combined company, until no later than December 31, 2012, when his employment as a director and co-chief executive officer will expire and he will retire from both positions. Furthermore, Mr. William E. Sullivan, the current chief financial officer of ProLogis, will become chief financial officer of the combined company, and his employment as chief financial officer of the combined company will continue until December 31, 2012, subject to earlier termination in accordance with the terms of his employment.
 
See “The Merger — Interests of ProLogis Trustees and Executive Officers in the Merger” for additional information about these interests.
 
Directors and Management Following the Merger (See page 71)
 
Following the consummation of the Merger, the board of directors of the combined company will have eleven members, consisting of Mr. Moghadam, Mr. Rakowich, Mr. Fotiades, Ms. Garvey, Ms. Kennard, Mr. Losh, Mr. Lyons, Mr. Skelton, Mr. Steuert, Mr. Webb and Mr. Zollars. Mr. Moghadam will become chairman of the board of directors of the combined company and Mr. Rakowich will become the chairman of the executive committee of the board of directors of the combined company. Mr. Lyons will become the lead independent director of the combined company.
 
Following the Merger, the senior leadership team of the combined company will include Mr. Moghadam and Mr. Rakowich as co-chief executive officers, Mr. Sullivan as chief financial officer, Mr. Olinger as chief integration officer, Mr. Michael S. Curless as chief investment officer, Mr. Guy F. Jaquier as CEO, Private Capital, Mr. Gary E. Anderson as CEO, Europe & Asia, Mr. Eugene F. Reilly as CEO, The Americas, Mr. Edward S. Nekritz as chief legal officer and general counsel and Ms. Nancy Hemmenway as chief human resources officer.
 
See “The Merger — Directors and Management Following the Merger” for additional information about these interests.


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Accounting Treatment (See page 73)
 
AMB and ProLogis prepare their financial statements, respectively, in accordance with accounting principles generally accepted in the United States (which we refer to as “GAAP”). The Merger will be accounted for by applying the purchase method of accounting, with ProLogis treated as the acquirer. See “The Merger — Accounting Treatment.”
 
Expected Timing of the Merger (See page 79)
 
We currently expect to complete the Merger in the second quarter of 2011, subject to receipt of required shareholder and regulatory approvals and the satisfaction or waiver of the other closing conditions summarized below. It is possible that factors outside the control of both companies could result in the Merger being completed at a later time, or not at all. There may be a substantial amount of time between the respective AMB and ProLogis special meetings and the completion of the Merger. AMB and ProLogis hope to complete the Merger as soon as reasonably practicable following the receipt of all required approvals.
 
Regulatory Approvals Required for the Merger (See page 73)
 
Competition approvals for the Merger were sought and obtained in Canada, Germany and Mexico. At any time before or after the combination, the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission, or a U.S. state attorney general could take action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the Merger or seeking divestiture of assets of AMB or ProLogis or their subsidiaries. Private parties may also bring legal actions under the antitrust laws under certain circumstances. While AMB and ProLogis do not expect any such action to be taken, they can give no assurance that a challenge to the Merger will not be made or, if made, would be unsuccessful. See “The Merger — Regulatory Approvals Required for the Merger.”
 
Conditions to Completion of the Merger (See page 87)
 
As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the Merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others:
 
  •  receipt of the requisite approvals of AMB stockholders and ProLogis shareholders;
 
  •  the approval for listing of shares of AMB common stock, AMB Series R preferred stock and AMB Series S preferred stock to be issued or reserved for issuance in connection with the Merger on the NYSE;
 
  •  the SEC having declared effective the registration statement of which this joint proxy statement/prospectus forms a part;
 
  •  the absence of any judgment or other legal prohibition or binding order of any court or other governmental entity prohibiting the Merger;
 
  •  the receipt of regulatory approvals required in connection with the Merger;
 
  •  the correctness of all representations and warranties made by the parties in the merger agreement and performance by the parties of their obligations under the merger agreement (subject in each case to certain materiality standards);
 
  •  the receipt of a legal opinion from tax counsel of ProLogis regarding the qualification of the ProLogis merger as a reorganization for U.S. federal income tax purposes; and
 
  •  the receipt of legal opinions from the respective tax counsels of AMB and ProLogis regarding the qualification of the Topco merger as a reorganization for U.S. federal income tax purposes and the qualification of each of the parties as a REIT.
 
We cannot be certain when, or if, the conditions to the Merger will be satisfied or waived, or that the Merger will be completed.


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Termination of the Merger Agreement (See page 90)
 
The merger agreement may be terminated prior to the effective time of the Merger, whether before or after the required approvals of the AMB stockholders and ProLogis shareholders are obtained:
 
  •  by mutual written consent of AMB and ProLogis;
 
  •  by either AMB or ProLogis, if the Merger is not consummated by September 30, 2011;
 
  •  by either AMB or ProLogis, if a court or other governmental entity issues a final and nonappealable order prohibiting the Merger;
 
  •  by either AMB or ProLogis, if the required approvals of either the AMB stockholders or the ProLogis shareholders are not obtained;
 
  •  by either AMB or ProLogis, if there is a breach of the representations or covenants of the other party that would result in the failure of the related closing condition to be satisfied, and such breach is not cured or is not curable by September 30, 2011;
 
  •  by either AMB or ProLogis, if the board of the other party changes its recommendation in favor of the Topco merger, in the case of the board of AMB, or the ProLogis merger or Topco merger in the case of the board of ProLogis;
 
  •  by either AMB or ProLogis, if the special meeting of the other party is not called and held as required by the merger agreement; or
 
  •  by either AMB or ProLogis, upon a material breach of the other party’s non-solicitation obligations under the merger agreement.
 
Expenses and Termination Fees (See page 90)
 
Generally, all fees and expenses incurred in connection with the Merger and the transactions contemplated by the merger agreement will be paid by the party incurring those expenses. See “The Merger — The Merger Agreement — Fees and Expenses.” The merger agreement further provides that, upon termination of the merger agreement under certain circumstances, AMB may be obligated to pay ProLogis a termination fee of $210 million, ProLogis may be obligated to pay AMB a termination fee of $315 million and either party may be obligated to reimburse up to $20 million of the expenses of the other party. See “The Merger — The Merger Agreement — Termination of the Merger Agreement” for a complete discussion of the circumstances under which termination fees will be required to be paid.
 
No Appraisal or Dissenters’ Rights (See page 75)
 
Under Maryland law, the holders of ProLogis common shares and preferred shares and AMB common stock and preferred stock are not entitled to appraisal rights in connection with the Merger. See “The Merger — No Appraisal or Dissenters’ Rights.”
 
Litigation Relating to the Merger (See page 75)
 
ProLogis, the members of the ProLogis board of trustees, New Pumpkin, Upper Pumpkin, Pumpkin LLC, AMB and AMP LP have each been named as defendants in lawsuits brought by holders of ProLogis common shares challenging the Merger and seeking, among other things, to enjoin the Merger, direct defendants to exercise their fiduciary duties, rescind the merger agreement and award the plaintiffs damages and expenses. The parties to the lawsuits brought in Maryland have executed a memorandum of understanding that embodies their agreement in principle on the structure of a proposed settlement, and the parties to the lawsuits brought in Colorado have also reached an agreement in principle on a proposed settlement. ProLogis and AMB believe that the claims are without merit and, absent court approval of the proposed settlement, intend to vigorously defend against these actions. See “The Merger — Litigation Relating to the Merger” for more information about litigation related to the Merger.


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Material U.S. Federal Income Tax Consequences of the Merger (See page 94)
 
Each of the ProLogis merger and the Topco merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”), and the merger agreement is intended to be and is adopted as a separate “plan of reorganization” for each of the ProLogis merger and the Topco merger for purposes of Sections 354 and 361 of the Code. Assuming each of the ProLogis merger and the Topco merger qualifies as such a reorganization, a U.S. holder of ProLogis common shares generally will not recognize any gain or loss for U.S. federal income tax purposes upon surrender of ProLogis common shares and receipt of shares of AMB common stock, except with respect to cash received in lieu of a fractional share of AMB common stock. It is a condition to the completion of the Merger that ProLogis receive a written opinion from its counsel to the effect that the ProLogis merger will qualify as a reorganization within the meaning of Section 368(a) of the Code, and that AMB and ProLogis receive written opinions from their respective counsel to the effect that the Topco merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.
 
Tax matters are very complicated and the tax consequences of the Merger to each ProLogis shareholder may depend on such shareholder’s particular facts and circumstances. ProLogis shareholders are urged to consult their tax advisors to understand fully the tax consequences to them of the Merger. See “Material U.S. Federal Income Tax Consequences.”
 
The AMB Special Meeting (See page 116)
 
The AMB special meeting will be held at AMB Property Corporation’s global headquarters, which are located at Pier 1, Bay 1, San Francisco, California 94111, at 9:00 a.m., local time, on June 1, 2011. You may vote at the AMB special meeting if you owned shares of AMB common stock at the close of business on April 21, 2011, the record date for the AMB special meeting. On that date, there were 169,550,440 shares of AMB common stock outstanding and entitled to vote. You may cast one vote for each share of AMB common stock that you owned on that date.
 
At the AMB special meeting, AMB stockholders will be asked to consider and vote upon:
 
  •  a proposal to approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger);
 
  •  a proposal to approve the bylaw amendment;
 
  •  a proposal to approve the charter amendment; and
 
  •  a proposal to adjourn the AMB special meeting, if necessary or appropriate, to solicit additional proxies in favor of the foregoing proposals.
 
The approval of both the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger) and the bylaw amendment is required for the completion of the Merger. The bylaw amendment and the charter amendment will take effect only upon the consummation of the Topco merger. However, approval of the charter amendment is not a condition to completion of the Topco merger.
 
The proposals at the AMB special meeting to approve the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger) and to approve the charter amendment each require approval by the affirmative vote of holders of two-thirds of the outstanding AMB common stock. The proposal to approve the bylaw amendment requires approval by the affirmative vote of holders of a majority of the outstanding AMB common stock. The proposal to adjourn the AMB special meeting, if necessary or appropriate, to solicit additional proxies requires approval by the affirmative vote of holders of a majority of the shares of AMB common stock represented, in person or by proxy, at the AMB special meeting and entitled to vote on the proposal.
 
As of April 21, 2011, the record date for the AMB special meeting, approximately 2.5% of the outstanding shares of AMB common stock were held by AMB directors and executive officers and their affiliates. AMB currently expects that the AMB directors and executive officers will vote their shares in favor of the Topco merger


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(including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), the bylaw amendment, the charter amendment and the AMB adjournment proposal, although none has entered into any agreements obligating them to do so.
 
The board of directors of AMB unanimously recommends that AMB stockholders vote “FOR” all of the proposals set forth above. See “AMB Special Meeting” for further discussion of the AMB special meeting.
 
The ProLogis Special Meeting (See page 123)
 
The special meeting of ProLogis shareholders will be held at ProLogis’ world headquarters, 4545 Airport Way, Denver, Colorado 80239, at 9:00 a.m., local time, on June 1, 2011. You may vote at the ProLogis special meeting if you owned ProLogis common shares at the close of business on April 21, 2011, the record date for the ProLogis special meeting. On that date, there were 570,550,345 ProLogis common shares outstanding and entitled to vote. You may cast one vote for each ProLogis common share that you owned on that date.
 
At the ProLogis special meeting, shareholders of ProLogis will be asked to consider and vote upon:
 
  •  a proposal to approve the Merger; and
 
  •  a proposal to adjourn the ProLogis special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to approve the Merger.
 
The approval of the Merger requires the affirmative vote of the holders of a majority of the outstanding ProLogis common shares. The approval of the ProLogis adjournment proposal requires the affirmative vote of a majority of the votes cast on the matter by the holders of the ProLogis common shares represented, in person or by proxy, at the ProLogis special meeting.
 
As of April 21, 2011, the record date for the ProLogis special meeting, less than 1% of the outstanding common shares of ProLogis were held by its trustees and executive officers and their affiliates. ProLogis currently expects that the trustees and executive officers of ProLogis will vote their shares in favor of the Merger and the ProLogis adjournment proposal, although none has entered into any agreements obligating them to do so.
 
The ProLogis board of trustees unanimously recommends that ProLogis shareholders vote “FOR” all of the proposals set forth above. See “ProLogis Special Meeting” for further discussion of the ProLogis special meeting.
 
Rights of ProLogis Shareholders Will Change as a Result of the Merger (See page 137)
 
ProLogis shareholders will have different rights once they become stockholders of the combined company, due to differences between the governing documents of AMB and ProLogis. These differences are described in detail under “Comparison of Rights of AMB Stockholders and ProLogis Shareholders.”
 
Recent Developments
 
ProLogis has an ownership interest in, and provides management services to, ProLogis European Properties (which we refer to as “PEPR”), a publicly traded real estate investment fund. In April 2011, a group of third-party investors in PEPR announced their interest in potentially acquiring ProLogis’ ownership interest in PEPR at a price of €6 per ordinary unit, and ProLogis’ management agreement with PEPR. On April 12, 2011, ProLogis announced that it intended to retain both its ownership interest in, and its management agreement with, PEPR.
 
On April 14, 2011, ProLogis announced that it had purchased additional ordinary units in PEPR from a third party, raising ProLogis’ ownership interest in PEPR from approximately 33.1% to approximately 38.9% of the outstanding ordinary units. Pursuant to applicable Luxembourg law, on April 22, 2011, ProLogis commenced a tender offer to acquire any or all of the outstanding ordinary units and convertible preferred units of PEPR that it does not currently own. ProLogis has offered €6.10 per ordinary unit and €6.10 per convertible preferred unit in cash, plus accrued and unpaid dividends. The offer has no material conditions to closing and is expected to expire on May 6, 2011. Pursuant to applicable Luxembourg law, if all conditions to closing are met, ProLogis will be required to acquire all units tendered into the tender offer on the expiration date.


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If all outstanding ordinary units and convertible preferred units are tendered, the aggregate consideration to be paid by ProLogis would be equal to approximately €730.1 million (or approximately $1.1 billion). ProLogis expects to fund the purchase by drawing on its existing global line of credit and with funds borrowed pursuant to a new Senior Bridge Loan Agreement with J.P. Morgan Chase Bank, N.A., an affiliate of J.P. Morgan, providing ProLogis with the ability to borrow up to €500 million (or approximately $730.9 million). Borrowings under the Senior Bridge Loan Agreement will bear interest at a rate equal to the rate at which Euro deposits in the Brussels interbank market are quoted plus a margin based upon the credit rating for ProLogis’ senior debt. Any borrowings under the Senior Bridge Loan will mature in November 2011. The aggregate consideration to be paid by ProLogis, and the resulting funding requirement, will be proportionate to the percentage of units not already owned by ProLogis tendered and acquired in the offer.
 
PEPR’s financial position and results of operations and cash flows currently are not consolidated with those of ProLogis for financial reporting purposes, but ProLogis may be required to so consolidate PEPR in the future depending on the amount, if any, by which its ownership interest in PEPR increases. In addition, ProLogis’ interest in PEPR’s net book value and net income or loss will increase to the extent of the percentage of units, if any, that it acquires in the tender offer. ProLogis intends to keep the management agreement between ProLogis and PEPR in place if ProLogis does not succeed in acquiring all of the outstanding units of PEPR.


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SELECTED HISTORICAL FINANCIAL DATA OF AMB
 
The following tables set forth selected consolidated financial information for AMB. The selected financial data as of and for the three months ended March 31, 2011 represents preliminary operating and balance sheet data. AMB’s results of operations for the three months ended March 31, 2011 are not necessarily indicative of results that may be expected for any future period.
 
The selected statement of operations data for each of the years in the five-year period ended December 31, 2010 and the selected balance sheet data as of December 31 for each of the years in the five-year period ended December 31, 2010 have been derived from the consolidated financial statements of AMB that were audited by PricewaterhouseCoopers LLP. The following information should be read together with the consolidated financial statements of AMB, the notes related thereto and the related reports of management on the financial condition and performance of AMB, all of which are contained in the reports of AMB filed with the SEC and incorporated herein by reference. See “Where You Can Find More Information.”
 
                 
    Three Months Ended
 
    March 31,  
    2011     2010  
    (In millions, except per share amounts)
 
    (Unaudited)  
 
Operating Data:
               
Revenues:
               
Rental revenues
  $ 158     $ 147  
Private capital revenues
    8       7  
                 
Total revenues
    166       154  
                 
Costs and Expenses:
               
Property operating costs
    52       48  
Depreciation and amortization
    55       47  
General and administrative
    31       32  
Merger transaction costs and restructuring charges
    4       3  
Fund costs and other expenses
    1       2  
                 
Total costs and expenses
    143       132  
                 
Other Income and Expenses:
               
Development profits, net of taxes
          5  
Earnings from unconsolidated joint ventures, net
    8       4  
Interest expense, amortization and other income, net
    (34 )     (33 )
                 
Loss from continuing operations
    (3 )     (2 )
                 
Income and gains from discontinued operations
    17       1  
Noncontrolling interests’ share of net income
    (2 )     1  
Preferred stock dividends & allocation to participating securities
    (4 )     (4 )
                 
Net income (loss) available to common stockholders
  $ 8     $ (4 )
                 
Net income (loss) per share available to common stockholders — Basic
  $ 0.05     $ (0.03 )
                 
Net income (loss) per share available to common stockholders — Diluted
  $ 0.05     $ (0.03 )
                 
Weighted average common shares outstanding:
               
Basic
    168       149  
Diluted
    168       149  
 


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    As of March 31, 2011  
    (In millions)  
    (Unaudited)  
 
Balance Sheet Data:
       
Investments in real estate (at cost)
  $ 6,841  
Total assets
  $ 7,421  
Total debt
  $ 3,426  
Total liabilities and noncontrolling interests
  $ 4,118  
Preferred stock
  $ 223  
Total stockholders’ equity (excluding preferred stock)
  $ 3,079  
Number of common shares outstanding
    170  
 
                                         
    Year Ended December 31,
    2010   2009   2008   2007   2006
    (In millions, except per share amounts)
 
Operating Data:
                                       
Total revenues
  $ 634     $ 618     $ 678     $ 636     $ 679  
Income (loss) from continuing operations
  $ 9     $ (124 )   $ (18 )   $ 282     $ 210  
Income from discontinued operations
  $ 24     $ 96     $ 11     $ 90     $ 78  
Net income (loss) before cumulative effect of change in accounting principle
  $ 34     $ (28 )   $ (7 )   $ 372     $ 289  
Net income (loss)
  $ 34     $ (28 )   $ (7 )   $ 372     $ 289  
Net income (loss) available to common stockholders
  $ 10     $ (50 )   $ (66 )   $ 294     $ 208  
(Loss) income from continuing operations available to common stockholders per common share:
                                       
Basic
  $ (0.08 )   $ (1.01 )   $ (0.77 )   $ 2.17     $ 1.54  
Diluted
  $ (0.08 )   $ (1.01 )   $ (0.77 )   $ 2.12     $ 1.49  
Income from discontinued operations available to common stockholders per common share:
                                       
Basic
  $ 0.14     $ 0.64     $ 0.09     $ 0.85     $ 0.83  
Diluted
  $ 0.14     $ 0.64     $ 0.09     $ 0.83     $ 0.80  
Net income (loss) available to common stockholders per common share
                                       
Basic
  $ 0.06     $ (0.37 )   $ (0.68 )   $ 3.02     $ 2.37  
Diluted
  $ 0.06     $ (0.37 )   $ (0.68 )   $ 2.95     $ 2.29  
Cash dividends per common shares
  $ 1.12     $ 1.12     $ 1.56     $ 2.00     $ 1.84  
Weighted average common shares outstanding
                                       
Basic
    162       134       97       97       88  
Diluted
    162       134       97       100       91  
 
                                         
    December 31,
    2010   2009   2008   2007   2006
    (In millions)
 
Balance Sheet Data:
                                       
Investments in real estate (at cost)
  $ 6,906     $ 6,709     $ 6,604     $ 6,710     $ 6,576  
Total assets
  $ 7,373     $ 6,842     $ 7,302     $ 7,262     $ 6,714  
Total debt
  $ 3,331     $ 3,213     $ 3,990     $ 3,495     $ 3,437  
Total liabilities and noncontrolling interests
  $ 4,052     $ 3,902     $ 4,787     $ 4,498     $ 4,547  
Preferred stock
  $ 223     $ 223     $ 223     $ 223     $ 223  
Total stockholders’ equity (excluding preferred stock)
  $ 3,097     $ 2,717     $ 2,292     $ 2,541     $ 1,943  
 

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    For the Years Ended December 31,  
    2010     2009     2008     2007     2006  
    (In millions)  
 
Funds from operations (FFO), as adjusted(1):
                                       
Net income (loss) available to common stockholders
  $ 10     $ (50 )   $ (66 )   $ 294     $ 208  
Gains from sale or contribution of real estate interests, net
    (20 )     (39 )     (23 )     (86 )     (45 )
Total depreciation and amortization
    190       174       162       158       176  
Adjustments to derive FFO, as defined by NAREIT from consolidated joint ventures
    (22 )     (17 )     (19 )     (22 )     (35 )
Adjustments to derive FFO, as defined by NAREIT from unconsolidated joint ventures
    43       32       26       20       (7 )
                                         
Funds from operations, as defined by NAREIT(1)
  $ 201     $ 100     $ 80     $ 364     $ 297  
                                         
Adjustments for impairment charges, restructuring charges, preferred unit redemption (discount) premium and debt extinguishment:
                                       
Real estate impairment losses(2)
    1       182       194       1       6  
Pursuit costs and tax reserve
                12              
Restructuring charges
    5       6       12              
Loss on early extinguishment of debt
    3       12       1              
Preferred unit redemption (discount) premium
          (10 )           3       1  
Allocation to participating securities
          (1 )     (1 )           (1 )
                                         
FFO, as adjusted(1)
  $ 210     $ 289     $ 298     $ 368     $ 303  
                                         
AMB’s share of development profits, net of taxes
    (7 )     (88 )     (77 )     (168 )     (106 )
Allocation to participating securities
                1       1       1  
                                         
Core funds from operations (Core FFO), as adjusted(1)
  $ 203     $ 201     $ 222     $ 201     $ 198  
                                         
Cash flows provided by (used in):
                                       
Operating activities
  $ 253     $ 243     $ 303     $ 241     $ 336  
Investing activities
  $ (587 )   $ 84     $ (882 )   $ (632 )   $ (881 )
Financing activities
  $ 330     $ (298 )   $ 580     $ 420     $ 484  
 
 
(1) AMB believes that net income, as defined by GAAP, is the most appropriate earnings measure. However, AMB considers funds from operations, as adjusted (“FFO, as adjusted”), funds from operations, as defined by NAREIT (“FFO, as defined by NAREIT”) and core funds from operations, as adjusted (“Core FFO, as adjusted”, which together with FFO, as adjusted and FFO, as defined by NAREIT, we refer to as the “FFO Measures, as adjusted”) to be useful supplemental measures of its operating performance. AMB calculates FFO, as adjusted, as net income (or loss) available to common stockholders, calculated in accordance with GAAP, less gains (or losses) from dispositions of real estate held for investment purposes and real estate-related depreciation, and adjustments to derive AMB’s pro rata share of FFO, as adjusted, of consolidated and unconsolidated joint ventures. AMB calculates Core FFO, as adjusted, as FFO, as adjusted excluding the share of development profits of AMB. These calculations also include adjustments for items as described below.
 
Unless stated otherwise, AMB includes the gains from development, including those from value-added conversion projects, before depreciation recapture, as a component of FFO, as adjusted. AMB believes gains from development should be included in FFO, as adjusted, to more completely reflect the performance of one of our lines of business. AMB believes that value-added conversion dispositions are in substance land sales and as such should be included in FFO, as adjusted, consistent with the real estate investment trust industry’s long standing practice to include gains on the sale of land in funds from operations. However, AMB’s interpretation of FFO, as adjusted, may not be consistent with the views of others in the real estate investment trust industry, who may consider it to be a divergence from the National Association of Real Estate Investment Trusts (“NAREIT”) definition, and may not be comparable to funds from operations or funds from operations per share reported by other real estate investment trusts that interpret the current NAREIT definition differently than AMB does. In connection with the formation of a joint venture, AMB

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may warehouse assets that are acquired with the intent to contribute these assets to the newly formed venture. Some of the properties held for contribution may, under certain circumstances, be required to be depreciated under GAAP. AMB includes in its calculation of FFO, as adjusted, gains or losses related to the contribution of previously depreciated real estate to joint ventures. Although it is a departure from the current NAREIT definition, AMB believes such calculation of FFO, as adjusted, better reflects the value created as a result of the contributions.
 
In addition, AMB calculates FFO, as adjusted, to exclude impairment and restructuring charges, debt extinguishment losses and preferred unit redemption discounts/premiums. The impairment charges were principally a result of increases in estimated capitalization rates and deterioration in market conditions that adversely impacted values. The restructuring charges reflected costs associated with the reduction in global headcount and cost structure of AMB. Debt extinguishment losses generally included the costs of repurchasing debt securities. AMB repurchased certain tranches of senior unsecured debt to manage its debt maturities in response to the current financing environment, resulting in greater debt extinguishment costs. The preferred unit redemption discounts/premiums reflect the gain/loss associated with the liquidation preference in the preferred unit redemption price less costs incurred as a result of the redemption. In 2008, AMB also recognized charges to write-off pursuit costs related to development projects it no longer planned to commence and to establish a reserve against tax assets associated with the reduction of its development activities. Although difficult to predict, these items may be recurring given the uncertainty of the current economic climate and its adverse effects on the real estate and financial markets. While not infrequent or unusual in nature, these items result from market fluctuations that can have inconsistent effects on the results of operations of AMB. The economics underlying these items reflect market and financing conditions in the short-term but can obscure the performance of AMB and the value of the long-term investment decisions and strategies of AMB. AMB management believes FFO, as adjusted, is significant and useful to both it and its investors. FFO, as adjusted, more appropriately reflects the value and strength of the business model of AMB and its potential performance isolated from the volatility of the current economic environment and unobscured by costs (or gains) resulting from the management of AMB of its financing profile in response to the tightening of the capital markets. However, in addition to the limitations of the FFO Measures, as adjusted, generally discussed below, FFO, as adjusted, does not present a comprehensive measure of the financial condition and operating performance of AMB. This measure is a modification of the NAREIT definition of funds from operations and should not be used as an alternative to net income or cash flow from operations as defined by GAAP.
 
AMB believes that the FFO Measures, as adjusted, are meaningful supplemental measures of its operating performance because historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expenses. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, the FFO Measures, as adjusted, are supplemental measures of operating performance for real estate investment trusts that exclude historical cost depreciation and amortization, among other items, from net income available to common stockholders, as defined by GAAP. AMB believes that the use of the FFO Measures, as adjusted, combined with the required GAAP presentations, has been beneficial in improving the understanding of operating results of real estate investment trusts among the investing public and making comparisons of operating results among such companies more meaningful. AMB considers the FFO Measures, as adjusted, to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, the FFO Measures, as adjusted, can help the investing public compare the operating performance of a company’s real estate between periods or as compared to other companies. While funds from operations is a relevant and widely used measure of operating performance of real estate investment trusts, the FFO Measures, as adjusted, do not represent cash flow from operations or net income as defined by GAAP and should not be considered as alternatives to those measures in evaluating the liquidity or operating performance of AMB. The FFO Measures, as adjusted, also do not consider the costs associated with capital expenditures related to the real estate assets of AMB nor are the FFO Measures, as adjusted, necessarily indicative of cash available to fund the future cash requirements of AMB. AMB management compensates for the limitations of the FFO Measures, as adjusted, by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of the FFO Measures, as adjusted, and a reconciliation of the FFO Measures, as adjusted, to net income available to common stockholders, a GAAP measurement.
 
(2) Includes adjustments for AMB’s share of real estate impairment losses from unconsolidated and consolidated joint ventures.
 


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SELECTED HISTORICAL FINANCIAL DATA OF PROLOGIS
 
The following tables set forth selected consolidated financial information for ProLogis. The selected financial data as of and for the three months ended March 31, 2011 represents preliminary operating and financial condition data. ProLogis’ results of operations for the three months ended March 31, 2011 are not necessarily indicative of results that may be expected for any future period.
 
The selected data presented below under the captions “Operating Data,” “Common Share Distributions,” “Cash Flow Data” and “Financial Position” for, and as of the end of, each of the years in the five-year period ended December 31, 2010, are derived from the consolidated financial statements of ProLogis and subsidiaries, which financial statements have been audited by KPMG LLP, an independent registered public accounting firm. The information presented below under the caption “FFO” is not included in the consolidated financial statements. The consolidated financial statements and schedule as of December 31, 2010 and 2009, and for each of the years in the three-year period ended December 31, 2010, and the reports thereon, are incorporated by reference in this joint proxy statement/prospectus. The following information should be read together with the consolidated financial statements of ProLogis, the notes related thereto and the related reports of management on the financial condition and performance of ProLogis, all of which are contained in the reports of ProLogis filed with the SEC and incorporated herein by reference. See “Where You Can Find More Information.”
 
                 
    Three Months Ended
 
   
March 31,
 
    2011     2010  
    (In millions, except per share amounts)
 
    (Unaudited)  
 
Operating Data:
               
Revenues:
               
Rental income
  $ 205.3     $ 187.5  
Property management fees and other income
    33.5       29.8  
                 
Total revenues
    238.8       217.3  
                 
Expenses:
               
Rental expenses
    63.3       56.3  
Investment management expenses
    10.6       10.3  
General and administrative
    39.2       42.0  
Merger integration expenses and reduction in workforce
    6.0        
Depreciation and other
    87.3       79.4  
                 
Total expenses
    206.4       188.0  
                 
Operating income
    32.4       29.3  
Other income (expense):
               
Earnings from unconsolidated investees, net
    13.6       8.0  
Loss on early extinguishment of debt
          (47.6 )
Net gains on dispositions of investments in real estate
    3.7       11.8  
Interest, income taxes and other income (expenses), net
    (98.1 )     (114.8 )
                 
Loss from continuing operations
    (48.4 )     (113.3 )
Income from discontinued operations
    8.2       28.8  
                 
Consolidated net loss
  $ (40.2 )   $ (84.5 )
                 
Net loss attributable to common shares
  $ (46.6 )   $ (91.1 )
                 
Net loss per share attributable to common shares — Basic
  $ (0.08 )   $ (0.19 )
                 
Net loss per share attributable to common shares — Diluted
  $ (0.08 )   $ (0.19 )
                 
Weighted average common shares outstanding:
               
Basic
    570.6       475.0  
Diluted
    570.6       475.0  
 


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    As of March 31, 2011  
    (In millions)  
    (Unaudited)  
 
Financial Position
       
Real estate properties owned, excluding land held for development, before depreciation
  $ 11,541.5  
Land held for development or targeted for disposition
  $ 1,600.0  
Net investments in properties
  $ 11,484.7  
Investments in and advances to unconsolidated investees
  $ 2,084.7  
Total assets
  $ 14,935.7  
Total debt
  $ 6,415.0  
Total liabilities
  $ 7,309.3  
Noncontrolling interests
  $ 17.7  
ProLogis shareholders’ equity
  $ 7,608.7  
Number of common shares outstanding
    570.6  
 
                                         
    Years Ended December 31,  
    2010     2009     2008     2007     2006  
    (In millions, except per share amounts)  
Operating Data:
                                       
Total revenues(1)
  $ 909     $ 1,055     $ 5,396     $ 5,944     $ 2,209  
Total expenses(1)
  $ 1,503     $ 1,089     $ 4,897     $ 4,922     $ 1,556  
Operating income (loss)(1)(2)
  $ (594 )   $ (35 )   $ 500     $ 1,022     $ 654  
Interest expense
  $ 461     $ 373     $ 385     $ 389     $ 294  
Earnings (loss) from continuing operations(2)
  $ (1,582 )   $ (346 )   $ (359 )   $ 853     $ 609  
Discontinued operations
  $ 311     $ 370     $ (91 )   $ 205     $ 269  
Consolidated net earnings (loss)(2)
  $ (1,270 )   $ 24     $ (450 )   $ 1,058     $ 878  
Net earnings (loss) attributable to common shares(2)
  $ (1,296 )   $ (3 )   $ (479 )   $ 1,028     $ 849  
Net earnings (loss) per share attributable to common shares — Basic:
                                       
Continuing operations
  $ (3.27 )   $ (0.93 )   $ (1.48 )   $ 3.20     $ 2.36  
Discontinued operations
    0.63       0.92       (0.34 )     0.80       1.09  
     
     
Net earnings (loss) per share attributable to common shares - Basic(2)
  $ (2.64 )   $ (0.01 )   $ (1.82 )   $ 4.00     $ 3.45  
     
     
Net earnings (loss) per share attributable to common shares - Diluted:
                                       
Continuing operations
  $ (3.27 )   $ (0.93 )   $ (1.48 )   $ 3.09     $ 2.27  
Discontinued operations
    0.63       0.92       (0.34 )     0.77       1.05  
     
     
Net earnings (loss) per share attributable to common shares — Diluted(2)
  $ (2.64 )   $ (0.01 )   $ (1.82 )   $ 3.86     $ 3.32  
     
     
Weighted average common shares outstanding:
                                       
Basic
    492       403       263       257       246  
Diluted
    492       403       263       267       257  
Common Share Distributions:
                                       
Common share cash distributions paid
  $ 281     $ 272     $ 543     $ 473     $ 393  
Common share distributions paid per share
  $ 0.56     $ 0.70     $ 2.07     $ 1.84     $ 1.60  
FFO(3):
                                       
Reconciliation of net earnings (loss) to FFO:
                                       
Net earnings (loss) attributable to common shares(2)
  $ (1,296 )   $ (3 )   $ (479 )   $ 1,028     $ 849  
Total NAREIT defined adjustments
    241       213       449       150       149  
     
     
FFO, as defined by NAREIT
    (1,055 )     210       (30 )     1,178       998  
Our defined adjustments:
                                       
Foreign currency exchange losses (gains), net
    11       (58 )     144       16       (19 )
Current income tax expense
          4       10       3       23  
Deferred income tax expense (benefit)
    (52 )     (23 )     4       1       (54 )
Our share of reconciling items from unconsolidated investees:
                                       
Foreign currency exchange losses (gains), net
    (9 )     (2 )     2       2        
Unrealized losses (gains) on derivative contracts, net
    4       (8 )     23              
Deferred income tax expense (benefit)
          16       (19 )     6       (3 )
     
     

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    Years Ended December 31,  
    2010     2009     2008     2007     2006  
    (In millions, except per share amounts)  
     
     
FFO attributable to common shares as defined by ProLogis, including significant non-cash items
    (1,101 )     139       134       1,206       945  
Add (deduct) significant non-cash items:
                                       
Impairment of real estate properties(2)
    824       331       275              
Impairment of goodwill and other assets(2)
    413       164       321              
Impairment (net gain) related to China operations
          (3 )     198              
Loss (gain) on early extinguishment of debt
    31       (172 )     (91 )            
Write-off deferred financing fees associated with credit facility restructuring
    8                          
Our share of certain losses recognized by the property funds, net
    11       9       108              
     
     
FFO attributable to common shares as defined by ProLogis, excluding significant non-cash items
  $ 186     $ 468     $ 945     $ 1,206     $ 945  
     
     
Cash Flow Data:
                                       
Net cash provided by operating activities(1)
  $ 241     $ 89     $ 888     $ 1,230     $ 664  
Net cash provided by (used in) investing activities
  $ 733     $ 1,235     $ (1,347 )   $ (4,076 )   $ (2,047 )
Net cash provided by (used in) financing activities
  $ (970 )   $ (1,463 )   $ 358     $ 2,742     $ 1,645  
 
                                         
    As of December 31,  
    2010     2009     2008(1)     2007(1)     2006  
    (in millions)  
 
Financial Position:
                                       
Real estate properties owned, excluding land held for development, before depreciation
  $ 11,346     $ 12,606     $ 13,234     $ 14,414     $ 12,482  
Land held for development or targeted for disposition(2)
  $ 1,534     $ 2,574     $ 2,483     $ 2,153     $ 1,397  
Net investments in properties
  $ 11,284     $ 13,508     $ 14,134     $ 15,199     $ 12,615  
Investments in and advances to unconsolidated investees
  $ 2,025     $ 2,107     $ 2,195     $ 2,252     $ 1,300  
Total assets
  $ 14,903     $ 16,797     $ 19,210     $ 19,652     $ 15,827  
Total debt
  $ 6,506     $ 7,978     $ 10,711     $ 10,217     $ 8,387  
Total liabilities
  $ 7,382     $ 8,790     $ 12,452     $ 11,848     $ 9,376  
Noncontrolling interests
  $ 15     $ 20     $ 20     $ 79     $ 52  
ProLogis shareholders’ equity
  $ 7,505     $ 7,987     $ 6,738     $ 7,725     $ 6,399  
Number of common shares outstanding
    570       474       267       258       251  
 
 
(1) During 2010 and 2009, ProLogis contributed certain properties with any resulting gain or loss reflected as net gains in the Consolidated Statements of Operations of ProLogis and as cash provided by investing activities. In 2008 and previous years, ProLogis reflected these contributions as gross revenues and expenses as cash provided by operating activities. See the Consolidated Financial Statements of ProLogis contained in Item 8 of ProLogis’ Form 10-K for the year ended December 31, 2010 for more information.
 
(2) During 2010, ProLogis recognized impairment charges of $824.3 million on certain of its real estate properties, which includes $87.7 million in Discontinued Operations and $412.7 million related to goodwill and other assets. During 2009, ProLogis recognized impairment charges of $331.6 million on certain of its real estate properties and $163.6 million related to goodwill and other assets. During 2008, ProLogis recognized impairment charges of $274.7 million on certain of its real estate properties and $320.6 million related to goodwill and other assets. In addition, during 2008, ProLogis recognized impairment charges of $198.2 million in Discontinued Operations related to the net assets of ProLogis’ China operations that were reclassified as held for sale and its share of impairment charges recorded by an unconsolidated investee of $108.2 million. See ProLogis’ Consolidated Financial Statements contained in Item 8 of ProLogis’ Form 10-K for the year ended December 31, 2010 in for more information.
 
(3) Funds from operations (“FFO”) is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. Although the NAREIT has published a definition of FFO, modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business. FFO, as ProLogis defines it, is presented as a supplemental financial measure. FFO is not used by ProLogis as, nor should it be considered to be, an alternative to net earnings computed under GAAP as an indicator of the operating performance of ProLogis or as an alternative to cash from operating activities computed under GAAP as an indicator of the ability of ProLogis to fund its cash needs.

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FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor does ProLogis intend it to present, a complete picture of its financial condition and operating performance. ProLogis believes net earnings computed under GAAP remains the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings computed under GAAP. Further, ProLogis believes that its consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of its financial condition and operating performance.
 
At the same time that NAREIT created and defined its FFO concept for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” ProLogis believes that financial analysts, potential investors and shareholders who review the operating results of ProLogis are best served by a defined FFO measure that includes other adjustments to net earnings computed under GAAP in addition to those included in the NAREIT defined measure of FFO. The FFO measures of ProLogis are discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds From Operations” in its Annual Report on Form 10-K for its fiscal year ended December 31, 2010 which is incorporated into this joint proxy statement/prospectus by reference. See “Where You Can Find More Information.”


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SUMMARY UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
 
The following table shows summary unaudited pro forma combined condensed financial information about the combined financial condition and operating results after giving effect to the Merger. The unaudited pro forma combined condensed financial information assumes that the Merger is accounted for by applying the purchase method of accounting with ProLogis treated as the acquirer. The unaudited pro forma combined condensed balance sheet data gives effect to the Merger as if it had occurred on December 31, 2010. The unaudited pro forma combined condensed statement of operations data gives effect to the Merger as if it had become effective at January 1, 2010, based on the most recent valuation data available. The summary unaudited pro forma combined condensed financial information listed below has been derived from and should be read in conjunction with (i) the more detailed unaudited pro forma combined condensed financial information, including the notes thereto, appearing elsewhere in this joint proxy statement/prospectus and (ii) the consolidated financial statements and the related notes of both AMB and ProLogis contained in their respective Annual Reports on Form 10-K for the year ended December 31, 2010, all of which are incorporated by reference into this joint proxy statement/prospectus. See “Unaudited Pro Forma Combined Condensed Financial Information” and “Where You Can Find More Information:”
 
The unaudited pro forma combined condensed financial information is presented for illustrative purposes only and is not necessarily indicative of the combined operating results or financial position that would have occurred if such transactions had been consummated on the dates and in accordance with the assumptions described herein, nor is it necessarily indicative of the future operating results or financial position of the combined company. The unaudited pro forma combined condensed financial information does not give effect to (i) any potential revenue enhancements or cost synergies that could result from the Merger or (ii) any transaction or integration costs relating to the Merger. In addition, as explained in more detail in the accompanying notes to the unaudited pro forma combined condensed financial information, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma combined condensed financial information is subject to adjustment and may vary significantly from the definitive allocation of the final purchase price that will be recorded subsequent to completion of the Merger. The determination of the final purchase price will be based on the trading price of ProLogis common shares at closing.
 
         
    December 31, 2010
    (In millions, except
    per share amounts)
 
Operating Data:
       
Total revenues
  $ 1,536  
Operating loss
  $ (495 )
Loss from continuing operations
  $ (1,575 )
Loss from continuing operations attributable to common shares
  $ (1,621 )
Loss from continuing operations per share attributable to common shares:
       
Basic
  $ (3.89 )
Diluted
  $ (3.89 )
         
Balance Sheet Data:
       
Net investments in real estate
  $ 23,742  
Total assets
  $ 25,581  
Total debt
  $ 9,906  
ProLogis, Inc. shareholders’ equity
  $ 13,626  


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EQUIVALENT AND COMPARATIVE PER SHARE INFORMATION
 
The following table sets forth, for the year ended December 31, 2010, selected per share information for ProLogis common shares on a historical and pro forma combined basis and for AMB common stock on a historical and pro forma equivalent basis. You should read the table below together with the historical consolidated financial statements and related notes of AMB and ProLogis contained in their respective Annual Reports on Form 10-K for the year ended December 31, 2010, all of which are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
 
The ProLogis pro forma combined loss per share was calculated using the methodology as described below under the heading “Unaudited Pro Forma Combined Condensed Financial Information,” and are subject to all the assumptions, adjustments and limitations described thereunder. The pro forma financial information described below is presented as if the Merger occurred on January 1, 2010 for the results of operations and December 31, 2010 for financial position. As this is a reverse acquisition, the AMB pro forma equivalent per common share amounts were calculated by multiplying the ProLogis pro forma combined per share amounts by 40%, representing the approximate share of the combined company that will be owned by pre-Merger shareholders of AMB. You should not rely on the pro forma amounts as being indicative of the financial position or results of operations of the combined company that actually would have occurred had the Merger been completed as of the dates indicated above, nor is it necessarily indicative of the future operating results or financial position of the combined company.
 
                                 
    ProLogis   AMB
        Pro Forma
      Pro Forma
    Historical   Combined   Historical   Equivalent
 
Loss from continuing operations available to common share, per common share:
                               
Basic
  $ (3.27 )   $ (3.89 )   $ (0.08 )   $ (1.56 )
Diluted
  $ (3.27 )   $ (3.89 )   $ (0.08 )   $ (1.56 )
Dividends declared per common share
  $ 0.56     $ 0.56     $ 1.12     $ 0.22  
Book value per common share
  $ 12.55     $ 30.80     $ 18.36     $ 12.32  


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RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
 
The following table sets forth the ratio of earnings to combined fixed charges and preferred stock dividends of AMB for the periods indicated. The ratio of earnings to combined fixed charges and preferred stock dividends was computed by dividing the earnings of AMB by its combined fixed charges and preferred stock dividends. For purposes of calculating these ratios, “earnings” includes pretax income from continuing operations before extraordinary items, excluding the equity earnings in a less than 50% owned subsidiary, plus fixed charges and reduced by capitalized interest. “Fixed charges” consists of interest expensed and capitalized and the amortized premiums, discounts and capitalized expenses related to indebtedness.
 
                                         
    December 31,
    2010   2009   2008   2007   2006
    (Dollars in millions)
 
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends(1):
                      1.9       1.5  
 
 
(1) The consolidated ratio of earnings to combined fixed charges and preferred stock dividends was less than one-to-one for the years ended December 31, 2010, 2009 and 2008. For the years ended December 31, 2010, 2009 and 2008, earnings were insufficient to cover combined fixed charges and preferred stock dividends by $40.8 million, $183.1 million and $100.4 million, respectively.


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RISK FACTORS
 
In addition to the other information included and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risks before deciding how to vote. In addition, you should read and consider the risks associated with each of the businesses of AMB and ProLogis because these risks will also affect the combined company. These risks can be found in the respective Annual Reports on Form 10-K for the year ended December 31, 2010 of AMB and ProLogis, each of which is filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. You should also read and consider the other information in this joint proxy statement/prospectus and the other documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
 
Risk Factors Relating to the Merger
 
The exchange ratio is fixed and will not be adjusted in the event of any change in the stock prices of either AMB or ProLogis.
 
Upon the closing of the Merger, each ProLogis common share will be converted into the right to receive 0.4464 of a newly issued share of AMB common stock, with cash paid in lieu of fractional shares. The exchange ratio was fixed in the merger agreement, and while it will be adjusted in the event of a recapitalization, merger, subdivision, issuer tender or exchange offer or other similar transaction involving AMB or ProLogis, the exchange ratio will not be adjusted for changes in the market price of either AMB common stock or ProLogis common shares. Changes in the price of AMB common stock prior to the Merger will affect the market value of the merger consideration that ProLogis shareholders will receive on the closing date of the Merger. Stock price changes may result from a variety of factors (many of which are beyond our control), including the following factors:
 
  •  changes in our respective businesses, operations, assets, liabilities and prospects;
 
  •  changes in market assessments of the business, operations, financial position and prospects of either company;
 
  •  market assessments of the likelihood that the Merger will be completed, including related considerations regarding regulatory approvals of the Merger;
 
  •  interest rates, general market and economic conditions and other factors generally affecting the price of AMB common stock and ProLogis common shares; and
 
  •  federal, state and local legislation, governmental regulation and legal developments in the businesses in which ProLogis and AMB operate.
 
The price of AMB common stock at the closing of the Merger may vary from its price on the date the merger agreement was executed, on the date of this joint proxy statement/prospectus and on the date of the special meetings of AMB and ProLogis. As a result, the market value of the merger consideration represented by the exchange ratio will also vary. For example, based on the range of trading prices of AMB common stock during the period after January 26, 2011, the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies, through April 26, 2011, the latest practicable date before the date of this joint proxy statement/prospectus, the exchange ratio of 0.4464 represented a market value ranging from a low of $14.60 to a high of $16.42.
 
Because the Merger will be completed after the date of the special meetings, at the time of your special meeting, you will not know the exact market value of the AMB common stock that ProLogis shareholders will receive upon completion of the Merger. You should consider the following two risks:
 
  •  If the price of AMB common stock increases between the date the merger agreement was signed or the date of the AMB special meeting and the closing of the Merger, ProLogis shareholders will receive shares of AMB common stock that have a market value upon completion of the Merger that is greater than the market value of such shares calculated pursuant to the exchange ratio on the date the merger agreement was signed or on the date of the AMB special meeting, respectively.


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  •  If the price of AMB common stock declines between the date the merger agreement was signed or the date of the ProLogis special meeting and the closing of the Merger, including for any of the reasons described above, ProLogis shareholders will receive shares of AMB common stock that have a market value upon completion of the Merger that is less than the market value of such shares calculated pursuant to the exchange ratio on the date the merger agreement was signed or on the date of the ProLogis special meeting, respectively.
 
Therefore, while the number of shares of AMB common stock to be issued per ProLogis common share is fixed, ProLogis shareholders cannot be sure of the market value of the consideration they will receive upon completion of the Merger.
 
Failure to complete the Merger could negatively affect the stock prices and the future business and financial results of AMB and ProLogis.
 
If the Merger is not completed, the ongoing businesses of AMB or ProLogis may be adversely affected and AMB and ProLogis will be subject to numerous risks, including the following:
 
  •  AMB being required, under certain circumstances, to pay ProLogis a termination fee of $210 million and reimburse ProLogis for up to $20 million of its expenses in connection with the Merger;
 
  •  ProLogis being required, under certain circumstances, to pay AMB a termination fee of $315 million and reimburse AMB for up to $20 million of its expenses in connection with the Merger;
 
  •  each of AMB and ProLogis having to pay certain costs relating to the proposed Merger, such as legal, accounting, financial advisor, filing, printing and mailing fees; and
 
  •  the management of each of AMB and ProLogis focusing on the Merger instead of on pursuing other opportunities that could be beneficial to the companies, in each case, without realizing any of the benefits of having the Merger completed.
 
If the Merger is not completed, AMB and ProLogis cannot assure their shareholders that these risks will not materialize and will not materially affect the business, financial results and stock prices of AMB or ProLogis.
 
The merger agreement contains provisions that could discourage a potential acquirer of either AMB or ProLogis or could result in any acquisition proposal being at a lower price than it might otherwise be.
 
The merger agreement contains provisions that, subject to limited exceptions, restrict the ability of each of AMB and ProLogis to solicit, encourage, facilitate or discuss third-party proposals to acquire all or a significant part of AMB or ProLogis. Further, even if the AMB board of directors or ProLogis board of trustees withdraws or modifies its recommendation of the Topco merger or the Merger, respectively, they will still be required to submit the matter to a vote of their respective stockholders or shareholders at the special meetings. In addition, either AMB or ProLogis generally has an opportunity to offer to modify the terms of the proposed merger agreement in response to any acquisition proposal that may be made to the other party before the board of directors or board of trustees, as the case may be, may withdraw or modify its recommendation in response to such acquisition proposal. In some circumstances, on termination of the merger agreement, one of the parties may be required to pay a substantial termination fee to the other party. See “The Merger — Termination of the Merger Agreement.”
 
These provisions could discourage a potential acquirer that might have an interest in acquiring all or a significant part of AMB or ProLogis from considering or proposing such an acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than that market value proposed to be received or realized in the Merger, or might result in a potential acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the merger agreement.
 
The pendency of the Merger could adversely affect the business and operations of AMB and ProLogis.
 
In connection with the pending Merger, some customers or vendors of each of AMB and ProLogis may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of AMB and ProLogis, regardless of whether the Merger is completed. Similarly, current and prospective employees of AMB


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and ProLogis may experience uncertainty about their future roles with the combined company following the Merger, which may materially adversely affect the ability of each of AMB and ProLogis to attract and retain key personnel during the pendency of the Merger. In addition, due to operating covenants in the merger agreement, each of AMB and ProLogis may be unable, during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial.
 
Some of the directors and executive officers of AMB and trustees and executive officers of ProLogis have interests in seeing the Merger completed that are different from, or in addition to, those of the other AMB stockholders and ProLogis shareholders.
 
Some of the directors and executive officers of AMB and trustees and executive officers of ProLogis have arrangements that provide them with interests in the Merger that are different from, or in addition to, those of the stockholders of AMB or the shareholders of ProLogis. These interests include, among other things, the continued service as a director or an executive officer of the combined company and, in the case of AMB directors and executive officers, the opportunity to participate in the new non-qualified deferred compensation plan (which we refer to as the “new NQDC plan”) which is conditioned on the consummation of the Topco merger. These interests, among other things, may influence or may have influenced the directors and executive officers of AMB and trustees and executive officers of ProLogis to support or approve the Topco merger or Merger, respectively.
 
Risk Factors Relating to the Combined Company
 
Operational Risks
 
The combined company expects to incur substantial expenses related to the Merger.
 
The combined company expects to incur substantial expenses in connection with completing the Merger and integrating the business, operations, networks, systems, technologies, policies and procedures of the two companies. There are a large number of systems that must be integrated, including billing, management information, purchasing, accounting and finance, sales, payroll and benefits, fixed asset, lease administration and regulatory compliance. Although AMB and ProLogis have assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and integration expenses associated with the Merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses following the completion of the Merger. As a result of these expenses, both AMB and ProLogis expect to take charges against their earnings before and after the completion of the Merger. The charges taken in connection with the Merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.
 
Following the Merger, the combined company may be unable to integrate the businesses of AMB and ProLogis successfully and realize the anticipated synergies and related benefits of the Merger or do so within the anticipated timeframe.
 
The Merger involves the combination of two companies that currently operate as independent public companies. AMB and ProLogis expect that the transaction will generate $80 million of annual gross savings in general and administrative expenses, based on preliminary estimates of certain personnel and non-personnel reductions. The personnel cost reductions are estimated to be approximately $65 million and relate to anticipated reductions of certain positions at both AMB and ProLogis that are believed to be redundant for the combined company. The non-personnel cost reductions are estimated to be approximately $15 million and relate to duplicative corporate infrastructure and public company operating expenses. AMB and ProLogis expect to realize these savings on an annualized run-rate basis by December 31, 2012.


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However, the combined company will be required to devote significant management attention and resources to integrating the business practices and operations of AMB and ProLogis. Potential difficulties the combined company may encounter in the integration process include the following:
 
  •  the inability to successfully combine the businesses of AMB and ProLogis in a manner that permits the combined company to achieve the cost savings anticipated to result from the Merger, which would result in the anticipated benefits of the Merger not being realized in the timeframe currently anticipated or at all;
 
  •  lost sales and customers as a result of certain customers of either of the two companies deciding not to do business with the combined company;
 
  •  the complexities associated with managing the combined businesses out of several different locations and integrating personnel from the two companies;
 
  •  the additional complexities of combining two companies with different histories, cultures, regulatory restrictions, markets and customer bases;
 
  •  the failure to retain key employees of either of the two companies;
 
  •  potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger; and
 
  •  performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by completing the Merger and integrating the companies’ operations.
 
For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s products, services, standards, controls, procedures and policies, any of which could adversely affect the ability of the combined company to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the Merger, or could otherwise adversely affect the business and financial results of the combined company.
 
Following the Merger, the combined company may be unable to retain key employees.
 
The success of the combined company after the Merger will depend in part upon its ability to retain key AMB and ProLogis employees. Key employees may depart either before or after the Merger because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the Merger. Accordingly, no assurance can be given that AMB, ProLogis or, following the Merger, the combined company will be able to retain key employees to the same extent as in the past.
 
The Merger will result in changes to the board of directors and management of the combined company that may affect the strategy of the combined company as compared to that of AMB and ProLogis.
 
If the parties complete the Merger, the composition of the board of directors of the combined company and management team will change from the boards and management teams of AMB and ProLogis. The board of directors of the combined company will consist of 11 members, with five directors selected by the current board of directors of AMB and six directors selected by the current board of trustees of ProLogis. The combined company will also have executive officers from both AMB and ProLogis. This new composition of the board of directors and the management team of the combined company may affect the business strategy and operating decisions of the combined company upon the completion of the Merger.
 
The future results of the combined company will suffer if the combined company does not effectively manage its expanded operations following the Merger.
 
Following the Merger, the combined company may continue to expand its operations through additional acquisitions and other strategic transactions, some of which involve complex challenges. The future success of the combined company will depend, in part, upon the ability of the combined company to manage its expansion opportunities, which pose substantial challenges for the combined company to integrate new operations into its


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existing business in an efficient and timely manner, and upon its ability to successfully monitor its operations, costs, regulatory compliance and service quality, and to maintain other necessary internal controls. The combined company cannot assure you that its expansion or acquisition opportunities will be successful, or that the combined company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.
 
The trading price of shares of the common stock of the combined company may be affected by factors different from those affecting the price of shares of AMB common stock or ProLogis common shares before the Merger.
 
If the Merger is completed, ProLogis shareholders will become holders of approximately 60%, and AMB stockholders will hold approximately 40%, of the outstanding shares of common stock of the combined company. The results of operations of the combined company, as well as the trading price of the common stock of the combined company, after the Merger may be affected by factors different from those currently affecting AMB’s or ProLogis’ results of operations and the trading prices of AMB common stock and ProLogis common shares. These factors include:
 
  •  a greater number of shares of the combined company outstanding as compared to the number of currently outstanding shares of AMB;
 
  •  different stockholders;
 
  •  different businesses; and
 
  •  different assets and capitalizations.
 
Accordingly, the historical trading prices and financial results of AMB and ProLogis may not be indicative of these matters for the combined company after the Merger. For a discussion of the business of AMB and ProLogis and of certain factors to consider in connection with that business, see the documents incorporated by reference by AMB or ProLogis into this joint proxy statement/prospectus referred to under “Where You Can Find More Information.”
 
Regulatory and Legal Risks
 
Counterparties to certain significant agreements with AMB or ProLogis may exercise contractual rights under such agreements in connection with the Merger.
 
AMB and ProLogis are each party to certain agreements that give the counterparty certain rights following a “change in control,” including in some cases the right to terminate the agreement. Under some such agreements, the Merger will constitute a change in control and therefore the counterparty may exercise certain rights under the agreement upon the closing of the Merger. Certain AMB and ProLogis funds, joint ventures, management and servicing contracts, leases and debt obligations have agreements subject to such provisions. Any such counterparty may request modifications of their respective agreements as a condition to granting a waiver or consent under their agreement. There is no assurance that such counterparties will not exercise their rights under the agreements, including termination rights where available, that the exercise of any such rights will not result in a material adverse effect or that any modifications of such agreements will not result in a material adverse effect.
 
In connection with the announcement of the merger agreement, several lawsuits have been filed and are pending, seeking, among other things, to enjoin the Merger and rescind the merger agreement, and an adverse judgment in any of the lawsuits may prevent the Merger from being effective or from becoming effective within the expected timeframe.
 
ProLogis, the members of the ProLogis board of trustees, New Pumpkin, Upper Pumpkin, Pumpkin LLC, AMB and AMP LP, have each been named as defendants in several lawsuits brought by holders of ProLogis common shares challenging the Merger, and seeking, among other things, to enjoin the Merger, direct the defendants to exercise their fiduciary duties, rescind the merger agreement, and award the plaintiffs damages and expenses. If the plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Merger on the agreed upon terms, the injunction may prevent the completion of the Merger in the expected timeframe (if at all). For more information about litigation related to the Merger, including the agreements in principle with respect to the proposed settlement of the litigation, see “The Merger — Litigation Relating to the Merger.”


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REIT Risks
 
The combined company would succeed to, and may incur, adverse tax consequences if AMB or ProLogis has failed or fails to qualify as a REIT for U.S. federal income tax purposes.
 
If either AMB or ProLogis has failed or fails to qualify as a REIT for U.S. federal income tax purposes and the Merger is completed, the combined company generally would succeed to and may incur significant tax liabilities, and the combined company could possibly lose its REIT status should disqualifying activities continue after the Merger.
 
REITs are subject to a range of complex organizational and operational requirements.
 
As REITs, each of AMB and ProLogis must distribute with respect to each year at least 90% of its REIT taxable income to its stockholders or shareholders, as applicable. Other restrictions apply to a REIT’s income and assets. For any taxable year that AMB or ProLogis fails to qualify as a REIT, it will not be allowed a deduction for dividends paid to its stockholders or shareholders, as applicable, in computing taxable income and thus would become subject to U.S. federal and state income tax as if it were a regular taxable corporation. In such an event, AMB or ProLogis, as the case may be, could be subject to potentially significant tax liabilities. Unless entitled to relief under certain statutory provisions, AMB or ProLogis, as the case may be, would also be disqualified from treatment as a REIT for the four taxable years following the year in which it lost its qualification. If AMB or ProLogis failed to qualify as a REIT, the market price of the common stock of the combined company may decline and the combined company may need to reduce substantially the amount of distributions to its stockholders because of its increased tax liability.
 
Other Risks
 
In connection with the Merger, the combined company is planning to refinance a significant amount of indebtedness, and cannot guarantee that it will be able to obtain the necessary funds on favorable terms or at all.
 
The closing of the Merger may trigger termination of each of AMB’s and ProLogis’ respective credit agreements and the mandatory prepayment of the amounts outstanding thereunder, and the mandatory prepayment of certain secured mortgage debt of AMB, ProLogis or their affiliates. AMB and ProLogis are engaged in discussions with certain potential financing providers regarding one or more bank credit facilities to be entered into by the combined company at the time of the closing of the Merger, funds from which would be used in part to make such mandatory prepayments and to provide a source of liquidity for the combined company. However, the combined company’s ability to obtain such financing will depend on, among other factors, prevailing market conditions at the time of the closing of the Merger and other factors beyond the control of the combined company. AMB and ProLogis cannot assure you that the combined company will be able to obtain additional financing on terms acceptable to the combined company or at all. Completion of the Merger is not conditioned on completing such financing transactions.
 
If the combined company is unable to obtain such financing, or is unable to do so on terms acceptable to the combined company, the combined company or, prior to the closing of the Merger, AMB and ProLogis, may seek to obtain waivers or amendments of the mandatory prepayment provisions under the terms of AMB and ProLogis’ respective bank credit facilities. ProLogis sought and obtained a waiver of the termination and mandatory prepayment provisions of its bank credit facility with respect to the effect of the signing of the merger agreement, but such waiver does not extend to the termination and prepayment provisions which would be triggered by the closing of the Merger. In addition, AMB and ProLogis have sought certain consents related to mandatory prepayments of secured mortgage debt of the parties which may be triggered by the closing of the Merger. As of the date hereof, substantially all of the consents related to such mortgage debt requested by AMB have been received. ProLogis has delivered its requests for consents and waivers required under such mortgage debt, which has an aggregate principal amount of approximately $407 million (and could require the payment of associated prepayment penalties of approximately $45 million), and is awaiting responses to such requests. AMB and ProLogis cannot assure you that any further consents or waivers will be obtained if sought, or that the combined company will have sufficient funds available to make such mandatory prepayments if necessary.


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The combined company will have a substantial amount of indebtedness and may need to incur more in the future.
 
The combined company will have substantial indebtedness. For example, as of December 31, 2010, the combined company would have had an estimated fixed charge coverage ratio of 2.5x and an estimated debt as a percentage of total market capitalization of 41.3% (by comparison, as of that date, the standalone figures for AMB were 2.6x and 37.2%, respectively, and for ProLogis were 2.3x and 42.9%, respectively). In addition, in connection with executing the combined company’s business strategies following the Merger, the combined company expects to continue to evaluate the possibility of acquiring additional properties and making strategic investments, and the combined company may elect to finance these endeavors by incurring additional indebtedness. Its substantial indebtedness could have material adverse consequences for the combined company, including (i) reducing the combined company’s credit ratings and thereby raising its borrowing costs, (ii) hindering the combined company’s ability to adjust to changing market, industry or economic conditions, (iii) limiting the combined company’s ability to access the capital markets to refinance maturing debt or to fund acquisitions or emerging businesses, (iv) limiting the amount of free cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses, (v) making the combined company more vulnerable to economic or industry downturns, including interest rate increases and (vi) placing the combined company at a competitive disadvantage compared to less leveraged competitors.
 
Moreover, to respond to competitive challenges, the combined company may be required to raise substantial additional capital to execute its business strategy. The combined company’s ability to arrange additional financing will depend on, among other factors, the combined company’s financial position and performance, as well as prevailing market conditions and other factors beyond the combined company’s control. If the combined company is able to obtain additional financing, the combined company’s credit ratings could be further adversely affected, which could further raise the combined company’s borrowing costs and further limit its future access to capital and its ability to satisfy its obligations under its indebtedness.
 
The historical and unaudited pro forma combined condensed financial information included elsewhere in this joint proxy statement/prospectus may not be representative of the combined company’s results after the Merger, and accordingly, you have limited financial information on which to evaluate the combined company.
 
The unaudited pro forma combined condensed financial information included elsewhere in this joint proxy statement/prospectus has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Merger been completed as of the date indicated, nor is it indicative of the future operating results or financial position of the combined company. The unaudited pro forma combined condensed financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to AMB’s assets and liabilities. The purchase price allocation reflected in the unaudited pro forma combined condensed financial information included elsewhere in this joint proxy statement/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of AMB as of the date of the completion of the Merger. The unaudited pro forma combined condensed financial information does not reflect future events that may occur after the Merger, including the costs related to the planned integration of the two companies and any future nonrecurring charges resulting from the Merger, and does not consider potential impacts of current market conditions on revenues or expense efficiencies. The unaudited pro forma combined condensed financial information presented elsewhere in this joint proxy statement/prospectus is based in part on certain assumptions regarding the Merger that AMB and ProLogis believe are reasonable under the circumstances. AMB and ProLogis cannot assure you that the assumptions will prove to be accurate over time.
 
AMB and ProLogis face other risks.
 
The risks listed above are not exhaustive, and you should be aware that, following the Merger, the combined company will face various other risks, including those discussed in reports filed by AMB and ProLogis with the SEC. See “Where You Can Find More Information.”


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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
This joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which AMB and ProLogis operate and beliefs of and assumptions made by AMB management and ProLogis management , involve uncertainties that could significantly affect the financial results of AMB or ProLogis or the combined company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving AMB and ProLogis, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to rent and occupancy growth, development activity and changes in sales or contribution volume of developed properties, general conditions in the geographic areas where we operate and the availability of capital in existing or new property funds — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to, those set forth under “Risk Factors” as well as the following:
 
  •  national, international, regional and local economic climates,
 
  •  changes in financial markets, interest rates and foreign currency exchange rates,
 
  •  increased or unanticipated competition for our properties,
 
  •  risks associated with acquisitions,
 
  •  maintenance of REIT status,
 
  •  availability of financing and capital,
 
  •  changes in demand for developed properties,
 
  •  risks associated with achieving expected revenue synergies or cost savings,
 
  •  risks associated with the ability to consummate the merger and the timing of the closing of the merger, and
 
  •  those additional risks and factors discussed in reports filed with the Securities and Exchange Commission (which we refer to as the “SEC”) by AMB and ProLogis from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q.
 
Neither AMB nor ProLogis undertakes any duty to update any forward-looking statements appearing in this document, except as may be required by applicable securities laws.


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INFORMATION ABOUT THE COMPANIES
 
AMB Property Corporation
 
Pier 1, Bay 1
San Francisco, California 94111
(415) 394-9000
 
AMB, together with its subsidiaries, is a global owner, operator and developer of industrial real estate, focused on major hub and gateway distribution markets in the Americas, Europe and Asia. As of December 31, 2010, AMB owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 159.6 million square feet (14.8 million square meters) in 49 markets within 15 countries.
 
The business of AMB is operated primarily through its operating partnership, AMB LP. As of December 31, 2010, AMB owned an approximate 98.2% general partnership interest in the operating partnership, excluding preferred units. As the sole general partner of AMB LP, AMB has the full, exclusive and complete responsibility for and discretion in its day-to-day management and control. AMB LP holds substantially all of the assets of AMB and directly or indirectly holds the ownership interests in AMB’s joint ventures.
 
AMB, a Maryland corporation, is a self-administered and self-managed REIT, and it expects that it has qualified, and will continue to qualify, as a REIT for U.S. federal income tax purposes beginning with the year ended December 31, 1997. As a self-administered and self-managed REIT, the employees of AMB perform its corporate, administrative and management functions, rather than the company relying on an outside manager for these services. AMB believes that real estate is fundamentally a local business and is best operated by local teams in each of its markets. As a vertically integrated company, AMB actively manages its portfolio of properties. In select markets, AMB may, from time to time, establish relationships with third-party real estate management firms, brokers and developers that provide some property-level administrative and management services under the company’s direction.
 
AMB was incorporated in the state of Maryland in 1997, and AMB LP was formed in the state of Delaware in 1997. AMB common stock is listed on the NYSE, trading under the symbol “AMB.” The primary office of AMB is located in San Francisco, California.
 
Additional information about AMB and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
 
ProLogis
 
4545 Airport Way
Denver, Colorado 80239
(303) 567-5000
 
ProLogis is a leading global provider of industrial distribution facilities. ProLogis is organized as a Maryland real estate investment trust and has elected to be taxed as a REIT under the Code. The world headquarters of ProLogis are located in Denver, Colorado. The European headquarters of ProLogis are located in the Grand Duchy of Luxembourg with its European customer service headquarters located in Amsterdam, the Netherlands. The primary office of ProLogis in Asia is located in Tokyo, Japan.
 
ProLogis was formed in 1991, primarily as a long-term owner of industrial distribution space operating in the United States. Over time, the business strategy of ProLogis evolved to include the development of properties for contribution to property funds in which ProLogis maintains an ownership interest and the management of those property funds and the properties they own. Originally, ProLogis sought to differentiate itself from its competition by focusing on the distribution space requirements of its corporate customers on a national, regional and local basis and providing customers with consistent levels of service throughout the United States. However, as the needs of its customers expanded to markets outside the United States, so did the portfolio and management team of ProLogis.


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Today, ProLogis is an international real estate company with operations in North America, Europe and Asia. The business strategy of ProLogis is to integrate international scope and expertise with a strong local presence in its markets, thereby becoming an attractive choice for its targeted customer base, the largest global users of distribution space, while achieving long-term sustainable growth in cash flow.
 
ProLogis common stock is listed on the NYSE, trading under the symbol “PLD.”
 
New Pumpkin Inc., a Maryland corporation, Upper Pumpkin LLC, a Delaware limited liability company, and Pumpkin LLC, a Delaware limited liability company, are direct and indirect, wholly owned subsidiaries of ProLogis and were formed in January 2011 for the purpose of effecting the Merger.
 
Additional information about ProLogis and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
 
The Combined Company
 
     Corporate Headquarters:
 
     Pier 1, Bay 1
     San Francisco, California 94111
     (415) 394-9000
 
     Operational Headquarters:
 
     4545 Airport Way
     Denver, Colorado 80239
     (303) 567-5000
 
The combined company will be named “ProLogis, Inc.” and will be a Maryland corporation that is a self-administered and self-managed REIT for U.S. federal income tax purposes. The combined company is expected to be a leading global owner, operator and developer of industrial real estate. The combined company is expected to have a pro forma equity market capitalization of approximately $14 billion, a total market capitalization in excess of $24 billion, and gross assets owned and managed of approximately $46 billion. The combined company will own or manage approximately 600 million square feet (approximately 55 million square meters) of modern distribution facilities located in key gateway markets and logistics corridors in 22 countries.
 
References to the “combined company” in this document shall be to AMB Property Corporation after the effective time of the Merger, which will be renamed as “ProLogis, Inc.”
 
The business of the combined company will be operated through an operating partnership, ProLogis, L.P. On a pro forma basis giving effect to the Merger, the combined company will own an approximate 99.3% general partnership interest in the operating partnership, excluding preferred units, and, as its sole general partner, the combined company will have the full, exclusive and complete responsibility for and discretion in the day-to-day management and control of the operating partnership.
 
The common stock of the combined company will be listed on the NYSE, trading under the symbol “PLD.”


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THE MERGER
 
The following is a discussion of the Merger and the material terms of the merger agreement between AMB and ProLogis. You are urged to read the merger agreement carefully and in its entirety, a copy of which is attached as Annex A to this joint proxy statement/prospectus and incorporated by reference herein.
 
Background of the Merger
 
The boards and management teams of AMB and ProLogis have periodically and in the ordinary course evaluated and considered a variety of financial and strategic opportunities as a part of their respective long-term strategies to maximize shareholder value. In 2001 and 2005, members of the management teams of AMB and ProLogis engaged in preliminary discussions regarding a potential strategic business combination between the two companies, but these prior discussions never resulted in any agreement regarding a potential combination and the discussions were terminated.
 
Throughout 2009 and early 2010, AMB management discussed with the AMB board of directors a variety of potential strategic growth opportunities that they believed might be available at attractive prices, in part due to the continuing effects of the financial crisis and resulting market disruptions. In addition, AMB management discussed with the AMB board of directors a possible merger with ProLogis. During 2010, ProLogis management had several strategic discussions with the ProLogis board of trustees regarding the future growth in its fund management business and international expansion, including the possible reentry into China and expansion into Brazil. In addition, ProLogis management discussed with the ProLogis board of trustees the need to continue to strengthen ProLogis’ balance sheet in the months and years ahead.
 
In May 2010, a large private equity firm, which we refer to as “Company A,” approached ProLogis management regarding a potential transaction involving ProLogis. The parties engaged in various discussions involving the net asset value and future growth potential of ProLogis and ProLogis management kept the board of trustees apprised of the status of such discussions. Despite such discussions, the parties did not discuss any specific terms of a possible transaction nor did Company A make any proposal regarding a possible transaction involving ProLogis.
 
In September 2010, Company A again approached ProLogis management and expressed interest in a transaction involving a potential acquisition of ProLogis. Management informed the ProLogis board of trustees as to such expression of interest and, in light of previous discussions with Company A, ProLogis management stated that if Company A put forth a specific proposal regarding an acquisition or other transaction, ProLogis could evaluate whether to enter into a confidentiality agreement and provide further information on ProLogis to Company A. In mid-October 2010, after numerous follow-up conversations between members of management of ProLogis and Company A, Company A informed ProLogis that it did not believe that it could provide an acquisition proposal that it would expect to be acceptable to ProLogis based upon, among other things, the increase in the trading price of ProLogis common shares, ProLogis’ significant land holdings and limitations on Company A’s ability to place substantial additional debt on ProLogis as a result of covenants under ProLogis’ indenture.
 
In September 2010, Mr. Eugene F. Reilly, President, The Americas for AMB, and Mr. Ted R. Antenucci, President and Chief Investment Officer of ProLogis, had discussions regarding how Mr. Hamid R. Moghadam, Chairman and Chief Executive Officer of AMB, could approach Mr. Walter C. Rakowich, Chief Executive Officer of ProLogis, to initiate a discussion regarding a possible merger.
 
Following a meeting of the AMB board of directors in September 2010, Mr. Moghadam initiated an informal discussion with Mr. William E. Sullivan, Chief Financial Officer of ProLogis, at an event organized by Morgan Stanley to discuss whether ProLogis management would be receptive to engage in discussions regarding a possible business combination between AMB and ProLogis. Mr. Sullivan informed Mr. Moghadam that ProLogis was currently occupied with pursuing certain transactions which he could not discuss, and that ProLogis management may have greater availability to engage in such discussions following the completion of such transactions. At that time, ProLogis was nearing an announcement of a sale of a portfolio of industrial assets and in substantive discussions with a potential buyer of a portfolio of non-core retail and mixed-use assets.


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In early November 2010, Mr. Moghadam called Mr. Rakowich to determine whether they could meet to discuss a potential business combination between the two companies. Mr. Rakowich agreed to meet with Mr. Moghadam and, prior to the meeting, informed the ProLogis board of trustees of such meeting. Messrs. Moghadam and Rakowich met on November 6, 2010 following a conference hosted by J.P. Morgan in Napa Valley, California that they both attended. During this meeting, Messrs. Moghadam and Rakowich had informal discussions about their respective companies, their preliminary views of the rationale for a strategic business combination of AMB and ProLogis, and governance and operational issues that would need to be addressed in connection with such a combination, including issues relating to selecting the management team of the combined company, related succession planning issues, the name of the combined company, and the location of the headquarters of the combined company.
 
On November 10, 2010, Mr. Rakowich convened a telephonic meeting of the board of trustees of ProLogis at which he informed the board of trustees of his discussions with Mr. Moghadam. The ProLogis board discussed some of the issues that would need to be addressed in a possible business combination and determined that it should engage Morgan Stanley to act as its financial advisor and to prepare financial analyses for its upcoming board meeting in December.
 
During the remainder of November 2010, Messrs. Moghadam and Rakowich had further informal discussions by phone regarding a potential strategic business combination of the two companies. During these discussions, Messrs. Moghadam and Rakowich acknowledged that governance and operational issues, including the selection of the management team of the combined company and the determination of where the headquarters of the combined company would be located, would need to be resolved in a manner satisfactory to both parties in order to enable continuity of management and an effective and timely integration of the two companies’ operations and to otherwise achieve the financial and strategic benefits of a business combination. During this period Mr. Moghadam updated Jeffrey L. Skelton, the lead outside director of AMB, on the status of his discussions with ProLogis, and Mr. Skelton in turn updated other members of the AMB board of directors.
 
On November 29, 2010, the ProLogis board of trustees held a telephonic meeting at which Mr. Rakowich summarized the status of the current discussions with AMB. Representatives of Mayer Brown LLP and Greenberg Traurig, LLP, legal counsel to ProLogis, also participated in this meeting and discussed with the ProLogis board their duties as trustees in considering a potential business combination transaction.
 
On December 6 and 7, 2010, the ProLogis board held a regularly scheduled board meeting at which Mr. Rakowich again discussed the potential combination of ProLogis and AMB. A representative of Morgan Stanley attended part of this meeting and provided a preliminary financial overview of such a potential business combination. The ProLogis board of trustees discussed the financial and strategic benefits of a potential transaction, as well as several issues that would need to be addressed to the satisfaction of the board, including governance of the combined company, operational structuring, achievement of synergies and integration. The ProLogis board authorized Mr. Rakowich to continue preliminary discussions regarding a potential business combination with a view toward whether the issues discussed at the meeting could be resolved and requested that Mr. Rakowich continue to keep the ProLogis board of trustees apprised of any such discussions.
 
On December 9, 2010, Mr. Moghadam updated the AMB board of directors about his discussions with Mr. Rakowich. The AMB board of directors expressed its support of senior management in continuing to engage in preliminary discussions with members of ProLogis management regarding such potential strategic combination. Later that day, Mr. Rakowich called Mr. Moghadam to continue their discussion of a potential business combination.
 
On December 10, 2010, Mr. Moghadam met Mr. Irving F. Lyons, a member of the ProLogis board of trustees, for a previously scheduled breakfast in San Francisco. During the breakfast and afterward during a visit to AMB’s offices, Messrs. Moghadam and Lyons discussed the strategic business rationale for the proposed combination of AMB and ProLogis.
 
On December 11 and 12, 2010, Messrs. Rakowich and Lyons and Messrs. Moghadam and Lyons had a series of conversations regarding potential alternatives to address the issues of a combined company’s governance and operational structure, including the composition of the initial management team, management succession planning, the composition of the board of directors, the location of the headquarters of the combined company and the name of


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the combined company. On December 13, 2010, Mr. Rakowich had a further conversation with Mr. Moghadam focusing on these issues.
 
On December 15, 2010, the ProLogis board of trustees met telephonically and Messrs. Rakowich and Lyons reported on their recent discussions with Mr. Moghadam. Mr. Rakowich recommended to the ProLogis board that he and Mr. Lyons have an in-person meeting with Mr. Moghadam to determine whether and on what terms the governance and operational issues could be resolved. The ProLogis board of trustees expressed its support for these discussions.
 
On December 16, 2010, Messrs. Rakowich and Lyons met with Mr. Moghadam in San Francisco to continue to discuss the terms of a potential business combination, including the governance arrangements and the operational structure of the combined company.
 
From December 17 to December 20, 2010, Messrs. Rakowich and Moghadam continued to engage in communications regarding terms for a potential business combination. A preliminary understanding was reached in the course of these communications that any transaction would be a “merger of equals,” that the exchange ratio would be determined on an “at-the-market” basis (i.e., based on the relative market prices of shares of AMB and ProLogis, although Messrs. Rakowich and Moghadam did not discuss any specific figures for the exchange ratio at that time), that the board of the combined company would consist of a majority of persons nominated by ProLogis, that Messrs. Moghadam and Rakowich would share the position of chief executive officer of the combined company with Mr. Rakowich stepping down from such role at some future date, that the corporate headquarters would be located in San Francisco and the operational headquarters would be located in Denver and that the combined company would operate under the ProLogis name. Messrs. Moghadam and Rakowich acknowledged that any preliminary understanding between them would be subject to the approval of the boards of AMB and ProLogis following further due diligence and an exploration of the remaining terms of a strategic business combination transaction.
 
On December 22, 2010, the AMB board of directors had a telephonic meeting with members of senior management, representatives of J.P. Morgan, who had been invited the previous day to participate in the meeting as AMB’s financial advisor in connection with a potential transaction, and representatives of Wachtell, Lipton, Rosen & Katz, AMB’s legal advisor in connection with a potential transaction. Mr. Moghadam reported to the AMB board of directors on the progress of discussions with ProLogis about a potential strategic business combination, including his preliminary understanding with Mr. Rakowich on the form of transaction, governance arrangements and name of the combined company. The AMB board of directors then discussed with Mr. Moghadam and AMB’s advisors open issues with respect to the transaction. J.P. Morgan and Wachtell Lipton discussed with the AMB board that the potential business combination was proposed to be structured as a “merger of equals” and engaged in discussion with the AMB board on the features of a “merger of equals” transaction. Following discussion by the AMB board with senior management and AMB’s advisors, the AMB board expressed its support for management and AMB’s advisors to continue to explore a strategic business combination transaction, and, in the event further progress was made in the negotiations, engaging with ProLogis in a mutual due diligence review process.
 
On December 22, 2010, the ProLogis board of trustees had a telephonic meeting with members of the senior management of ProLogis and representatives of Greenberg Traurig, LLP and Mayer Brown LLP. Mr. Rakowich summarized the discussions with Mr. Moghadam regarding a potential business combination of ProLogis and AMB and explained the business rationale for such a transaction. Mr. Rakowich described the proposed structure of the transaction as a “merger of equals” and described the other aspects of the proposed transaction. The ProLogis board of trustees discussed with Mr. Rakowich the business rationale for such a transaction and the potential impact of such a transaction on ProLogis. Mr. Rakowich further discussed with the ProLogis board of trustees open issues with respect to the transaction. Following such discussion, the ProLogis board of trustees confirmed its support for management to continue discussions with AMB regarding a “merger of equals” and, if further progress was made in such discussions, to provide an updated financial analysis of such a transaction for the board’s consideration. In the event that the discussions with AMB did not result in the pursuit of a merger with AMB, the ProLogis board of trustees did not intend for ProLogis to pursue other business combinations and was prepared to have ProLogis continue as a stand-alone company.
 
From December 28, 2010 through December 31, 2010, Messrs. Moghadam and Rakowich had a series of conversations to discuss the management structure of the combined company. During this period, representatives of the two companies discussed potential timing for negotiating and signing a merger agreement, and continued negotiations over governance arrangements, transaction structure and the business plan of a combined company, and engaged in due diligence reviews of the other party’s publicly available information.


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On December 31, 2010, AMB and ProLogis, with the assistance of their advisors, entered into a confidentiality agreement that included mutual standstill and confidentiality restrictions.
 
On January 5, 2011, Mr. Rakowich, together with Mr. Sullivan and Mr. Edward S. Nekritz, General Counsel of ProLogis, met with Mr. Moghadam, Mr. Thomas S. Olinger, Chief Financial Officer of AMB, Ms. Tamra D. Browne, General Counsel of AMB, and Ms. Nancy Hemmenway, Senior Vice President, Human Resources of AMB, in San Francisco to discuss the various business functions of the combined company that would be located in Denver and San Francisco, and to discuss the strategy and operations of the combined company, as well as the integration of the AMB and ProLogis businesses.
 
On January 6, 2011, the ProLogis board of trustees met in San Francisco with Messrs. Sullivan, Antenucci and Nekritz, representatives of Morgan Stanley and representatives of Mayer Brown LLP and Greenberg Traurig, LLP in connection with the potential transaction. Mr. Rakowich reviewed the background of the negotiations with AMB and provided an update of the negotiations since the December 22 meeting of the ProLogis board of trustees. Mr. Rakowich described the current proposal for governance and management structure and succession and the various functions of the combined company, with a corporate headquarters located in San Francisco and an operational headquarters located in Denver. Representatives of Morgan Stanley then provided an updated financial analysis to the ProLogis board of trustees of the proposed transaction, including potential cost savings and other financial and operational synergies that could result from such a transaction based on the financial projections and cost-savings estimates provided by the management of ProLogis and AMB. The ProLogis board of trustees discussed the combined company’s cost of capital and strategies for growth, and the impact of the potential business combination on customers of ProLogis as well as its employees. The board also discussed the terms and conditions under which Mr. Rakowich might continue his role as chief executive officer of ProLogis and, in the event that an agreement was reached with respect to a transaction, the combined company. After further discussion with the members of senior management of ProLogis and the financial and legal advisors of ProLogis, the ProLogis board of trustees authorized ProLogis management to continue discussions with AMB regarding a business combination transaction consistent with the terms described to the ProLogis board of trustees.
 
From January 6 to January 11, 2011, the two companies, with the assistance of their advisors, continued to negotiate governance arrangements (including the composition of the initial management team, management succession planning, the composition and committee structure of the board of directors, and the provisions of the combined company’s charter and bylaws), potential transaction structures, proposed transaction terms, and the business plan of a combined company.
 
On January 9, 2011, members of AMB management, including Messrs. Moghadam and Olinger, Mmes. Browne and Hemmenway, members of ProLogis management, including Messrs. Rakowich, Sullivan and Nekritz, and their respective legal and financial advisors met in Denver, Colorado to discuss the proposed structure of a potential business combination and to negotiate terms of the transaction. The participants in the discussions agreed that the business combination should be structured in a manner that achieves the greatest operational, tax and accounting efficiencies, regardless of which legal entities survived as a technical matter. In particular, both parties acknowledged the importance of the combined company operating under an UPREIT structure and structuring the transaction in an efficient manner to accomplish that goal. The discussions focused on a three-step transaction in which ProLogis would be reorganized into an UPREIT structure with a newly formed subsidiary of ProLogis as the new holding company and ProLogis as an indirect subsidiary of the new holding company, the subsequent merger of the new holding company into AMB, with AMB changing its name to “ProLogis Inc.”, and the subsequent contribution of ProLogis to AMB’s operating partnership.
 
On January 12, 2011, the AMB board of directors met with AMB senior management and AMB’s outside legal and financial advisors. Mr. Moghadam, J.P. Morgan and Wachtell Lipton updated the AMB board on the status of negotiations with ProLogis. J.P. Morgan then reviewed and discussed with the AMB board financial information regarding ProLogis, AMB and the transaction. Wachtell Lipton and members of management then reviewed and discussed with the AMB board the proposed terms of a business combination.
 
Over the course of the next week, AMB and ProLogis and their respective advisors continued to work to negotiate terms for a potential business combination, including the negotiation of transaction documentation. During this time, Messrs. Moghadam and Rakowich came to a preliminary understanding that Mr. Rakowich would


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serve as co-chief executive officer and board member of the combined company until December 31, 2012. On January 15, 2011, each of ProLogis and AMB opened its electronic data room to the other party, and the parties and their advisors commenced due diligence review of the information made available.
 
On January 16, 2011, Mr. Moghadam, Ms. Hemmenway, Mr. Guy P. Jaquier, President Europe and Asia and President, Private Capital of AMB, and Mr. Reilly, met in Denver with Messrs. Rakowich and Nekritz, Mr. Gary E. Anderson, Head of Global Operations and Investment Management of ProLogis, and Mr. Michael S. Curless, Managing Director of Global Capital Deployment of ProLogis. The parties engaged in detailed discussions of various matters that would be important to the strategic success of the potential transaction, including the operational structure and roles of the proposed members of the management team of the combined company as well as other personnel of the combined company. Additional meetings were held by Messrs. Sullivan and Olinger in Denver on January 16, 2011 to engage in a detailed discussion and negotiation of the integration of many of the corporate functions.
 
On January 16, 2011, an initial draft of a merger agreement was distributed by Wachtell Lipton to ProLogis and its legal advisors. Over the course of the next two weeks, AMB and ProLogis and their respective legal and financial advisors continued to negotiate the merger agreement and other transaction documentation and to conduct their financial and legal due diligence reviews. The parties and their advisors also discussed both governmental and third-party approvals and consents that would be required in connection with a business combination, and continued their analysis of the integration of the two companies and the potential synergies from the combination.
 
On January 20, 2011, the AMB board of directors received an update from AMB senior management and AMB’s outside advisors about the progress of the discussions between AMB and ProLogis. Senior management and AMB’s outside advisors also discussed the potential benefits and risks of the proposed transaction at this meeting. Later that evening, at the invitation of the ProLogis board of trustees, Messrs. Moghadam, Jaquier, Olinger and Reilly and Ms. Hemmenway met the ProLogis board of trustees and Messrs. Nekritz and Antenucci for dinner in San Francisco to introduce themselves and to discuss some of the rationales for the business combination.
 
On January 21, 2011, the ProLogis board of trustees met with members of senior management of ProLogis and their financial and legal advisors. Representatives of Morgan Stanley provided a detailed review and update to the ProLogis board of trustees on the status of its financial due diligence services, including its review of potential G&A, financial and operational synergies. The representatives from Morgan Stanley also presented an analysis of exchange ratio considerations. Morgan Stanley then reviewed the financial structure and benefits of a combined company. Legal representatives from Greenberg Traurig, LLP and Mayer Brown LLP then provided the ProLogis board of trustees with a summary of the structure of the transaction and the proposed terms of the merger agreement. At the conclusion of the meeting, the ProLogis board of trustees expressed its support for continuing to pursue the potential business combination and requested that management continue its work as to the achievement of the potential G&A, financial and operational synergies from the proposed business combination. The board also considered the terms and conditions upon which members of ProLogis management and ProLogis employees would be offered continuing employment with the combined company and appropriate retention and severance arrangements. At the invitation of the ProLogis board of trustees, Mr. Moghadam also joined the meeting to present his views on the strategic priorities of the combined company.
 
During the afternoon of January 21, 2011 and during the course of the day on January 22, 2011, Messrs. Rakowich and Moghadam and other members of the senior management teams of ProLogis and AMB continued to meet in San Francisco to discuss in detail specific means for the achievement of cost and financial synergies from the proposed business combination as well as the integration of the two companies and specific roles of personnel of both companies.
 
On the evening of January 22, 2011, Messrs. Moghadam and Rakowich came to a preliminary understanding with respect to the exchange ratio that they would present to their respective boards. They had previously discussed proceeding on the basis of an “at-the-market” exchange ratio, and, after examining the market prices of AMB common stock and ProLogis common shares over various time periods and reviewing whether those prices were consistent with each company’s internal estimates of value, they agreed to present to their respective boards an exchange ratio of 0.4464.


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On January 26, 2011, following published reports of a potential transaction between AMB and ProLogis by various media outlets, including the Wall Street Journal, members of AMB management, members of ProLogis management and its board of trustees and their respective legal and financial advisors held discussions as to how the parties would respond to the publications. AMB and ProLogis agreed that each company would publish a press release stating that AMB and ProLogis were engaged in discussions regarding a potential merger of equals, in which the two companies would combine in an all-stock, at-market transaction, based upon the unaffected trading prices of the two companies’ stock prior to media reports of a possible merger. Each press release further noted that it was not certain if or when a definitive agreement would be reached.
 
On January 28 and 29, 2011, members of AMB management, members of ProLogis management, and their respective legal and financial advisors met at the offices of Wachtell Lipton to finalize negotiation of the merger agreement and other transaction documentation, including employment arrangements.
 
On January 29, 2011, the directors and trustees, respectively, of AMB and ProLogis came to New York City for a joint board dinner at the offices of J.P. Morgan.
 
On January 30, 2011, the AMB board of directors met to consider the proposed strategic business combination of AMB and ProLogis. At this meeting, AMB management, Wachtell Lipton and J.P. Morgan provided an update to the AMB board on the negotiation of the proposed transaction and the results of the due diligence review of ProLogis, and reviewed the strategic rationale and the anticipated benefits of the proposed transaction to AMB stockholders. Representatives of J.P. Morgan then reviewed with the AMB board the financial terms of the proposed transaction and presented J.P. Morgan’s financial analysis of the proposed Topco merger. After further discussion with the AMB board, J.P. Morgan then delivered to the AMB board its oral opinion (as subsequently confirmed in writing in an opinion dated January 30, 2011), as described under “— Opinion of AMB’s Financial Advisor,” that, as of the date of that opinion and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth in its opinion, the exchange ratio of 0.4464 provided for in the Topco merger was fair, from a financial point of view, to AMB. Representatives of Wachtell Lipton discussed with the AMB board the duties applicable to its decisions with respect to its review and consideration of the proposed transaction, and reviewed the material terms of the proposed merger agreement and the post-closing governance arrangements, as well as compensation and benefits issues in connection with the transaction. Following these presentations and discussions, and other discussions by the AMB board concerning, among other things, the matters described below under “— AMB’s Reasons for the Topco Merger; Recommendations of the AMB Board of Directors,” the AMB board of directors, by a unanimous vote of all directors, concluded that the proposed merger agreement and the transactions contemplated thereby, including the Topco merger, were advisable and in the best interests of AMB and its stockholders, and approved the merger agreement.
 
On January 30, 2011, the ProLogis board of trustees also met to consider the proposed strategic business combination of AMB and ProLogis. At this meeting, ProLogis’ senior management reviewed with the ProLogis board of trustees the business terms of the proposed transaction. ProLogis management, together with ProLogis’ legal and financial advisors, reviewed the results of the due diligence review of AMB, and reviewed the strategic rationale and the anticipated benefits of the proposed transaction to ProLogis shareholders. Representatives of Morgan Stanley then reviewed with the ProLogis board of trustees the financial terms of the proposed transaction and presented its financial analysis of the proposed transaction. After further discussion with the ProLogis board of trustees, Morgan Stanley then delivered to the ProLogis board of trustees its oral opinion (as subsequently confirmed in writing in an opinion dated January 30, 2011), as described under “— Opinion of ProLogis’ Financial Advisor,” that, as of the date of that opinion and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth in its opinion, the exchange ratio of 0.4464 pursuant to the merger agreement was fair, from a financial point of view, to the holders of ProLogis common shares. Representatives of Mayer Brown LLP and Greenberg Traurig, LLP discussed with the ProLogis board of trustees the duties applicable to its decisions with respect to its review and consideration of the proposed transaction, and reviewed the material terms of the proposed merger agreement and the post-closing governance arrangements, as well as compensation and benefits issues in connection with the transaction. Following these presentations and discussions, and other discussion by the ProLogis board of trustees concerning, among other things, the matters described below under “— ProLogis’ Reasons for the Merger; Recommendations of the ProLogis Board of Trustees,” the ProLogis board of trustees, by a unanimous vote of all trustees, concluded that the proposed merger agreement and the transactions contemplated


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thereby, including the ProLogis merger and the Topco merger, were advisable and in the best interests of ProLogis and its shareholders, and approved the merger agreement.
 
Following the approvals of the AMB board of directors and ProLogis board of trustees, AMB and ProLogis finalized and executed the merger agreement and other transaction documentation. On January 31, 2011, AMB and ProLogis issued a joint press release announcing the transaction.
 
AMB’s Reasons for the Topco Merger; Recommendation of the AMB Board of Directors
 
After careful consideration, the AMB board of directors, by a unanimous vote of all directors, at a meeting held on January 30, 2011, determined that the merger agreement and the transactions contemplated thereby, including the Topco merger, are advisable and in the best interests of AMB and its stockholders, and approved the merger agreement. In reaching its decision, the AMB board of directors consulted with AMB’s senior management and its financial and legal advisors, and considered a number of factors that the board of directors believed supported its decision, including the following material factors:
 
  •  Strategic Considerations.  The AMB board of directors believed that the Merger will provide a number of significant strategic opportunities, including the following:
 
  •  the opportunity to bring together two of the most complementary customer franchises in real estate to create an integrated industrial REIT and a stronger platform for value creation;
 
  •  the expectation that, by combining two companies with businesses in complementary geographic regions, the combined company would be a well-positioned and diversified global player that is active on four continents with profitable scale, with approximately 600 million square feet of modern distribution facilities in important markets and logistics corridors in 22 countries, enabling it to expand its relationships with its large, multinational customers that require space in multiple locations and to better serve the needs of multi-market customers in about 78% of the global economy in a profitable manner;
 
  •  the expectation that the combination will more rapidly advance a number of priorities underway at AMB, including by improving operational efficiencies, achieving profitable scale, deepening the presence in AMB’s current markets and expanding AMB’s geographic footprint by adding presence in the United Kingdom and Eastern Europe;
 
  •  the expectation that the combined company would have an improved cost of capital, with greater operating and financial flexibility to capture opportunities across business cycles and to manage currency risk;
 
  •  the expectation that the combined company would be able to better serve the needs of its customers because of the larger geographic footprint and the wider land bank of the combined company, enabling the combined company to expand its relationships with its large multinational customers that require space in multiple locations;
 
  •  the expectation that the combination will result in improved liquidity for the stockholders of AMB as a result of the increased equity capitalization and the increased shareholder base of the combined company;
 
  •  the expectation that the transaction will create synergies and be immediately accretive, with the full expected annual gross savings in general and administrative expenses of $80 million expected to be realized by the end of 2012;
 
  •  the expectation that the combined company will be a leader in the industrial real estate private capital sector, with a broad range of product offerings across the risk/return spectrum and across the Americas, Europe and Asia;
 
  •  the expectation that the combined company will have a diversified customer base, with the largest customer accounting for less than 2.6% of the overall rents of the combined company;


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  •  the expectation that transactions contemplated by the merger agreement will enhance the level of management depth and experience of the combined company, while also providing for the continuation of certain members of AMB senior management;
 
  •  the belief that the combined company will be stronger and more diversified and therefore will be better positioned to benefit from the growing recovery in the general economy and in rental prices in particular; and
 
  •  the belief that there was no merger partner other than ProLogis that would provide AMB with all of the strategic benefits noted above, including the customer franchise and global scale that ProLogis would provide.
 
  •  Fixed Exchange Ratio.  AMB considered that the fixed exchange ratio, which will not fluctuate as a result of changes in the price of AMB common stock or ProLogis common shares, provides certainty to the shareholders of both parties as to their respective pro forma percentage ownership of the combined company.
 
  •  Merger of Equals.  The combination has been structured as a merger of equals, with an exchange ratio that reflected an at-the-market transaction based on the unaffected market prices of AMB common stock and ProLogis common shares and no payment of a control premium to the stockholders of AMB or the shareholders of ProLogis. The AMB board of directors viewed this structure as favorable, in that AMB is engaging in a strategic combination with a company with similarities to AMB. The AMB board of directors also considered that the combination would allow AMB and its stockholders to achieve many of the same objectives of a large acquisition (e.g., increasing size and total market capitalization) without paying the premium typical of many acquisition transactions. Further, the AMB board of directors believed that the combination will allow AMB stockholders to participate in the growth and future value creation of the combined company and to share pro rata in the benefits of the expected synergies.
 
  •  Opinion of Financial Advisor.  The AMB board of directors considered the opinion of J.P. Morgan that, as of January 30, 2011 and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth in its opinion, the exchange ratio of 0.4464 provided for in the Topco merger was fair, from a financial point of view, to AMB, as more fully described elsewhere in this joint proxy statement/prospectus.
 
  •  Participation in Future Appreciation.  The AMB board of directors considered the fact that the Merger would allow AMB stockholders to participate in potential further appreciation of the combined company after the Merger.
 
  •  Tax-Free Transaction.  The AMB board of directors considered the expectation that the Merger will generally qualify as a tax-free transaction to the AMB stockholders for U.S. federal income tax purposes.
 
  •  Governance.  The AMB board of directors considered that the following governance arrangements provided by the merger agreement would enable continuity of management and an effective and timely integration of the two companies’ operations:
 
  •  the board of directors of the combined company would be composed of five appointees chosen by the AMB board of directors and six appointees chosen by the ProLogis board of trustees, and the key leadership of the combined company after completion of the Merger would be drawn from senior executives from each of AMB and ProLogis; and
 
  •  the arrangements providing for Mr. Moghadam of AMB to serve as chairman of the board and co-chief executive officer of the combined company and Mr. Rakowich of ProLogis to serve as chairman of the executive committee of the board and co-chief executive officer of the combined company after the Merger until December 31, 2012, at which point Mr. Moghadam would remain as chairman and become sole chief executive officer of the combined company.
 
  •  Familiarity with Businesses.  The AMB board of directors considered its knowledge of AMB’s business, operations, financial condition, earnings and prospects and of ProLogis’s business, operations, financial condition, earnings and prospects, taking into account the results of AMB’s due diligence review of


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  ProLogis, as well as its knowledge of the current and prospective environment in which AMB and ProLogis operate, including economic and market conditions.
 
  •  High Likelihood of Consummation.  The AMB board of directors considered the commitment on the part of both parties to complete the business combination between AMB and ProLogis pursuant to their respective obligations under the terms of the merger agreement, and the likelihood that the regulatory and stockholder approvals needed to complete the transaction would be obtained in a timely manner.
 
The AMB board of directors also considered a variety of risks and other potentially negative factors concerning the merger agreement and the Merger, including the following:
 
  •  the possibility that the Merger may not be completed, or that completion may be unduly delayed, for reasons beyond the control of AMB or ProLogis;
 
  •  the risk that failure to complete the Merger could negatively affect the stock prices and the future business and financial results of AMB;
 
  •  the risks associated with integrating two businesses, including the risks associated with having two chief executive officers for a period of time and the risk that the combined company may experience operational interruptions or the loss of key employees or customers;
 
  •  the risk associated with being able to accomplish the continuity of management and management succession contemplated by the merger agreement;
 
  •  the risk of not capturing all of the anticipated operational synergies and cost savings between AMB and ProLogis and the risk that other anticipated benefits might not be realized on the expected timeframe or at all;
 
  •  the substantial costs to be incurred in connection with the transaction, including the costs of integrating the businesses of AMB and ProLogis, termination and severance costs of both companies, system conversions, and the transaction expenses arising from the Merger, which are estimated to be approximately $160 million to $180 million in the aggregate;
 
  •  the weaker debt coverage (not taking into account expected synergies or the business plan of the combined company) and higher leverage that the combined company was expected to have relative to AMB currently;
 
  •  the restrictions on the conduct of AMB’s business between the date of the merger agreement and the date of the consummation of the proposed Merger;
 
  •  the merger agreement’s provisions imposing restrictions on AMB from soliciting alternative transactions and the termination fee of $210 million and up to $20 million in expense reimbursement amount that AMB would be required to pay if the merger agreement is terminated under certain circumstances could limit the willingness of a third party to propose a competing business combination transaction with AMB;
 
  •  the risk that the transactions contemplated by the merger agreement could trigger the termination of, and mandatory prepayments of all amounts outstanding under, AMB’s existing credit agreements unless appropriate lender consents or waivers are received or replacement credit agreements of the combined company are entered into in connection with the closing of the Merger, as anticipated;
 
  •  the potential risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to implement the Merger; and
 
  •  the other factors described under “Risk Factors.”
 
In addition to considering the factors described above, the AMB board of directors considered the fact that some of AMB’s directors and executive officers have other interests in the Merger that are different from, or in addition to, the interests of AMB stockholders, as discussed under “ — Interests of AMB Directors and Executive Officers in the Merger.”
 
The AMB board of directors concluded that the potentially negative factors associated with the Merger were outweighed by the potential benefits that it expected the AMB stockholders would achieve as a result of the Merger.


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Accordingly, the AMB board of directors determined that the merger agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of, AMB and its stockholders.
 
The above discussion of the factors considered by the AMB board of directors is not intended to be exhaustive, but does set forth the material factors considered by the AMB board of directors. In reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement, the AMB board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The AMB board of directors considered all these factors as a whole, including discussions with, and questioning of, AMB management and AMB’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.
 
For the reasons set forth above, the AMB board of directors unanimously determined that the merger agreement and the transactions contemplated thereby, including the Topco merger, are advisable and in the best interests of AMB and its stockholders, and unanimously approved the merger agreement. The AMB board of directors unanimously recommends that the AMB stockholders vote “FOR” the Topco merger, including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger, “FOR” the bylaw amendment, and “FOR” the charter amendment.
 
ProLogis’ Reasons for the Merger; Recommendation of the ProLogis Board of Trustees
 
After careful consideration, the ProLogis board of trustees, by a unanimous vote of all of its trustees, at a meeting held on January 30, 2011, determined that the merger agreement and the transactions contemplated thereby, including the ProLogis merger and the Topco merger, are advisable and in the best interests of ProLogis and its shareholders, and approved the merger agreement. In reaching its decision, the ProLogis board of trustees consulted with ProLogis’ senior management and its financial and legal advisors, and considered a number of factors that the board of trustees believed supported its decision, including the following material factors:
 
  •  Strategic Considerations.  The ProLogis board of trustees believed that the Merger will provide a number of significant strategic opportunities, including the following:
 
  •  The combined company was expected to have approximately 600 million square feet of industrial distribution space worldwide. The combination was expected to enhance ProLogis’ platform in North America, Western Europe and Japan, while giving ProLogis immediate and less costly access to China and Brazil through AMB’s existing platform than that which ProLogis could have accomplished on its own in the current economic cycle. ProLogis believed that the combined company will benefit from the combination of complementary assets and resources, enabling the combined company to expand its relationships with its large, multinational customers that require space in multiple locations and to better serve the needs of its multinational customers. In addition, ProLogis believed that the combined company will have a diversified customer base, with the largest customer accounting for less than 2.6% of the overall rents of the combined company.
 
  •  The ProLogis board of trustees considered that ProLogis is engaging in a strategic combination with a company with similarities to ProLogis, and believed that the combination will more rapidly advance a number of priorities underway at ProLogis, including improving operational efficiencies, increasing assets in major logistics markets and increasing asset utilization by stabilizing the operating portfolio, leasing up the development portfolio and monetizing the land bank.
 
  •  The combined company was expected to have an estimated total equity market capitalization of $14 billion and to be among the largest REITs as measured by enterprise value as well as total assets under management. The combined company was expected to have total assets owned and under management of approximately $46 billion. As a result of its larger size and enhanced balance sheet and credit profile, the combined company is expected to have greater financial flexibility and improved access to capital markets with a lower cost of capital.
 
  •  The combined company was expected to have approximately $25.8 billion of assets under management in 19 funds on four continents, making it one of the largest and most diversified investment management businesses in the real estate industry. This was expected to allow the combined company to provide a


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  broader spectrum of product offerings, making the combined company an attractive option for institutional investors seeking exposure to the industrial distribution sector across a variety of risk/return profiles.
 
  •  ProLogis believed that the combined company can generate significant synergies by eliminating duplicative general and administrative expenses, with the full expected annual gross savings in general and administrative expenses of $80 million expected to be realized by the end of 2012.
 
  •  ProLogis believed that the combination will result in improved liquidity for its shareholders as a result of the increased equity capitalization and the increased shareholder base of the combined company.
 
  •  ProLogis believed that the combination will strengthen ProLogis’ balance sheet as the combined company was expected to initially have a total debt to total undepreciated real estate assets ratio of 42.6%, as opposed to a ratio of 44.0% for ProLogis on a stand-alone basis as of December 31, 2010.
 
  •  ProLogis believed that transactions contemplated by the merger agreement will enhance the level of management depth and experience of the combined company, while also providing for the continuation of certain members of ProLogis senior management.
 
  •  ProLogis believed that there was no merger partner other than AMB that would provide ProLogis with all of the strategic benefits noted above, and therefore ProLogis did not seek alternative business combination transactions.
 
  •  ProLogis Name.  The ProLogis board of trustees also considered that the combined company would continue to use the “ProLogis” name.
 
  •  Transaction Structure.  The combined company will be structured as an UPREIT, which the ProLogis board of trustees believes will give the combined company a greater ability to acquire assets using a tax-deferred acquisition currency. In addition, ProLogis noted that the transaction structure did not present any unusual regulatory or third-party required approvals.
 
  •  Fixed Exchange Ratio.  ProLogis believed that the fixed exchange ratio, which will not fluctuate as a result of changes in the price of ProLogis common shares or AMB common stock, provides certainty to the shareholders of both parties as to their respective pro forma percentage ownership of the combined company.
 
  •  Merger of Equals.  The combination has been structured as a merger of equals, with an exchange ratio that reflected an at-the-market transaction based on the unaffected market prices of ProLogis common shares and AMB common stock and no payment of a control premium to the shareholders of ProLogis or the stockholders of AMB. The ProLogis board of trustees also considered that the combination would allow ProLogis and its shareholders to achieve many of the same objectives of a large acquisition (e.g., increasing size and total market capitalization) without paying the premium typical of many acquisition transactions. Further, the ProLogis board of trustees believed that the combination will allow ProLogis shareholders to participate in the growth and future value creation of the combined company and to share pro rata in the benefits of the expected synergies.
 
  •  Participation in Future Appreciation.  The ProLogis board of trustees considered the fact that the Merger would allow ProLogis shareholders to participate in potential further appreciation of the combined company after the Merger.
 
  •  Tax-Free Transaction.  The ProLogis board of trustees considered the expectation that the Merger will generally qualify as a tax-free transaction to the ProLogis shareholders for U.S. federal income tax purposes.
 
  •  Governance.  The ProLogis board of trustees considered that the following governance arrangements provided by the merger agreement would enable continuity of management and an effective and timely integration of the two companies’ operations:
 
  •  the board of directors of the combined company would be composed of a majority of appointees chosen by the ProLogis board of trustees, and the key leadership after completion of the Merger would be drawn from senior executives from each of ProLogis and AMB; and


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  •  the arrangements providing for Mr. Rakowich of ProLogis to serve as chairman of the executive committee of the board and co-chief executive officer of the combined company of the combined company after the Merger until December 31, 2012.
 
  •  Opinion of Financial Advisor.  ProLogis’ board of trustees also considered the opinion of Morgan Stanley that, as of January 30, 2011 and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth in its opinion, the exchange ratio of 0.4464 pursuant to the merger agreement was fair, from a financial point of view, to the holders of ProLogis common shares, as more fully described elsewhere in this joint proxy statement/prospectus.
 
  •  Familiarity with Businesses.  The ProLogis board of trustees considered its knowledge of ProLogis’ business, operations, financial condition, earnings and prospects and of AMB’s business, operations, financial condition, earnings and prospects, taking into account the results of ProLogs’ due diligence review of AMB, as well as its knowledge of the current and prospective environment in which ProLogis and AMB operate, including economic and market conditions.
 
ProLogis’ board of trustees also considered a variety of risks and other potentially negative factors concerning the merger agreement and the Merger, including the following:
 
  •  The operations, technologies and personnel of the two companies may not be successfully integrated. The combined company may also experience operational interruptions or the loss of key employees or customers.
 
  •  The proposed transaction presents the potential risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to implement the Merger.
 
  •  The combined company may not realize the synergies and cost savings that ProLogis expects from the combination. In addition, many of the benefits the combined company hopes to realize as part of the combination are difficult to quantify and may only be realized, if at all, over time.
 
  •  ProLogis and AMB are expected to incur substantial costs in connection with the transactions contemplated by the merger agreement, including the costs of integrating the businesses of AMB and ProLogis, termination and severance costs of both companies, system conversions, and the transaction expenses arising from the Merger, which are estimated to be approximately $160 million to $180 million in the aggregate.
 
  •  Completion of the transactions contemplated by the merger agreement requires lender consents or waivers under certain existing debt of ProLogis. If ProLogis does not receive any of such lender consents or waivers (or refinance such debt), and all of such lenders elect to declare a default and accelerate the maturity of their respective indebtedness, ProLogis could be obligated to immediately repay the aggregate outstanding principal amount of such debt plus prepayment penalties.
 
  •  The merger agreement includes restrictions on the conduct of ProLogis’ business between the date of the merger agreement and the date of the consummation of the proposed Merger.
 
  •  The Merger may not be completed, or completion may be unduly delayed, for reasons beyond the control of ProLogis or AMB
 
  •  The risk that failure to complete the Merger could negatively affect the stock prices and future business and financial results of ProLogis.
 
  •  The merger agreement’s provisions imposing restrictions on ProLogis’ soliciting alternative transactions and the termination fee of up to $315 million and up to $20 million in expense reimbursement that ProLogis would be required to pay if the merger agreement is terminated under certain circumstances could limit the willingness of a third party to propose a competing business combination transaction with ProLogis.
 
  •  ProLogis’ board of trustees also considered the other factors described under “Risk Factors.”
 
In addition to considering the factors described above, the ProLogis board of trustees considered the fact that some of ProLogis’ trustees and executive officers have other interests that are different from, or in addition to, the


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interests of the ProLogis shareholders, as discussed under “ — Interests of ProLogis Trustees and Officers in the Merger.”
 
The ProLogis board of trustees concluded that the potentially negative factors associated with the Merger were outweighed by the potential benefits that it expected the ProLogis shareholders would achieve as a result of the Merger. Accordingly, the ProLogis board of trustees determined that the merger agreement and the transactions contemplated thereby, including the ProLogis merger and the Topco merger, are advisable, fair to, and in the best interests of, ProLogis and its shareholders.
 
The above discussion of the factors considered by ProLogis’ board of trustees is not intended to be exhaustive, but does set forth the material factors considered by ProLogis’ board of trustees. In reaching its decision to approve the merger agreement and the transactions contemplated by the merger agreement, the ProLogis board of trustees did not quantify or assign any relative weights to the factors considered, and individual trustees may have given different weights to different factors. The ProLogis board of trustees considered all these factors as a whole, including discussions with, and questioning of, ProLogis management and ProLogis’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.
 
For the reasons set forth above, the ProLogis board of trustees unanimously determined that the merger agreement and the transactions contemplated thereby, including the ProLogis merger and Topco merger, are advisable and in the best interests of ProLogis and its shareholders, and unanimously approved the merger agreement. The ProLogis board of trustees unanimously recommends that the ProLogis shareholders vote “FOR” the Merger.
 
Opinion of AMB’s Financial Advisor
 
At the meeting of the AMB board of directors on January 30, 2011, J.P. Morgan rendered its oral opinion to the AMB board of directors that, as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the exchange ratio in the Topco merger was fair from a financial point of view to AMB. J.P. Morgan subsequently confirmed its oral opinion by delivering its written opinion, dated January 30, 2011, to the AMB board of directors. No limitations were imposed by the AMB board of directors upon J.P. Morgan with respect to the investigations made or procedures followed by it in rendering its opinion.
 
The full text of the written opinion of J.P. Morgan, dated January 30, 2011, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached to this joint proxy statement/prospectus as Annex D. The summary of J.P. Morgan’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. AMB stockholders should read this opinion carefully and in its entirety. J.P. Morgan’s opinion is addressed to the AMB board of directors, is directed only to the fairness from a financial point of view of the exchange ratio in the Topco merger to AMB as of the date of the opinion, and does not address any other aspect of the transactions contemplated by the merger agreement. J.P. Morgan provided its advisory services and opinion for the information and assistance of the AMB board of directors in connection with its consideration of the Topco merger. The opinion of J.P. Morgan does not constitute a recommendation as to how any AMB stockholder should vote with respect to the Topco merger. In addition, this opinion does not in any manner address the price at which AMB common stock or ProLogis common shares will trade at any time subsequent to the date of the opinion. J.P. Morgan’s opinion was approved by J.P. Morgan’s fairness committee.
 
In arriving at its opinion, J.P. Morgan, among other things:
 
  •  reviewed a draft dated January 29, 2011 of the merger agreement;
 
  •  reviewed certain publicly available business and financial information concerning AMB and ProLogis and the industries in which they operate;
 
  •  compared the financial and operating performance of AMB and ProLogis with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and


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  historical market prices of AMB common stock and ProLogis common shares and certain publicly traded securities of such other companies;
 
  •  reviewed certain internal financial data, analyses and forecasts prepared or approved by management of AMB or management of ProLogis relating to their respective businesses, as well as the estimated amount and timing of the cost savings and related expenses and synergies expected to result from the Topco merger (which we refer to as the “synergies”); and
 
  •  performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.
 
In addition, J.P. Morgan held discussions with certain members of the management of AMB and ProLogis with respect to certain aspects of the Topco merger, and the past and current business operations of AMB and ProLogis, the financial condition and future prospects and operations of AMB and ProLogis, the effects of the Topco merger on the financial condition and future prospects of AMB and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.
 
In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by AMB and ProLogis or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (nor did J.P. Morgan assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities (including real estate assets and liabilities), nor did J.P. Morgan evaluate the solvency of AMB, ProLogis or any other party to the merger agreement under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the synergies, J.P. Morgan assumed that they had been reasonably prepared based on assumptions reflecting the best then-available estimates and judgments by management of AMB or management of ProLogis, as applicable, as to the expected future results of operations and financial condition of AMB and ProLogis, respectively, to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the synergies) or the assumptions on which they were based. J.P. Morgan also assumed that each of the ProLogis merger and the Topco merger will qualify as a tax-free reorganization for U.S. federal income tax purposes, and will be consummated as described in the merger agreement, and that the definitive merger agreement does not differ in any material respects from the draft thereof furnished to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by AMB and ProLogis in the merger agreement and the related agreements are and will be true and correct in all respects material to J.P. Morgan’s analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to AMB with respect to such issues. J.P. Morgan further assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Topco merger will be obtained without any material adverse effect on AMB or ProLogis, or on the contemplated benefits of the Topco merger.
 
J.P. Morgan’s opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of J.P. Morgan’s opinion. It should be understood that subsequent developments may affect J.P. Morgan’s opinion and J.P. Morgan does not have any obligation to update, revise, or reaffirm its opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, to AMB of the exchange ratio in the Topco merger and J.P. Morgan expressed no opinion as to the fairness of the Topco merger to the holders of any class of securities, creditors or other constituencies of AMB or as to the underlying decision by AMB to engage in the Topco merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the Topco merger, or any class of such persons relative to the exchange ratio or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which AMB common stock or ProLogis common shares will trade at any time subsequent to the date of the opinion.
 
In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methods in reaching its opinion. The following is a summary of certain of the financial analyses undertaken by J.P. Morgan and delivered to the AMB board of directors on January 30, 2011, which analyses were among those considered by J.P. Morgan in connection with delivering its opinion.


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Historical Exchange Ratio Analysis
 
J.P. Morgan calculated (1) the daily implied historical exchange ratios during the five years ending January 25, 2011 by dividing the daily volume weighted average price (which we refer to as “VWAP”) per ProLogis common share by that of AMB common stock for each trading day during that period, (2) the average of those daily implied historical exchange ratios for the one-day, one-week, two-week, since January 3, 2011, four-week, 12-week, 26-week, 52-week, three-year and five-year periods ending January 25, 2011 and (3) the historical exchange ratio for the one-day closing price by dividing the closing price per share as of January 25, 2011 of ProLogis common shares by that of AMB common stock. J.P. Morgan also noted the median, low and high exchange ratios for each period referenced in clause (2) above. The analysis resulted in the following implied exchange ratios for the periods indicated, as compared to the exchange ratio of 0.4464x provided for in the Topco merger:
 
         
    Exchange Ratio  
 
1-day closing price
    0.4412 x
1-day VWAP
    0.4374 x
1-week average VWAP
    0.4326 x
2-week average VWAP
    0.4409 x
Since January 3, 2011 average VWAP
    0.4440 x
4-week average VWAP
    0.4462 x
12-week average VWAP
    0.4509 x
26-week average VWAP
    0.4488 x
52-week average VWAP
    0.4618 x
3-year average VWAP
    0.6141 x
5-year average VWAP
    0.7930 x
 
J.P. Morgan noted that a historical exchange ratio analysis is not a valuation methodology and that such analysis was presented merely for reference purposes.
 
Contribution Analysis
 
J.P. Morgan analyzed the contribution of each of AMB and ProLogis to the pro forma combined company with respect to EBITDA (as defined in “— AMB Unaudited Prospective Financial Information”), FFO (as defined as “Core FFO” in “— AMB Unaudited Prospective Financial Information”) and AFFO (as defined in “— AMB Unaudited Prospective Financial Information”) for CY11 and CY12. For purposes of the contribution analysis, J.P. Morgan assumed that the contribution with respect to EBITDA reflected each company’s contribution to the combined company’s pro forma firm value. Equity value contributions and relative ownership interests were then derived by adjusting firm value contributions for outstanding net debt, preferred equity and non-controlling interests of both companies. J.P. Morgan further assumed that the contributions with respect to FFO and AFFO reflected each company’s contribution to the combined company’s pro forma equity value and relative ownership interests. The analyses yielded the following pro forma diluted equity value contributions and ownership interests and implied exchange ratios, as compared to the pro forma diluted ownership interest of 40.4% implied by the exchange ratio provided for in the Topco merger:
 
                 
EBITDA
    CY11       CY12  
     
     
AMB contribution / ownership
    33.9 %     37.3 %
Implied exchange ratio
    0.5892 x     0.5095 x
FFO
    CY11       CY12  
     
     
AMB contribution / ownership
    39.9 %     38.8 %
Implied exchange ratio
    0.4568 x     0.4784 x
AFFO
    CY11       CY12  
     
     
AMB contribution / ownership
    39.4 %     40.5 %
Implied exchange ratio
    0.4662 x     0.4448 x


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Public Trading Analysis
 
Using publicly available information, including published equity research analysts’ estimates of funds from operations (FFO) per share and estimated adjusted funds from operations (AFFO) per share for calendar year 2011 (which we refer to as “CY11”) and calendar year 2012 (which we refer to as “CY12”), J.P. Morgan analyzed certain trading multiples of selected other publicly traded REITs. None of the selected companies are identical to AMB or ProLogis. However, the selected companies were chosen because they are publicly traded REITs with operations that, for purposes of the analysis of J.P. Morgan, may be considered similar to those of AMB and ProLogis, including primarily the ownership of commercial real estate, as well as tenure in the public markets, capitalization strategies, relative market position and management leadership qualities. These other REITS were as follows:
 
  •  Simon Property Group, Inc.;
 
  •  Boston Properties, Inc.;
 
  •  Equity Residential;
 
  •  Federal Realty Investment Trust; and
 
  •  Public Storage.
 
For each of the other REITs, J.P. Morgan calculated the multiple of equity market price per share to the median estimate of its CY11 and CY12 FFO per share and AFFO per share, as reported by equity research analysts as of January 25, 2011. J.P. Morgan also calculated the same trading multiples for AMB and ProLogis based on equity research analyst data and data provided by AMB management. In J.P. Morgan’s view, the FFO and AFFO metrics used by equity research analysts and AMB management were sufficiently similar so as not to materially affect this analysis.
 
The following presents the results of this analysis:
 
                     
        Price / FFO per
   
        Share Multiple   Price / AFFO per Share Multiple
        CY11   CY12   CY11   CY12
 
Simon Property Group, Inc. 
  Median equity research estimate   15.2x   14.2x   17.2x   16.5x
Boston Properties, Inc. 
  Median equity research estimate   21.0x   19.1x   32.7x   27.2x
Equity Residential
  Median equity research estimate   21.4x   18.5x   25.4x   22.4x
Federal Realty Investment Trust
  Median equity research estimate   19.6x   18.7x   22.9x   21.8x
Public Storage
  Median equity research estimate   19.3x   18.2x   21.0x   19.9x
Other REITs
  Median equity research estimate   19.6x   18.5x   22.9x   21.8x
AMB
  Median equity research estimate   24.0x   21.4x   33.7x   28.9x
    Management estimate   24.4x   22.2x   30.7x   24.7x
ProLogis
  Median equity research estimate   22.2x   18.6x   29.3x   24.2x
    Management estimate   23.4x   20.2x   28.9x   24.1x
 
J.P. Morgan applied a range of these multiples to the CY11 and CY12 FFO per share and AFFO per share estimates for AMB and ProLogis as provided by AMB management, which resulted in the following range of implied share prices for each share of AMB and ProLogis, as compared to the (1) closing price per share of AMB common stock as of January 25, 2011 of $33.18, (2) closing price per ProLogis common share as of January 25, 2011 of $14.64 and (3) implied price per share of ProLogis common shares of $14.81 based on the exchange ratio of


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0.4464x provided for in the Topco merger applied to the closing price per share of AMB common stock as of January 25, 2011:
 
                                         
          CY11 FFO per Share     CY12 FFO per Share  
                Implied
          Implied
 
          Multiple     Share Price     Multiple     Share Price  
 
AMB
    High       25x     $ 34.10       23x     $ 34.30  
      Low       19x     $ 25.90       18x     $ 26.90  
ProLogis
    High       25x     $ 15.60       23x     $ 16.70  
      Low       19x     $ 11.90       18x     $ 13.10  
 
                                         
          CY11 AFFO per share     CY12 AFFO per share  
                Implied
          Implied
 
          Multiple     share price     Multiple     share price  
 
AMB
    High       34x     $ 36.80       29x     $ 38.90  
      Low       23x     $ 24.90       22x     $ 29.50  
ProLogis
    High       34x     $ 17.20       29x     $ 17.60  
      Low       23x     $ 11.60       22x     $ 13.30  
 
J.P. Morgan compared the results of the implied equity values per share for AMB and ProLogis. For each comparison, J.P. Morgan compared the highest equity value per share for ProLogis to the lowest equity value per share for AMB to derive the highest exchange ratio implied by each pair of estimates. J.P. Morgan also compared the lowest equity value per share for ProLogis to the highest equity value per share for AMB to derive the lowest exchange ratio implied by each pair of estimates. The implied exchange ratios resulting from this analysis, as compared to the exchange ratio of 0.4464x provided for in the Topco merger, were:
 
                 
    Exchange Ratio
    FFO per Share   AFFO per Share
    CY11   CY12   CY11   CY12
 
Highest ProLogis equity value per share to lowest AMB equity value per share
  0.6023x   0.6208x   0.6908x   0.5966x
Lowest ProLogis equity value per share to highest AMB equity value per share
  0.3490x   0.3819x   0.3152x   0.3419x
 
Dividend Discount Analysis
 
J.P. Morgan performed a dividend discount analysis of AMB common stock and ProLogis common shares for the purpose of determining the fully diluted implied equity value per share of each company. In performing this analysis, J.P. Morgan used five-year projections of dividends per share for AMB as provided by AMB management and five-year extrapolations thereof that were reviewed and approved by AMB management. J.P. Morgan also used five-year projections of dividend per share payout ratios (as a percentage of FFO per share) for ProLogis as provided by AMB management and five-year extrapolations thereof that were reviewed and approved by AMB management. The dividend per share payout ratios (as a percentage of FFO per share) for ProLogis that were provided to J.P. Morgan by AMB management for 2011, 2012, 2013, 2014 and 2015, respectively, were as follows: 71.7%; 68.6%; 64.2%; 67.0%; and 68.5%. A dividend discount analysis is a method of evaluating the equity value of a company using estimates of future dividends to shareholders generated by the company and taking into consideration the time value of money with respect to those future dividends by calculating their “present value.” “Present value” refers to the current value of the future dividends to shareholders paid by the company and is obtained by discounting those future dividends back to the present using a discount rate that takes into account macro-economic assumptions, estimates of risk, the opportunity cost of capital and other appropriate factors.
 
Based on the dividends AMB was projected to distribute during fiscal years 2011 through 2020, J.P. Morgan discounted the dividend stream to present values using a range of discount rates from 8.25% to 8.75%, which was chosen by J.P. Morgan based upon an analysis of the cost of equity for AMB derived from the capital asset pricing model. J.P. Morgan also calculated a range of terminal values for the company at the end of the 10-year period


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ending fiscal year 2020 by applying a perpetual dividend growth rate ranging from 4.25% to 4.75%, which was chosen by J.P. Morgan based upon AMB management’s estimates for AMB’s long-term FFO growth rate, and discounted the terminal value using a range of discount rates from 8.25% to 8.75%, which was chosen by J.P. Morgan based upon an analysis of the cost of equity for AMB derived from the capital asset pricing model. “Terminal value” refers to the capitalized value of all future dividends to shareholders paid by the company for periods beyond the financial forecast.
 
Based on the dividends ProLogis was projected to distribute during fiscal years 2011 through 2020, J.P. Morgan discounted the dividend stream to present values using a range of discount rates from 8.75% to 9.25%, which was chosen by J.P. Morgan based upon an analysis of the cost of equity for ProLogis derived from the capital asset pricing model. J.P. Morgan also calculated a range of terminal values for the company at the end of the 10-year period ending fiscal year 2020 by applying a perpetual dividend growth rate ranging from 4.25% to 4.75%, which was chosen by J.P. Morgan based upon AMB management’s estimates for ProLogis’ long-term FFO growth rate, and discounted the terminal value using a range of discount rates from 8.75% to 9.25%, which was chosen by J.P. Morgan based upon an analysis of the cost of equity for ProLogis derived from the capital asset pricing model.
 
The analysis yielded the following implied equity value per share, compared to the implied ProLogis price per common share of $14.81 based on the exchange ratio of 0.4464x provided for in the Topco merger applied to the closing price per share of AMB common stock as of January 25, 2011:
 
                 
    AMB   ProLogis
 
High
  $ 39.40     $ 16.00  
Low
  $ 31.70     $ 13.20  
 
J.P. Morgan compared the results for AMB to the results for ProLogis. For each comparison, J.P. Morgan compared the highest equity value per share for ProLogis to the lowest equity value per share for AMB to derive the highest exchange ratio implied by each pair of estimates. J.P. Morgan also compared the lowest equity value per share for ProLogis to the highest equity value per share for AMB to derive the lowest exchange ratio implied by each pair of estimates. The implied exchange ratios resulting from this analysis, as compared to the exchange ratio of 0.4464x provided for in the Topco merger, were:
 
         
    Exchange Ratio  
 
ProLogis to AMB
       
Highest ProLogis equity value per share to lowest AMB equity value per share
    0.5047x  
Lowest ProLogis equity value per share to highest AMB equity value per share
    0.3350x  
 
Value Creation Analysis
 
Intrinsic Value.  J.P. Morgan prepared a value creation analysis that compared the intrinsic equity value per share of AMB common stock based on the dividend discount analysis to the pro forma combined company equity value per share. The pro forma combined company equity value per share was equal to: (1) (a) the mid-point intrinsic equity value of AMB, plus (b) the mid-point intrinsic equity value of ProLogis, plus (c) the present value of expected synergies calculated by discounting the expected cash flows from AMB management’s estimated $90 million of run-rate synergies, comprised of an estimated $80 million of run-rate G&A synergies plus an estimated $10 million of run-rate non-G&A synergies, by a discount rate of 8.75% based on the blended midpoint of discount rates utilized in the dividend discount analyses for AMB and ProLogis, less (d) an estimated $150 million of costs to achieve such synergies and transaction-related expenses; divided by (2) pro forma diluted shares of the combined company common stock. There can be no assurance that the synergies, estimated cost to achieve such synergies or estimated transaction-related expenses will not be substantially greater or less than the AMB management estimate described above. The value creation analysis at the exchange ratio of 0.4464x provided for in the Topco merger yielded accretion to the holders of AMB common stock of 4.0%.
 
Market Value.  J.P. Morgan prepared a value creation analysis that compared the closing share price of AMB common stock on January 25, 2011 to the pro forma combined company equity value per share for the Topco merger. The pro forma combined company equity value per share was equal to: (1) (a) the market equity value of AMB as of January 25, 2011, plus (b) the market equity value of ProLogis as of January 25, 2011, plus (c) the value


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of expected synergies calculated by applying a blended FFO multiple of 23.8x to AMB management’s estimate of $90 million of run-rate synergies, comprised of an estimated $80 million of run-rate G&A synergies plus an estimated $10 million of run-rate non-G&A synergies, less (d) an estimated $150 million of costs to achieve such synergies and transaction-related expenses; divided by (2) pro forma diluted shares of the combined company common stock. There can be no assurance that the synergies, estimated cost to achieve such synergies or estimated transaction-related expenses will not be substantially greater or less than the AMB management estimate described above. The value creation analysis at the exchange ratio of 0.4464x provided for in the Topco merger yielded accretion to the holders of AMB common stock of 13.2%.
 
The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan.
 
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion. Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold.
 
As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for estate, corporate and other purposes. J.P. Morgan was selected on the basis of such experience and its familiarity with AMB to advise AMB in connection with the Merger and to deliver a fairness opinion to the AMB board of directors addressing only the fairness from a financial point of view of the exchange ratio in the Topco merger to AMB as of the date of such opinion.
 
For services rendered in connection with the Merger (including the delivery of its opinion), AMB has agreed to pay J.P. Morgan a fee of $20 million in the aggregate, $2 million of which was payable upon the earlier of public announcement of a transaction or delivery by J.P. Morgan of its opinion and $18 million of which is contingent upon the consummation of the Topco merger. In addition to the transaction fee, AMB may, at its sole discretion, pay J.P. Morgan an additional discretionary fee at closing of $2.5 million, based on AMB’s evaluation of the quality and quantity of the work performed by J.P. Morgan in connection with services rendered in connection with the Merger. In addition, AMB has agreed to reimburse J.P. Morgan for its reasonable expenses incurred in connection with its services, including the reasonable fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities, including liabilities arising under the federal securities laws.
 
During the two years preceding the date of its opinion, J.P. Morgan and its affiliates had commercial and investment banking relationships with AMB and ProLogis, for which J.P. Morgan and its affiliates received customary compensation. J.P. Morgan’s services for AMB have included: (1) acting as joint bookrunner for AMB’s offerings of common stock in April 2010 and March 2009, respectively, (2) acting as joint bookrunner for AMB’s offering of debt securities in August 2010 and November 2010, respectively, and (3) acting as dealer manager for AMB’s tender offers for certain of its outstanding debt securities in May 2009 and December 2009, respectively. Such services for ProLogis during such period have included: (1) acting as joint bookrunner for ProLogis’ offering of common shares in October 2010, (2) acting as joint bookrunner for ProLogis’ offering of convertible notes in March 2010, (3) acting as joint bookrunner for ProLogis’ offering of debt securities in August 2009, (4) acting as solicitation agent for ProLogis’ consent solicitation with respect to certain of its debt securities in September 2009, (5) acting as co-managing underwriter of ProLogis’ offering of common shares in April 2009 and (6) acting as


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dealer manager for ProLogis’ tender offer for certain of its outstanding debt securities in May 2009. Subsequent to the delivery of J.P. Morgan’s opinion, (1) J.P. Morgan was engaged to act as financial advisor to ProLogis in connection with ProLogis’ acquisition of additional ordinary units of PEPR and ProLogis’ tender offer for the outstanding PEPR ordinary units and convertible preferred units (as described under “Summary — Recent Developments”), for which J.P. Morgan will be paid a fee in an amount to be determined, and (2) J.P. Morgan Chase Bank, N.A., an affiliate of J.P. Morgan, entered into a new Senior Bridge Loan Agreement with ProLogis pursuant to which it is acting as lender to ProLogis in connection with such transactions. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under certain outstanding credit facilities of AMB and one of its affiliates and a lender to ProLogis, for which it receives customary compensation or other financial benefits. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities of AMB or ProLogis for their own account or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities.
 
Opinion of ProLogis’ Financial Advisor
 
In connection with the Merger, on January 30, 2011, Morgan Stanley rendered its oral opinion to the ProLogis board of trustees, subsequently confirmed in writing, to the effect that, as of such date and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to the holders of ProLogis common shares.
 
The full text of Morgan Stanley’s fairness opinion, dated January 30, 2011, is attached as Annex E to this joint proxy statement/prospectus. You should read the opinion in its entirety for a discussion of the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Morgan Stanley in rendering its opinion. This summary is qualified in its entirety by reference to the full text of such opinion. Morgan Stanley’s opinion is directed to the ProLogis board of trustees, addresses only the fairness of the exchange ratio from a financial point of view to the holders of ProLogis common shares, and does not address any other aspect of the transaction. Morgan Stanley’s opinion did not in any manner address the prices at which the AMB common stock will trade following consummation of the transaction or at any time, and does not constitute a recommendation as to how any shareholders of ProLogis or AMB stockholders should vote at any stockholders’ meetings held in connection with the transaction or whether to take any other action in connection with the transaction.
 
In arriving at its opinion, Morgan Stanley, among other things:
 
  •  reviewed certain publicly available financial statements and other business and financial information of ProLogis and AMB, respectively;
 
  •  reviewed certain internal financial statements and other operating data concerning ProLogis and AMB, respectively;
 
  •  reviewed certain financial projections prepared by the managements of ProLogis and AMB, respectively;
 
  •  reviewed information relating to certain strategic, financial and operational benefits anticipated from the transaction, prepared by the managements of ProLogis and AMB, respectively;
 
  •  discussed the past and current operations and financial condition and the prospects of ProLogis, including information relating to certain strategic, financial and operational benefits anticipated from the transaction, with senior executives of ProLogis;
 
  •  discussed the past and current operations and financial condition and the prospects of AMB, including information relating to certain strategic, financial and operational benefits anticipated from the transaction, with senior executives of AMB;
 
  •  reviewed the pro forma impact of the transaction on AMB’s FFO per share, cash flow, consolidated capitalization and financial ratios;
 
  •  reviewed the reported prices and trading activity for the ProLogis common shares and the AMB common stock;


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  •  compared the financial performance of ProLogis and AMB and the prices and trading activity of the ProLogis common shares and the AMB common stock with that of certain other publicly-traded companies comparable with ProLogis and AMB, respectively, and their securities;
 
  •  reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
 
  •  participated in discussions and negotiations among representatives of ProLogis and AMB and certain parties and their financial and legal advisors;
 
  •  reviewed the merger agreement and certain related documents; and
 
  •  performed such other analyses and considered such other factors as Morgan Stanley deemed appropriate.
 
In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by ProLogis and AMB, and formed a substantial basis for its opinion. With respect to the financial projections, including information relating to certain strategic, financial and operational benefits anticipated from the transaction, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the respective managements of ProLogis and AMB of the future financial performance of ProLogis and AMB. In addition, Morgan Stanley assumed that the Merger, the contribution and the issuance of AMB LP partnership units will each be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that the ProLogis merger and the Topco merger will each be treated as tax-free reorganizations pursuant to the Code. Morgan Stanley assumed that, in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed transaction, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed transaction. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of ProLogis and AMB and their respective legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of ProLogis’ officers, trustees or employees, or any class of such persons, relative to the consideration to be received by the holders of ProLogis common shares in the transaction. Morgan Stanley also expressed no opinion as to the relative fairness of any portion of the merger consideration to holders of any series of common or preferred shares of ProLogis. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of ProLogis or AMB, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as of, the date of its opinion. Events occurring after the date of Morgan Stanley’s opinion may affect its opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.
 
The following is a brief summary of the material analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion dated January 30, 2011. Although each analysis was provided to the ProLogis board of trustees, in connection with arriving at its opinion, Morgan Stanley considered all of its analysis as a whole and did not attribute any particular weight to any analysis described below. This summary of financial analyses includes information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley’s fairness opinion.
 
Relative Valuation and Leverage
 
Morgan Stanley reviewed the implied relative valuation metrics of ProLogis and AMB based on each company’s closing price as of January 26, 2011, the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the


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companies and each company’s internal forecasts. Morgan Stanley observed that ProLogis and AMB’s valuation multiples were similar based on a variety of metrics. The metrics observed included each company’s January 26, 2011 closing price divided by management’s forecast of 2011 and 2012 FFO and adjusted FFO. Morgan Stanley also evaluated each company’s aggregate value divided by management’s forecast of 2011 EBITDA.
 
Morgan Stanley observed that ProLogis and AMB’s relative valuations were generally similar, and in particular when evaluating FFO and EBITDA multiples. Morgan Stanley also observed the relative leverage of both ProLogis and AMB as evidenced by each company’s debt to total capitalization and debt to estimated 2011 EBITDA. Morgan Stanley noted that AMB was less levered relative to ProLogis based on the leverage metrics evaluated. In addition, Morgan Stanley observed each company’s credit ratings from third party ratings agencies (Moody’s, S&P, and Fitch Ratings). Morgan Stanley observed that Moody’s, S&P, and Fitch each had a higher senior unsecured credit rating assigned to AMB than ProLogis.
 
The following tables list the valuation and leverage metrics, as well as the third party credit ratings observed by Morgan Stanley:
 
Relative Valuation and Leverage Statistics — Financial Figures Based on Management Forecasts
 
                                 
    AMB     ProLogis  
    2011E     2012E     2011E     2012E  
 
Price / FFO
    24.0x       21.6x       23.5x       20.2x  
Price / AFFO
    30.0x       23.5x       24.9x       22.5x  
Aggregate Value/2011 EBITDA
    21.0x             20.4x        
 
                 
    AMB     ProLogis  
 
Debt / 2011 EBITDA
    8.6 x     9.4 x
Debt / Total Capitalization
    41.5 %     50.3 %
Moody’s Senior Unsecured Credit Rating
    Baa1       Baa2  
S&P Senior Unsecured Credit Rating
    BBB       BBB
Fitch Senior Unsecured Credit Rating
    BBB       BB+  
 
Historical Exchange Ratio Analysis
 
Morgan Stanley reviewed the stock price performance and trading volumes of ProLogis and AMB (i) during various periods ending on January 28, 2011, the last full trading day prior to the rendering of Morgan Stanley’s opinion dated January 30, 2011, (ii) on January 28, 2011 and (iii) on January 26, 2011 (the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies).
 
Morgan Stanley then calculated historical exchange ratios on certain dates and during certain periods between August 1, 2010 (180 days prior to January 28, 2011) and January 28, 2011 implied by dividing the AMB closing price for the relevant date, or the average AMB closing price for the relevant period, as the case may be, by the ProLogis closing price for such date, or the ProLogis average price for such period, as the case may be. Morgan


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Stanley next compared the exchange ratio of 0.4464x provided for in the merger agreement with historical exchange ratios for such dates and periods. The following table lists the implied exchange ratios for these dates and periods:
 
         
    Implied Exchange
 
    Ratios  
 
Closing Price on January 26, 2011
    0.447x  
Closing Price on January 28, 2011
    0.462x  
15-Day Average Closing Price
    0.445x  
30-Day Average Closing Price
    0.448x  
60-Day Average Closing Price
    0.447x  
90-Day Average Closing Price
    0.452x  
180-Day Average Closing Price
    0.449x  
Low / High Closing Price for Trading Week Between January 14, 2011 through January 21, 2011
    0.428x/0.452x  
Low / High Price for 30-Day Period (since December 29, 2010)
    0.427x/0.467x  
 
Research Analyst Price Targets and Net Asset Value Analysis
 
Morgan Stanley reviewed public market trading price targets for ProLogis common shares and AMB common stock prepared and published by fourteen available equity research analysts that provided targets for both ProLogis and AMB prior to January 26, 2011 as well as price targets from additional equity research analysts that provided targets for either ProLogis or AMB. Morgan Stanley reviewed the most recent price target published by each analyst prior to such date. These targets reflect each analyst’s estimate of the future public market trading price of ProLogis or AMB common stock, as applicable, at the time the price target was published.
 
Morgan Stanley calculated the exchange ratio implied by each analyst’s price targets for ProLogis and AMB by dividing the ProLogis price target by the AMB price target. With respect to the 14 available equity research analysts that provided price targets for both ProLogis and AMB, Morgan Stanley’s analysis implied a range of exchange ratios of 0.433x to 0.500x based on such price targets (when excluding the two highest and two lowest implied ratios) and a range of exchange ratios of 0.385x to 0.593x (when including all 14 available data points). The average exchange ratio was 0.471x when considering all 14 available equity data points. With respect to the consensus price targets of each company, Morgan Stanley’s analysis implied an average exchange ratio of 0.467x. The consensus price target is available on Bloomberg and incorporates all analysts reporting price targets to


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Bloomberg. Morgan Stanley noted that the merger agreement provided for an exchange ratio of 0.4464x. The table below outlines the price targets used by Morgan Stanley:
 
                         
    PLD   AMB   Ex. Ratio
 
Barclays Capital
  $ 14.00     $ 31.00       0.452  
BofA Merrill Lynch
  $ 16.00     $ 34.00       0.471  
Citi
  $ 14.00     $ 28.00       0.500  
Deutsche Bank
  $ 15.00     $ 29.00       0.517 *
FBR Capital Markets
  $ 16.50     $ 35.00       0.471  
Gleacher & Company
  $ 10.00     $ 26.00       0.385 *
Goldman Sachs & Co. 
  $ 12.00     $ 30.00       0.400 *
ISI Group
  $ 13.00     $ 28.00       0.464  
Jefferies & Co. 
  $ 13.00     $ 28.00       0.464  
JPMorgan
  $ 15.00     $ 30.00       0.500  
Macquarie Research
  $ 13.00     $ 30.00       0.433  
RBC Capital Markets
  $ 16.00     $ 27.00       0.593 *
Stifel Nicolaus
  $ 16.00     $ 34.50       0.464  
UBS (US)
  $ 13.00     $ 27.25       0.477  
Average
                    0.471  
Consensus
  $ 13.99     $ 29.98       0.467  
 
 
* Exchange ratios excluded in calculating implied range.
 
Morgan Stanley also reviewed equity research analyst estimates of net asset value per share for each of ProLogis and AMB. Morgan Stanley reviewed the most recent estimates of net asset value published by analysts prior to January 26, 2011. With respect to the estimates of net asset value by Green Street analysts, who have a reputation for having REIT expertise, Morgan Stanley’s analysis implied an exchange ratio of 0.446x (using Green Street net asset value estimates of $12.50 and $28.00 for ProLogis and AMB, respectively) and with respect to the estimates of net asset value by consensus analysts, Morgan Stanley’s analysis implied an average exchange ratio of 0.480x using consensus net asset values of $13.42 (an average of 7 data points) and $27.95 (an average of 8 data points) for ProLogis and AMB, respectively. The consensus net asset values are available from SNL Financial and incorporate all analysts reporting net asset value estimates to SNL Financial. Morgan Stanley noted that the merger agreement provided for an exchange ratio of 0.4464x.
 
The public market trading price targets and estimates of net asset value per share published by securities research analysts do not necessarily reflect current market trading prices for ProLogis common shares and shares of AMB common stock and these targets and estimates are subject to uncertainties, including the future financial performance of ProLogis and AMB and future financial market conditions.
 
Discounted Cash Flow Analysis
 
Morgan Stanley performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future cash flows and terminal value of the company. Morgan Stanley calculated ranges of implied equity values per share for each of ProLogis and AMB, based on estimates of future cash flows for calendar years 2011 through 2015 prepared by the management of each of ProLogis and AMB, respectively.
 
In arriving at the estimated equity values per ProLogis common share, Morgan Stanley noted the estimated consolidated net operating income for calendar years 2011 through 2015 and then calculated the terminal value by (i) applying a range of terminal capitalization rates ranging from 6.60% to 6.80% with respect to ProLogis’ real estate assets, (ii) applying a range of capitalization rates ranging from 7.10% to 7.30% with respect to net operating income from the real estate portion of ProLogis’ investment management business and (iii) applying a terminal multiple of 11.0x with respect to the operating income from management fees associated with ProLogis’ investment


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management business. The capitalization rates used by Morgan Stanley (i) with respect to ProLogis’ real estate assets were based on Green Street’s implied market capitalization rate based on the price per share of each of ProLogis and AMB on January 26, 2011 (the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies) and (ii) with respect to the real estate portion of ProLogis’ investment management business, was 50 basis points higher than the capitalization rate used with respect to ProLogis’ real estate assets. The terminal multiple used by Morgan Stanley with respect to ProLogis’ investment management business was the midpoint of ProLogis’ range of net cash flow multiples used to value the investment management businesses in ProLogis’ 2010 net asset value analysis. The consolidated net operating income and the terminal value were then discounted to present values using a range of discount rates from 8.3% to 8.8%. The discount rates used by Morgan Stanley were based on the weighted average cost of capital for ProLogis. The cost of equity, a contributor to the weighted average cost of capital, was analyzed using the capital asset pricing model, which is impacted by the relative historical volatility of ProLogis’ share price. Morgan Stanley did not, as a part of its analysis, undertake a separate valuation of the assets or operations of PEPR, ProLogis’ proportionate share thereof, or the income ProLogis otherwise derives from PEPR. Nor were the cash flows attributable to PEPR accorded differential treatment in Morgan Stanley’s analysis. Based on the calculations set forth above, this analysis implied a range for ProLogis common shares of approximately $13.49 to $14.69 per share.
 
In arriving at the estimated equity values per share of AMB common stock, Morgan Stanley noted the estimated consolidated net operating income for calendar years 2011 through 2015 and then calculated the terminal value by (i) applying a range of terminal capitalization rates ranging from 6.10% to 6.30% with respect to AMB’s real estate assets, (ii) applying a range of capitalization rates ranging from 6.60% to 6.80% with respect to net operating income from the real estate portion of AMB’s investment management business and (iii) applying a terminal multiple of 11.0x with respect to the operating income from management fees associated with AMB’s investment management business. The capitalization rates used by Morgan Stanley (i) with respect to AMB’s real estate assets were based on Green Street’s implied market capitalization rate based on the price per share of each of ProLogis and AMB on January 26, 2011 (the last trading day before ProLogis common share and AMB common stock prices may have been affected by market speculation regarding a potential transaction involving the companies) and (ii) with respect to the real estate portion of AMB’s investment management business, was 50 basis points higher than the capitalization rate used with respect to AMB’s real estate assets. The terminal multiple used by Morgan Stanley with respect to AMB’s investment management business was the midpoint of AMB’s range of net cash flow multiples used to value the investment management businesses in AMB’s 2010 net asset value analysis. The consolidated net operating income and the terminal value were then discounted to present values using a range of discount rates from 7.7% to 8.2%. The discount rates used by Morgan Stanley were based on the weighted average cost of capital for AMB. The cost of equity, a contributor to the weighted average cost of capital, was analyzed using the capital asset pricing model, which is impacted by the relative historical volatility of AMB’s share price. Based on the calculations set forth above, this analysis implied a range for AMB common shares of approximately $33.65 to $36.95 per share.
 
Morgan Stanley noted that the discounted cash flow analysis of each of ProLogis and AMB indicated a range of implied exchange ratios of 0.365x to 0.437x, compared to an exchange ratio of 0.4464x provided for in the merger agreement. Morgan Stanley further noted that, using an 8.25% discount rate (which is the approximate midpoint of a shared discount rate), the discounted cash flow analysis of each of ProLogis and AMB indicated a range of implied exchange ratios of 0.385x to 0.461x, compared to an exchange ratio of 0.4464x provided for in the merger agreement.
 
Contribution Analysis
 
Morgan Stanley also performed a contribution analysis which reviewed the pro forma contribution of each of ProLogis and AMB to the combined entity and implied contributions based on certain operational and financial metrics using management plans for both ProLogis and AMB. Such operational and financial metrics included consolidated net operating income (which includes no contributions from unconsolidated joint venture properties), consolidated EBITDA (which includes cash distributions from unconsolidated entities), look through EBITDA (which includes the pro-rata share of EBITDA from unconsolidated entities), consensus EBITDA, consolidated


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FFO, consensus FFO, Green Street net asset value estimates and consensus net asset value estimates. Based on the relative contributions of each company for the unlevered income estimates, Morgan Stanley derived an implied equity contribution for each company by multiplying the cumulative total enterprise value of the two standalone companies by the respective contribution percentages and subtracting net debt attributable to each standalone company. Morgan Stanley also noted the implied exchange ratio derived from the implied equity contributions across the selected metrics. For the unlevered and levered income estimates, Morgan Stanley held the ProLogis share price constant at the closing price on January 26, 2011 when calculating the implied exchange ratio.
 
The computations resulted in the following implied equity contributions and implied exchange ratios:
 
                         
                Implied
 
                Exchange
 
Equity Contribution Analysis
  ProLogis     AMB     Ratio  
 
2011 Unlevered Income Estimates
                       
Consolidated Net Operating Income
    58 %     42 %          0.429x  
Consolidated EBITDA
    61 %     39 %     0.462x  
Look Through EBITDA
    63 %     37 %     0.492x  
Mean Consensus EBITDA
    60 %     40 %     0.452x  
Levered Income Estimates
                       
2011 Consolidated FFO
    60 %     40 %     0.451x  
2011 Consensus FFO
    62 %     38 %     0.476x  
Net Asset Value Estimates
                       
Green Street NAV Estimates
    60 %     40 %     0.446x  
Mean Consensus NAV Estimates
    61 %     39 %     0.480x  
Market Prices
                       
Closing Price on January 26, 2011
    60 %     40 %     0.447x  
Closing Price on January 28, 2011
    60 %     40 %     0.462x  
 
Morgan Stanley noted that the 0.4464 exchange ratio of ProLogis common shares to AMB common stock provided for in the merger agreement would result in pro forma ownership of the combined company for holders of ProLogis common shares equal to approximately 60%.
 
Pro Forma Accretion/Dilution Analysis
 
Using financial projections and estimates of cost savings resulting from the transaction provided by the managements of ProLogis and AMB, Morgan Stanley calculated the accretion/dilution of the FFO per ProLogis common share and the FFO per share of AMB common stock as a result of the transaction. For the year ended December 31, 2012, Morgan Stanley compared the FFO per share of the pro forma entity to the FFO per share estimate of ProLogis and AMB, each as a standalone entity. The analysis indicated that the transaction would be accretive to the FFO per share of each of ProLogis and AMB for calendar year 2012. The accretion to AMB in 2012 is greater on both an absolute and a relative basis when compared to the accretion to ProLogis in 2012 principally due to the underlying assumed growth of FFO per share between 2011 and 2012 for each of the companies. Though the management projections show greater FFO per share growth during this period for ProLogis as compared to AMB, the compound aggregate growth rate for each of AMB and ProLogis is substantially the same over the five-year projection period, which suggests that FFO accretion will be more evenly shared over the longer term. Morgan Stanley evaluated accretion to ProLogis and AMB core FFO. Core FFO is defined as FFO excluding significant non-cash items and non-recurring items, as well as gains or losses from sales of real estate.
 
In performing its analysis, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of ProLogis or AMB. Any estimates contained in Morgan Stanley’s analysis are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by the estimates. These analyses were prepared solely as part of the analysis of Morgan Stanley of the fairness of the exchange ratio pursuant to the


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merger agreement from a financial point of view to the holders of ProLogis common shares and were conducted in connection with the delivery of Morgan Stanley’s opinion to ProLogis’ board of trustees.
 
General
 
In connection with the review of the transaction by the ProLogis board of trustees, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of ProLogis or AMB. In performing its analyses, Morgan Stanley made assumptions with respect to industry performance, general business and economic conditions and other matters. Many of these assumptions relate to factors that are beyond the control of ProLogis or AMB. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.
 
Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness of the exchange ratio pursuant to the merger agreement from a financial point of view to the holders of ProLogis common shares and in connection with the delivery of its opinion to the ProLogis board of trustees. These analyses do not purport to be appraisals or to reflect the prices at which ProLogis common shares or AMB common stock might actually trade.
 
The exchange ratio was determined through arm’s-length negotiations between ProLogis and AMB and was approved by the ProLogis board of trustees. Morgan Stanley provided advice to ProLogis during these negotiations. Morgan Stanley did not, however, recommend any specific exchange ratio to ProLogis or that any specific exchange ratio constituted the only appropriate merger consideration for the transaction. In addition, Morgan Stanley’s opinion did not in any manner address the prices at which the AMB common stock will trade at any time, and Morgan Stanley expressed no opinion or recommendation as to how shareholders of ProLogis or stockholders of AMB should vote at the stockholders’ meetings to be held in connection with the transaction.
 
Morgan Stanley’s opinion and its presentation to the ProLogis board of trustees was one of many factors taken into consideration by the ProLogis board of trustees in deciding to approve the merger agreement. Consequently, the analyses as described above should not be viewed as determinative of the view of the ProLogis board of trustees with respect to the exchange ratio or of whether the ProLogis board of trustees would have been willing to agree to a different exchange ratio. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice.
 
Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Morgan Stanley’s securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of ProLogis, AMB, or any other company, or any currency or commodity, that may be involved in the transaction, or any related derivative instrument.
 
ProLogis retained Morgan Stanley to act as its exclusive financial advisor in connection with the transaction because of its qualifications, expertise and reputation. As compensation for its services, which included advisory services as well as the rendering of a fairness opinion, ProLogis has agreed to pay Morgan Stanley a fee of $20 million in the aggregate, $2 million of which was payable upon execution of the merger agreement and $18 million of which is contingent upon the consummation of the transaction. In addition to the transaction fee, ProLogis may, at its sole discretion, pay Morgan Stanley an additional discretionary fee at closing of $2.5 million, based on ProLogis’ evaluation of the quality and quantity of the work performed by Morgan Stanley in connection with services rendered


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in connection with the transaction. ProLogis has also agreed to reimburse Morgan Stanley for its expenses incurred in performing its services. In addition, ProLogis has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, related to or arising out of Morgan Stanley’s engagement. During the two years preceding the date of its opinion, Morgan Stanley and its affiliates had commercial and investment banking relationships with ProLogis and AMB, for which Morgan Stanley and its affiliates received customary compensation. Morgan Stanley’s services for ProLogis have included: (1) acting as joint bookrunner for ProLogis’ offerings of common shares in April 2009 and October 2010, respectively, (2) acting as joint bookrunner for ProLogis’ offering of debt securities in August 2009, (3) acting as joint bookrunner for ProLogis’ offering of convertible notes in March 2010, (4) acting as dealer manager for ProLogis’ tender offer for certain of its outstanding debt securities in May 2009, (5) acting as a manager for ProLogis’ continuous equity offering program established in March 2010, (6) acting as financial advisor to ProLogis on the sale of its Japan and China portfolios in February 2009, (7) acting as a financial advisor to PEPR, in connection with an asset sale in May 2009 and (8) acting as sole bookrunner for PEPR’s offering of convertible preferred units in December 2009. Morgan Stanley’s services for AMB during such period have included: (1) acting as joint bookrunner for AMB’s offerings of common stock in March 2009 and April 2010, respectively, (2) acting as joint bookrunner for AMB’s offerings of debt securities in November 2009, August 2010 and November 2010, respectively, (3) acting as dealer manager for AMB’s tender offer for certain of its outstanding debt securities in December 2009 and (4) acting as a financial advisor to AMB in connection with the formation of a joint venture in China in March 2011. In addition, Morgan Stanley’s commercial banking affiliate is a lender under certain outstanding credit facilities of AMB, ProLogis and PEPR. Morgan Stanley may also seek to provide such services to AMB and ProLogis in the future and expects to receive fees for the rendering of these services.
 
AMB Unaudited Prospective Financial Information
 
AMB does not as a matter of course make public long-term projections as to future revenues, earnings or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, AMB is including this unaudited prospective financial information that was made available to the AMB board of directors, the ProLogis board of trustees, J.P. Morgan and Morgan Stanley in connection with the evaluation of the Merger. The inclusion of this information should not be regarded as an indication that any of AMB, ProLogis, J.P. Morgan, Morgan Stanley or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results.
 
The unaudited prospective financial information was, in general, prepared solely for internal use and is subjective in many respects. As a result, there can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. AMB stockholders and ProLogis shareholders are urged to review AMB’s SEC filings for a description of risk factors with respect to AMB’s business. See “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information”. The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the similarly titled GAAP measures in AMB’s historical GAAP financial statements. Neither AMB’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The report of AMB’s independent registered public accounting firm contained in AMB’s Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference into this joint proxy statement/prospectus, relates to AMB’s historical financial information. It does not extend to the unaudited prospective financial information and should not be read to do so. Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared.


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The following table presents selected unaudited prospective financial data for the fiscal years ending 2011 through 2015.
 
                                         
    2011     2012     2013     2014     2015  
    ($ in millions)  
 
EBITDA
  $ 468     $ 529     $ 603     $ 692     $ 800  
Core funds from operations (Core FFO)
  $ 238     $ 264     $ 289     $ 364     $ 454  
Adjusted funds from operations (AFFO)
  $ 189     $ 237     $ 256     $ 341     $ 429  
 
For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, EBITDA is calculated as net earnings before gains plus (i) preferred unit distributions, (ii) depreciation and amortization, (iii) non-cash cost of stock-based compensation awards, (iv) consolidated interest expense, (v) income tax expense, (vi) certain other non-cash charges, and (vii) AMB’s pro rata share of EBITDA from unconsolidated joint ventures; less non-controlling interest holders’ share of EBITDA from consolidated joint ventures. For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, Core funds from operations (“Core FFO”) is calculated as operating income less interest expense, preferred share dividends, and other reconciling line items, adjusted for certain non-cash items, non-recurring items, and gains. For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, Adjusted funds from operations (“AFFO”) is calculated as Core FFO less (i) recurring capital expenditures and (ii) pro rata share of straight line rent adjustments (FAS 13); plus (i) amortized deferred financing costs and (ii) non-cash cost of stock-based compensation awards.
 
In addition to the summary metrics presented above, AMB also provided a 2011 estimate of net operating income of $442 million. For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, net operating income represents consolidated rental revenues less consolidated property operating expenses. In addition to the summary metrics presented above, AMB also provided an estimate of gross dividends per year for each year between 2011 through 2015. The estimate provided by AMB for each of 2011, 2012, 2013, 2014 and 2015 was $193 million, $213 million, $235 million, $271 million and $309 million, respectively.
 
ProLogis and AMB calculate certain non-GAAP financial metrics including EBITDA, AFFO and NOI using different methodologies. The differences relate to the following categories: (i) treatment of each company’s share of income and cash flow from joint ventures and other unconsolidated investments (ii) treatment of minority interest share of consolidated income and cash flow; and (iii) definitional differences related to certain adjustments made to calculate AFFO. AMB has made conforming methodology changes to the financial data received from ProLogis. Consequently, the financial metrics presented in each company’s prospective financial information disclosures and in the sections of this joint proxy statement/prospectus with respect to the opinions of the financial advisors to AMB and ProLogis may not be directly comparable to one another.
 
In preparing the foregoing unaudited projected financial information, AMB made a number of assumptions regarding, among other things, interest rates, corporate financing activities, including amount and timing of the issuance of senior and secured debt, AMB common stock price appreciation and the timing and amount of common stock issuances, annual dividend levels, occupancy and customer retention levels of its owned and managed portfolios, changes in rent, the amount, timing and cost of existing and planned developments, lease-up rates of existing and planned developments, the amount and timing of asset sales and asset acquisitions, including the return on such acquisitions, the formation of, and expected terms of, including yield on, future fund formations, the amount of income taxes paid, and the amount of general and administrative costs.
 
No assurances can be given that the assumptions made in preparing the above unaudited prospective financial information will accurately reflect future conditions. The estimates and assumptions underlying the unaudited prospective financial information involve judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions which may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among others, risks and uncertainties described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements”, all of which are difficult to predict and many of which are beyond the control of AMB and/or ProLogis and will be beyond the control of the combined company. There can be


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no assurance that the underlying assumptions will prove to be accurate or that the projected results will be realized, and actual results likely will differ, and may differ materially, from those reflected in the unaudited prospective financial information, whether or not the Merger is completed.
 
In addition, although presented with numerical specificity, the above unaudited prospective financial information reflects numerous assumptions and estimates as to future events made by AMB management that AMB management believed were reasonable at the time the unaudited prospective financial information was prepared. The above unaudited prospective financial information does not give effect to the Merger. AMB stockholders and ProLogis shareholders are urged to review AMB’s most recent SEC filings for a description of AMB’s reported and anticipated results of operations and financial condition and capital resources during 2010, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in AMB’s Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference into this joint proxy statement/prospectus.
 
Readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on the unaudited prospective financial information set forth above. No representation is made by AMB, ProLogis or any other person to any AMB stockholder or any ProLogis shareholder regarding the ultimate performance of AMB compared to the information included in the above unaudited prospective financial information. The inclusion of unaudited prospective financial information in this joint proxy statement/prospectus should not be regarded as an indication that such prospective financial information will be an accurate prediction of future events, and such information should not be relied on as such.
 
AMB DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE ABOVE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH PROSPECTIVE FINANCIAL INFORMATION ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY LAW.
 
ProLogis Unaudited Prospective Financial Information
 
ProLogis does not as a matter of course make public long-term projections as to future revenues, earnings or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, ProLogis is including this unaudited prospective financial information that was made available to the ProLogis board of trustees, the AMB board of directors, J.P. Morgan and Morgan Stanley in connection with the evaluation of the Merger. The inclusion of this information should not be regarded as an indication that any of ProLogis, AMB, J.P. Morgan, Morgan Stanley or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results.
 
The unaudited prospective financial information was, in general, prepared solely for internal use and is subjective in many respects. As a result, there can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year. AMB stockholders and ProLogis shareholders are urged to review the SEC filings of ProLogis for a description of risk factors with respect to the business of ProLogis. See “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information.” The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or GAAP. Neither the independent registered public accounting firm of ProLogis, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The report of the independent registered public accounting firm of ProLogis contained in the Annual Report of ProLogis on Form 10-K for the year ended December 31, 2010, which is incorporated by reference into this joint proxy statement/prospectus, relates to the historical financial information of ProLogis. It does not extend to the unaudited prospective financial information and should not be read to do so. Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared.


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The following table presents selected unaudited prospective financial data for the fiscal years ending 2011 through 2015.
 
                                         
    2011     2012     2013     2014     2015  
    ($ in millions)  
 
EBITDA
  $ 749     $ 747     $ 810     $ 857     $ 904  
Core funds from operations (Core FFO)
  $ 359     $ 417     $ 494     $ 537     $ 608  
Adjusted funds from operations (AFFO)
  $ 339     $ 376     $ 433     $ 471     $ 541  
 
For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, EBITDA is calculated as net earnings plus (i) depreciation and amortization (ii) non-cash cost of share based compensation awards (iii) consolidated interest expense (iv) income tax expense (v) preferred dividends and net earnings attributable to non-controlling interests, and (vi) changes in operating receivables and distributions from unconsolidated funds, CDFS JV’s and unconsolidated investees; less (i) gains on dispositions of non-development properties, and (ii) equity in earnings from unconsolidated property funds, CDFS joint ventures, and other unconsolidated investees.
 
For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, core funds from operations is calculated as operating income less interest expense, preferred share dividends, and other reconciling line items, adjusted for non-cash items, non-recurring items, and gains. Adjusted funds from operations is calculated as core funds from operations plus (i) corporate depreciation, (ii) non-cash interest expense, (iii) non-cash convertible interest expense and (iv) non-cash cost of share based compensation awards; less (i) straight line rent adjustments (FAS 13), (ii) recurring tenant improvements and leasing commissions and (iii) recurring capital expenditures.
 
In addition to the summary metrics presented above, ProLogis also provided a 2011 estimate of net operating income of $609 million. For purposes of the unaudited prospective financial information provided to J.P. Morgan and Morgan Stanley and presented herein, net operating income represents ProLogis’ share of consolidated income statement rental income less consolidated income statement rental expenses.
 
ProLogis and AMB calculate certain non-GAAP financial metrics including EBITDA, AFFO and NOI using different methodologies. The differences relate to the following categories: (i) treatment of each company’s share of income and cash flow from joint ventures and other unconsolidated investments (ii) treatment of minority interest share of consolidated income and cash flow; and (iii) definitional differences related to certain adjustments made to calculate AFFO. ProLogis has made conforming methodology changes to the financial data received from AMB. Consequently, the financial metrics presented in each company’s prospective financial information disclosures and in the sections of this joint proxy statement/prospectus with respect to the opinions of the financial advisors to AMB and ProLogis may not be directly comparable to one another.
 
In preparing the foregoing unaudited projected financial information, ProLogis made a number of assumptions regarding, among other things, interest rates, corporate financing activities, including amount and timing of the issuance of senior and secured debt, ProLogis common share price appreciation and the timing and amount of common share issuances, annual dividend levels, occupancy and customer retention levels of its owned and managed portfolios, changes in rent, the amount, timing and cost of existing and planned developments, lease-up rates of existing and planned developments, the amount and timing of asset sales and asset acquisitions, including the return on such acquisitions, the formation of, and expected terms of, including yield on, future fund formations, the amount of income taxes paid, and the amount of general and administrative costs.
 
No assurances can be given that the assumptions made in preparing the above unaudited prospective financial information will accurately reflect future conditions. The estimates and assumptions underlying the unaudited prospective financial information involve judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions which may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among others, risks and uncertainties described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” all of which are difficult to predict and many of which are beyond the control of AMB and/or ProLogis and will be beyond the control of the combined company. There can be


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no assurance that the underlying assumptions will prove to be accurate or that the projected results will be realized, and actual results likely will differ, and may differ materially, from those reflected in the unaudited prospective financial information, whether or not the Merger is completed.
 
In addition, although presented with numerical specificity, the above unaudited prospective financial information reflects numerous assumptions and estimates as to future events made by the management of ProLogis that the management of ProLogis believed were reasonable at the time the unaudited prospective financial information was prepared. The above unaudited prospective financial information does not give effect to the Merger. AMB stockholders and ProLogis shareholders are urged to review the most recent SEC filings of ProLogis for a description of the reported and anticipated results of operations and financial condition and capital resources of ProLogis during 2010.
 
Readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on the unaudited prospective financial information set forth above. No representation is made by AMB, ProLogis or any other person to any AMB stockholder or any ProLogis shareholder regarding the ultimate performance of ProLogis compared to the information included in the above unaudited prospective financial information. The inclusion of unaudited prospective financial information in this joint proxy statement/prospectus should not be regarded as an indication that such prospective financial information will be an accurate prediction of future events, and such information should not be relied on as such.
 
PROLOGIS DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE ABOVE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH PROSPECTIVE FINANCIAL INFORMATION ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY LAW.
 
Pro Forma Operational Data of the Combined Company
 
The combined company will be named “ProLogis, Inc.” and will be a Maryland corporation that is a self-administered and self-managed REIT for U.S. federal income tax purposes. The combined company is expected to be a leading global owner, operator and developer of industrial real estate. The combined company is expected to have a pro forma equity market capitalization of approximately $14 billion, a total market capitalization in excess of $24 billion and gross assets owned and managed of approximately $46 billion. The combined company will own or manage approximately 600 million square feet (approximately 55 million square meters) of modern distribution facilities located in key gateway markets and logistics corridors in 22 countries.
 
The geographic distribution of the combined company’s real estate is expected to be as set forth in the table below upon the closing of the Merger:
 
                 
    Square Feet     AUM(2)  
          (U.S. dollars, in billions)  
    (In millions)(1)        
 
The Americas
    423     $ 28  
Europe
    145     $ 13  
Asia
    30     $ 5  
                 
Total
    598     $ 46  
 
 
(1) Represents owned/managed real estate at 100% share.
 
(2) Defined as gross book value of owned/managed properties.


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The largest customers of the combined company by annualized base rent, on an owned and managed basis, are expected to be as set forth in the table below upon the closing of the Merger:
 
         
    Percentage of
 
    Combined Annualized
 
    Base Rent(1)  
 
Deusche Post World Net (DHL)
    2.6 %
Kuehne + Nagel
    1.2 %
Home Depot
    1.1 %
CEVA Logistics
    1.0 %
Unilever
    0.8 %
SNCF
    0.7 %
United States Government
    0.7 %
Sagawa Express
    0.7 %
Wincanton Logistics
    0.6 %
Nippon Express
    0.5 %
Top 10 customers
    9.9 %
 
 
(1) Annualized base rent is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2010 and including contractual rent escalations multiplied by 12, excluding any free rent periods.
 
The lease expirations for the combined company’s owned and managed operating properties for leases in place as of December 31, 2010, without giving effect to the exercise of renewal options or termination rights, if any, at or prior to the scheduled expirations, is expected to be as set forth in the table below upon the closing of the Merger:
 
                 
          Annualized Base
 
    Square Feet(1)     Rent(2)  
    (In millions)     (U.S. dollars, in thousands)  
 
2011
    77     $ 382,375  
2012
    85       445,723  
2013
    75       410,092  
2014
    62       341,774  
2015
    64       349,860  
                 
Total
    363     $ 1,929,824  
 
 
(1) Schedule includes leases that expire on or after December 31, 2010. Schedule includes owned and managed operating properties which are defined as properties in which the combined company has at least a 10% ownership interest, for which it is the property or asset manager, and which the company currently intends to hold for the long term.
 
(2) Annualized base rent is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2010 and including contractual rent escalations, multiplied by 12, excluding any free rent periods.
 
Interests of AMB Directors and Executive Officers in the Merger
 
In considering the recommendation of the AMB board of directors that AMB stockholders vote on the approval of the Topco merger (including the issuance of AMB common stock and preferred stock to ProLogis shareholders in connection with the Topco merger), AMB stockholders should be aware that some of the executive officers and directors of AMB may have interests in the Topco merger that are different from, or in addition to, those of the stockholders of AMB, generally. The AMB board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and making its recommendations that the AMB stockholders approve the Topco merger. For purposes of all of the AMB agreements and plans described below, the completion of the transactions contemplated by the merger agreement will constitute a change in control of AMB.
 
Following the consummation of the Merger, Mr. Hamid R. Moghadam, Ms. Lydia H. Kennard, Mr. J. Michael Losh, Mr. Jeffrey L. Skelton and Mr. Carl B. Webb, each of whom is currently a member of the AMB board of directors, will be elected to the board of directors of the combined company.


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Change in Control and Noncompetition Agreements
 
AMB LP has previously entered into Amended and Restated Change in Control and Noncompetition Agreements with each of AMB’s executive officers (Mr. Hamid R. Moghadam, Mr. Thomas S. Olinger, Mr. Guy F. Jaquier, and Mr. Eugene F. Reilly). On January 30, 2011, AMB LP entered into letter agreements with each of AMB’s executive officers which, conditioned upon and effective as of the consummation of the Topco merger, amend those agreements (we refer to such amended agreements as the “CIC agreements”). The general purpose of such amendments was to provide that the vesting of equity awards held by the AMB executive officers would accelerate only upon a severance-qualifying termination following a change in control (instead of immediate acceleration following the change in control). The CIC agreements have terms that renew annually unless either party provides notice of intent not to renew. In the event of a change in control of AMB, such as the Topco merger, the term of the CIC agreement automatically extends until 24 months after the date of such change in control. In the event of a subsequent change in control that occurs within the 24 month period following the consummation of the Topco merger, the term of the CIC agreements will extend for a period of 24 months beginning on the date of any such change in control.
 
If, during the term of the CIC agreement and within 24 months following a change in control, such as the Topco merger, an executive officer’s employment is terminated by AMB for any reason other than “cause,” death, “disability” or retirement, or if the executive officer resigns for “good reason” (each as defined under the CIC Agreement and referred to as a “severance-qualifying termination”), the executive officer is entitled to the following (in addition to accrued but unpaid compensation and benefits): (i) a lump-sum severance amount equal to two times the sum of the executive officer’s (x) annual base salary and (y) average annual bonus received by the executive officer over the three most recent years preceding his termination of employment; (ii) for 24 months or the earlier expiration of the executive officer’s COBRA continuation coverage, reimbursement for COBRA premiums and life insurance coverage for the executive officer and his eligible dependents and (iii) a lump-sum cash payment of two times the matching or profit sharing contributions to which the executive officer would have been entitled under AMB’s 401(k) Plan for the year of termination. In the event that any payments or benefits made to the executive officer would be subject to the excise tax imposed by Section 4999 of the Code, the executive officer would receive an additional payment such that he would be placed in the same after-tax position as if no excise tax had been imposed.
 
For the purposes of the CIC agreements, “good reason” generally means any material diminution or reduction in the executive officer’s position, authority, duties, responsibilities or annual base compensation, an involuntary relocation, a failure of AMB to continue the executive officer’s participation, on a basis not materially less favorable, in any material compensation or benefit plan in which the executive officer was eligible to participate prior to the change in control (other than an equity-based plan), a material diminution in the authority, duties or responsibilities of the supervisor to whom the executive officer reports or any other action that constitutes a material breach of the CIC agreement, except that (i) Mr. Moghadam’s position as co-chief executive officer of the combined company with Mr. Walter C. Rakowich, until the earlier of (x) Mr. Rakowich’s retirement or other termination of employment or (y) January 1, 2013 and (ii) Mr. Olinger’s position as Chief Integration Officer of the combined company until the earlier of (x) Mr. William E. Sullivan’s retirement or other termination of employment or (y) January 1, 2013, in each case will not constitute “good reason” under their respective CIC agreements.
 
On January 30, 2011, AMB and each of Mr. Moghadam and Mr. Olinger entered into letter agreements which further provide that Mr. Moghadam will become the sole chief executive officer of the combined company and Mr. Olinger will become the chief financial officer of the combined company, in each case no later than January 1, 2013.
 
As provided in the merger agreement, in connection with the Topco merger, AMB may grant 20,000 shares of restricted stock to each of Mr. Olinger, Mr. Jaquier and Mr. Reilly.
 
Based on compensation and benefit levels in effect on April 6, 2011, and assuming that the Topco merger was completed on April 6, 2011 and, immediately thereafter, each executive officer incurs a severance-qualifying termination, each of Mr. Moghadam, Mr. Olinger, Mr. Jaquier and Mr. Reilly would be entitled to receive $6,673,119, $1,778,457, $2,014,046, and $2,078,713, respectively, in cash severance payments under their CIC


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agreements (including the COBRA and life insurance premium reimbursement described above for the maximum available period).
 
Equity Compensation Awards
 
Each of the CIC agreements provides that upon a severance-qualifying termination or a termination of the executive officer’s employment due to death or “disability,” in each case during the two-year period following the consummation of the Topco merger, all equity or equity-based awards then held by the applicable executive officer and which also have been held by the executive officer at the time of the Topco merger will vest and all restrictions will lapse.
 
Based on AMB equity compensation holdings as of April 6, 2011, and assuming that the Topco merger was completed on April 6, 2011 and, immediately thereafter, each executive officer incurs a severance-qualifying termination, as to Mr. Moghadam, Mr. Olinger, Mr. Jaquier and Mr. Reilly, (1) the number of options to purchase AMB common stock that would vest in connection with such severance-qualifying termination is 588,848, 34,265, 162,899 and 56,456, respectively, and (2) the number of shares of restricted stock that would vest in connection with such severance-qualifying termination is 140,486, 56,647, 85,921 and 117,065, respectively.
 
AMB Deferred Compensation Plans
 
AMB currently maintains two deferred compensation plans for its executive officers and non-employee directors: the Amended and Restated 2005 Non-Qualified Deferred Compensation Plan (which we refer to as the “2005 Plan”) and the Amended and Restated 2002 Nonqualified Deferred Compensation Plan (which we refer to as the “2002 Plan”). Each of the executive officers, with the exception of Mr. Reilly, participates in one or both of the deferred compensation plans. Both the 2005 Plan and the 2002 Plan provide that upon a change in control of AMB, such as the Topco merger, participants will receive a lump-sum payment equal to his or her vested account balance. Payments under the 2005 Plan are required to be made as soon as possible after the change in control but in no event later than the later of (i) December 31 of the calendar year in which the change in control occurs or (ii) the 15th day of the third month following the date of the change in control. Payments of vested account balances under the 2002 Plan, which are treated as “grandfathered” for purposes of Section 409A of the Code, are required to be made immediately prior to the change in control unless the administrator of such plan determines, in its sole discretion, to defer payment for a period of up to 13 months after the change in control.
 
AMB 2011 Supplemental Non-Qualified Deferred Compensation Plan
 
On January 30, 2011, the AMB board of directors adopted the new NQDC Plan, conditioned upon and effective as of the consummation of the Topco merger. The purpose of the new NQDC Plan is to provide the opportunity for participants in the 2002 Plan and the 2005 Plan (which we collectively referred to as the “old NQDC Plans”) to continue to receive tax-deferred earnings with respect to the shares or cash withheld to pay taxes as a result of the required, non-waivable, distributions from the old NQDC Plans which will be triggered by the consummation of the Topco merger, as described above. These grants would not make participants whole for taxes paid on the required distributions; the intent is to compensate the executives for the fact that those taxes will be paid earlier than both they and AMB anticipated when deferrals under the old NQDC Plans were made.
 
Each participant in the old NQDC Plans who remains employed (or, as to non-employee director participants, a member of the combined company’s board) immediately following the consummation of the Topco merger will receive an opening grant under the new NQDC Plan at that time. The base amount of the grant (i.e., the amount on which the value of the award will be determined) will equal the taxes paid on distributions paid due to the consummation of the Topco merger under the old NQDC Plans. These grants will be in the form of combined company stock units or cash credits to match the form of each participant’s deemed investment under the old NQDC Plans. Dividend equivalents on stock units held in the new NQDC Plan will be deemed reinvested in additional stock units or directed to other investments, at the participant’s election. Each stock unit will entitle the applicable participant to a distribution at a future date (selected by the participant in accordance with Section 409A of the Code) of a number of shares of the stock of the combined company equal to: (i) with respect to the stock units credited at closing, (x) the increase, if any, in the value of a share of combined company stock after the closing,


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divided by (y) the value of a share of combined company stock on the distribution date, plus (ii) the total number of stock units credited to such participant’s account in respect of dividend equivalents. If a participant is credited with a notional cash balance under the new NQDC Plan as of the consummation of the Topco merger, the participant will receive the notional earnings (if any) on that cash balance at distribution. A trust (commonly known as a “rabbi trust”) will be created to hold shares of combined company stock and cash reflecting the opening account balances of stock units and cash, respectively, in the new NQDC Plan, and the accretions thereon. The participants in the new NQDC Plan will be entitled to direct the plan trustee on how to vote the shares held in the trust on a pro rata basis.
 
Assuming an aggregate state and federal tax rate of 45%, based on the aggregate account balance of each of Mr. Moghadam, Mr. Olinger, Mr. Jaquier and the two non-employee directors (as a group), under the old NQDC Plans as of April 8, 2011, the opening grant of each such executive officer and the two non-employee directors (as a group), in the new NQDC Plan will be $27,678,084, $132,806, $2,393,871 and $451,483, respectively. Each participant will have the right to vote the shares of stock of the combined company held in the trust relating to the new NQDC Plan in proportion to the stock units credited to the participant’s account.
 
Interests of ProLogis Trustees and Executive Officers in the Merger
 
In considering the recommendation of the ProLogis board of trustees that ProLogis shareholders vote in favor of the merger agreement and the transactions contemplated thereby, including the ProLogis merger and the Topco merger, ProLogis shareholders should be aware that some of the executive officers and trustees of ProLogis may have interests in the Merger that are different from, or in addition to, those of the shareholders of ProLogis, generally. The ProLogis board of trustees was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and the Merger, in approving the merger agreement and in recommending that the ProLogis shareholders approve the Merger.
 
Following the consummation of the Merger, six persons selected by ProLogis will be elected to the board of directors of the combined company. One of those persons will be the ProLogis chief executive officer, Mr. Walter C. Rakowich, who will also become the co-chief executive officer and chairman of the executive committee of the board of directors of the combined company, and another will be Mr. Irving F. Lyons III, a current member of the board of trustees of ProLogis, who will become the lead independent director of the combined corporation. Three of the remaining four persons selected by ProLogis (Mr. George L. Fotiades, Ms. Christine Garvey and Mr. D. Michael Steuert) are current members of the ProLogis board of trustees.
 
Employment and Executive Protection Agreements
 
Employment Agreement with Walter C. Rakowich
 
Mr. Rakowich and ProLogis are currently parties to a Third Amended and Restated Employment Agreement dated as of January 7, 2009 which provides Mr. Rakowich with payments and benefits if his employment is terminated under certain circumstances (which we refer to as the “Current Agreement”). On January 30, 2011, Mr. Rakowich entered into an agreement with ProLogis pursuant to which he waived any right that he would have to terminate employment with ProLogis and receive payments and benefits under the terms of the Current Agreement solely because he will be the co-chief executive officer the combined company following the Topco merger. Mr. Rakowich’s Current Agreement otherwise remains in effect and will expire by its terms on December 31, 2011, subject to earlier termination in accordance with its terms. ProLogis may also pay Mr. Rakowich up to $20,000 to reimburse him for legal fees incurred in preparation and negotiation of his new employment agreement.
 
On January 30, 2011, Mr. Rakowich entered into a new employment agreement with ProLogis (which we refer to as the “New Agreement”) which will become effective on January 1, 2012, provided that the Topco merger has occurred by that date and provided that he is still employed on that date, and which will expire on December 31, 2012, subject to earlier termination in accordance with its terms. The New Agreement generally provides that he will provide services as the co-chief executive officer of the combined company and will be primarily responsible for integration of the real estate portfolios, as well as for operations, dispositions, capital deployment and risk management following the Topco merger. The New Agreement provides that, for 2012, Mr. Rakowich will receive:
 
  •  an annual base salary of $1,000,000;


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  •  a target bonus equal to 150% of his salary, with an actual bonus, generally conditioned upon satisfaction of performance criteria, of not less than zero or more than 200% of the target bonus;
 
  •  a target incentive award having an aggregate value of $4,800,000, with an actual incentive award, generally conditioned upon satisfaction of performance criteria, of not less than 60% and not more than 160% of the target incentive award; and
 
  •  participation in standard benefit plans.
 
Certain performance payments are subject to “claw-back” in the event of material modifications or material restatements of the combined company’s financial statements. Mr. Rakowich is also entitled to coverage under the combined company’s directors and officers insurance and to indemnification on the same basis as under his existing employment agreement with ProLogis.
 
If Mr. Rakowich’s employment terminates during the term of the New Agreement for any reason, he will be entitled to payments of accrued salary and vacation, bonuses for prior periods and payments to which he is entitled under applicable benefit plans (which we refer to as the “Accrued Benefits”).
 
If his employment is terminated during the term of the New Agreement by the combined company for cause (as defined in the New Agreement) or if he terminates other than for good reason (as defined in the New Agreement), he will not be entitled to any payments or benefits other than the Accrued Benefits.
 
If his employment terminates during the term of the New Agreement due to death or disability, he will be entitled to a bonus for the year of termination based on actual performance for that year and pro-rated through the date of termination and a pro-rata portion of the Target Incentive Award for that year (without regard to satisfaction of performance criteria). He will also be fully vested in any incentive awards awarded for prior periods, subject to satisfaction of applicable performance criteria.
 
If his employment is terminated during the term of the New Agreement by the combined company other than for cause or if he resigns for good reason (each as defined under the New Agreement) or upon expiration of the term of the New Agreement, he will be entitled to:
 
  •  his salary through the end of 2012;
 
  •  $6,000,000;
 
  •  his target bonus (provided that his employment does not terminate as the result of the expiration of the term of the New Agreement); and
 
  •  continuing medical benefits through December 31, 2014 (subject to earlier termination if he becomes eligible to receive comparable benefits through other employment).
 
The foregoing payments will generally be paid in installments over two years following the termination and are conditioned upon Mr. Rakowich’s compliance with restrictive covenants, including a non-compete and non-solicitation provision. Also under such termination circumstances described in the preceding paragraph, Mr. Rakowich will be entitled to:
 
  •  a lump sum payment of $12,000 in lieu of certain welfare benefits;
 
  •  vesting and payment of the incentive award to which he would otherwise be entitled for 2012 (and if the incentive award for 2011 has not then been granted, the incentive award for 2011), based on actual performance for the applicable period without pro-ration, such payment to be made to Mr. Rakowich at the same time as incentive awards for the applicable period are otherwise provided to similarly situated corporate-level executives; and
 
  •  vesting of incentive awards for prior periods subject to satisfaction of any performance conditions without pro-ration.
 
Termination payments and benefits are generally conditioned upon Mr. Rakowich’s release of claims.


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The New Agreement also provides that if Mr. Rakowich’s employment is terminated prior to January 1, 2012 under circumstances that would have entitled him to the foregoing termination benefits under the New Agreement had he been employed on January 1, 2012, he will be entitled to a payment equal to $7,300,000, payable in a lump sum no later than March 15, 2012, in addition to payments and benefits, if any, to which he is entitled under the Current Agreement.
 
The New Agreement also provides that Mr. Rakowich will be subject to confidentiality, non-competition and non-solicitation restrictions during his employment and for a period thereafter and that he may be entitled to certain reimbursement and advancement of costs he incurs in enforcing the agreement.
 
The New Agreement, as well as the Current Agreement, will be assumed by the combined company at the time of the Topco merger.
 
Executive Protection Agreements with Edward S. Nekritz and William E. Sullivan
 
ProLogis is currently party to Executive Protection Agreements with each of Mr. Edward S. Nekritz and Mr. William F. Sullivan. The Executive Protection Agreements for Mr. Nekritz and Mr. Sullivan generally provide that, for a period of 24 months following a change of control, the executive is entitled to an annual salary that is not less than that provided prior to such period, minimum bonus requirements and participation in incentive compensation and employee benefit plans. Prior to the amendments described below, the Executive Protection Agreements with Mr. Nekritz and Mr. Sullivan provide that if the executive officer’s employment is terminated by ProLogis for any reason other than death, “Disability” or “Cause,” or if the executive officer resigns as a result of a “Constructive Discharge” (each as defined under the Executive Protection Agreement and referred to as a “qualifying termination”), in each case during the 24-month period following a change of control, the executive officer is entitled to the following (in addition to accrued but unpaid compensation): (i) a pro rata bonus payable for the performance period in which the qualifying termination occurs, with payment based on achievement of a target level of performance for the period (regardless of actual performance for the period), (ii) a lump sum severance amount equal to two times the sum of the executive’s (x) annual base salary and (y) target level of annual bonus for the fiscal year in which the qualifying termination occurs; (iii) for 24 months following the qualifying termination, continued medical and life insurance coverage for the executive officer and his dependents, (iv) outplacement services for up to twelve months following the qualifying termination, and (v) full vesting in the executive officer’s interest in ProLogis’ nonqualified savings plan. In addition, all outstanding equity or equity-based awards held by the executive officer will vest and become exercisable or payable. In the event that any payments or benefits made to the executive officer would be subject to the excise tax imposed by Section 4999 of the Code, the executive officer would receive an additional payment such that he would be placed in the same after-tax position as if no excise tax had been imposed; provided, however, that if a reduction in such payments to an amount that is not less than 90% of the value of the payments would result in no excise tax under Section 4999 of the Code, the payments shall be reduced in accordance with the terms of the Executive Protection Agreement to the extent required to avoid the excise tax.
 
For purposes of the Executive Protection Agreements for Mr. Nekritz and Mr. Sullivan, a “Constructive Discharge” would occur if the executive terminated employment for “good reason.” Good reason is generally defined for this purpose to mean a substantial adverse alteration in the nature of the executive officer’s status or responsibilities, a material failure to provide the executive officer with compensation and benefits in accordance with the agreement or ProLogis’ material breach of the agreement. The Executive Protection Agreements with Mr. Nekritz and Mr. Sullivan were amended, conditioned upon the Topco merger, to provide that the consummation of the Topco merger will be deemed to be a change in control for purposes of their Executive Protection Agreements, and to make other changes described below, although no payments will be made under such agreements unless there is a qualifying termination event during the term. In the case of Mr. Sullivan, the term of the Executive Protection Agreement as amended, ends on December 31, 2012. In the case of Mr. Nekritz, the term of the agreement as amended, extends for a period of two years following the Topco merger; provided, however, that if a subsequent change in control (as defined in the Executive Protection Agreements) occurs within the two-year term commencing at the effective time of the Topco merger, the term will be extended for an additional two-year period beginning with the date of any such subsequent change in control.


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The amendment to the Executive Protection Agreement for Mr. Nekritz broadens the circumstances under which Mr. Nekritz may terminate his employment during the term of the agreement and receive benefits under the agreement to include a relocation from the current ProLogis headquarters location and certain reductions in pay. The amendment to Mr. Sullivan’s agreement acknowledges that he will receive benefits under the agreement if he terminates his employment upon at least 30 days’ advance notice following the effective date of the Topco merger and ending on December 31, 2012. Finally, the amendments provide that even though all outstanding equity awards held by the covered executive officer at the time of termination would otherwise vest upon a qualifying termination, with respect to awards that are made in connection with the Topco merger that vest ratably over three years, the executive officer will receive a pro-rata portion of the tranche that would otherwise vest in the year of termination based on the time elapsed since the last vesting date.
 
The combined company is required to assume all rights, powers, duties and obligations of ProLogis under the Executive Protection Agreements at the effective time of the Topco merger. All other terms and conditions of the Executive Protection Agreements remain in effect.
 
Based on compensation and benefit levels in effect on April 6, 2011, and assuming that the Merger was completed on April 6, 2011 and, immediately thereafter, each executive officer incurs a severance-qualifying termination, each of Mr. Rakowich, Mr. Sullivan and Mr. Nekritz will be entitled to receive $15,810,630, $2,654,690 and $2,414,384, respectively, in cash severance payments under their employment or executive protection agreements, as applicable (not including the value of certain medical, dental and life insurance benefits and outplacement services estimated to be $25,840, $30,770 and $35,200, respectively).
 
Employment Agreement with Mr. Antenucci
 
Mr. Antenucci is not party to an Executive Protection Agreement with ProLogis. Although he is a party to an employment agreement with ProLogis pursuant to which he may be entitled to severance payments and benefits under certain circumstances, Mr. Antenucci’s employment with ProLogis will terminate no later than June 30, 2011 under circumstances unrelated to the consummation of the Merger, and as such, any severance payments or benefits that he may be entitled to receive, if applicable, are not related to, or contingent upon, the Merger.
 
Equity Compensation Awards
 
As mentioned above, each of the agreements provides that upon a qualifying termination, certain equity and equity-based incentive awards will become fully vested. In addition, in connection with the Topco merger, Mr. Nekritz will receive 75,000 restricted share unit awards from ProLogis.
 
Based on ProLogis equity compensation holdings as of April 6, 2011, and assuming that the Merger was completed on April 6, 2011 and, immediately thereafter, each executive officer incurs a qualifying termination which results in full vesting of his equity or equity-based incentive awards, as to Mr. Rakowich, Mr. Sullivan and Mr. Nekritz (i) the number of options to purchase ProLogis common shares that would vest in connection with such severance-qualifying termination is 0, 198,453 and 130,476, respectively and (ii) the number of restricted share units that would vest in connection with such qualifying termination is 0, 268,986 and 208,700, respectively, and (iii) the number of performance shares and accrued dividend equivalents that would vest in connection with such qualifying termination is 0, 88,527 and 46,780, respectively. Mr. Rakowich’s equity or equity-based incentive awards (options to acquire 145,081 common shares, 470,988 restricted share units and accrued dividend equivalents and 334,722 performance shares and accrued dividend equivalents) will continue to vest in accordance with their original vesting schedule.
 
Directors and Management Following the Merger
 
Initial Board Composition
 
Following the consummation of the Merger, the board of directors of the combined company will have eleven members, consisting of (i) Mr. Hamid R. Moghadam, the current chief executive officer of AMB; (ii) Mr. Walter C. Rakowich, the current chief executive officer of ProLogis; (iii) Ms. Lydia H. Kennard, Mr. J. Michael Losh, Mr. Jeffrey Skelton and Mr. Carl B. Webb, each of whom was selected by the AMB board of directors and is currently a member of the AMB board of directors; and (iv) Mr. Irving F. Lyons III, Mr. George L. Fotiades, Ms. Christine Garvey, Mr. D.


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Michael Steuert and Mr. William D. Zollars, each of whom were selected by the ProLogis board of trustees and each of whom (other than Mr. Zollars) is currently a member of the ProLogis board of trustees.
 
Mr. Moghadam will become the chairman of the board of the combined company (which will not be an executive officer position at the combined company), Mr. Rakowich will become the chairman of the executive committee of the board, and Mr. Lyons will become the lead independent director.
 
Mr. Zollars, age 63, was a trustee of ProLogis from June 2001 to May 2010. Mr. Zollars has been the chairman of the board and chief executive officer of YRC Worldwide Inc., a holding company specializing in the transportation of industrial, commercial, and retail goods, since November 1999. Mr. Zollars is a director of Cerner Corporation (computer integrated systems design) and CIGNA Corporation (hospital and medical service plans).
 
Board Committees
 
The board of directors of the combined company will have four committees, consisting of an audit committee, a compensation committee, an executive committee, and a nominating & governance committee (which will include in its charter the current responsibilities of the corporate responsibility committee of ProLogis). Mr. Losh (chair), Ms. Garvey and Mr. Steuert will serve as members of the audit committee, Mr. Fotiades (chair), Mr. Webb and Mr. Zollars will serve as members of the compensation committee, Mr. Rakowich (chair), Mr. Lyons, Mr. Moghadam and Mr. Skelton will serve as members of the executive committee and Ms. Kennard (chair), Mr. Skelton and Mr. Zollars will serve as members of the nominating & governance committee. The role of the executive committee will be to meet and act separately if board action is required, the matter is time-sensitive and the full board of directors is unavailable or unable to act in the required time frame.
 
Officers of the Combined Company
 
Upon the closing of the Merger, Mr. Moghadam and Mr. Rakowich will become co-chief executive officers of the combined company. On December 31, 2012, Mr. Rakowich will resign as co-chief executive officer and as a member of the board of directors, and Mr. Moghadam will become the sole chief executive officer of the combined company and remain chairman of the board of the combined company.
 
The bylaws of the combined company will provide that the affirmative vote of at least 75% of the independent directors of the combined company is required to take any of the following actions:
 
  •  removal of Mr. Moghadam from the office of co-chief executive officer of the combined company prior to December 31, 2012 or removal of Mr. Moghadam from the office of chief executive officer or chairman of the board of directors of the combined company prior to December 31, 2014;
 
  •  removal of Mr. Rakowich as co-chief executive officer of the combined company prior to December 31, 2012;
 
  •  appointment of any person as chief executive officer or co-chief executive officer of the combined company, other than, prior to December 31, 2012, Mr. Moghadam or Mr. Rakowich, or, after December 31, 2012 and prior to December 31, 2014, Mr. Moghadam;
 
  •  appointment of any person, other than Mr. Moghadam, as chairman or co-chairman of the board of directors of the combined company prior to December 31, 2014;
 
  •  failure to nominate Mr. Moghadam or Mr. Rakowich as a director of the combined company in any election of directors where the term of such directorship commences prior to December 31, 2014 or December 31, 2012, respectively; or
 
  •  a material alteration, limitation or curtailment of the authority granted pursuant to the bylaws of the combined company to the chief executive officer, co-chief executive officer or chairman of the board prior to December 31, 2014.
 
In addition, the affirmative vote of at least 75% of the independent directors of the combined company is required to amend, modify or repeal, or adopt any bylaw provision inconsistent with, the foregoing provisions.


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The current chief financial officer of ProLogis, Mr. William E. Sullivan, will become chief financial officer of the combined company, and the current chief financial officer of AMB, Mr. Thomas S. Olinger, will become chief integration officer of the combined company. On December 31, 2012, Mr. Sullivan will retire from the combined company and Mr. Olinger will become the chief financial officer of the combined company.
 
Following the closing of the Merger, Mr. Michael S. Curless will act as chief investment officer of the combined company, Mr. Guy F. Jaquier will act as chief executive officer, private capital, Mr. Gary E. Anderson will act as chief executive officer, Europe & Asia, Mr. Eugene F. Reilly will act as chief executive officer, the Americas, Mr. Edward S. Nekritz will act as chief legal officer and general counsel, and Ms. Nancy Hemmenway will act as chief human resources officer.
 
Treatment of ProLogis Share Options and Other Equity-Based Awards
 
Upon completion of the Topco merger, outstanding share options to purchase ProLogis common shares, share unit awards with respect to ProLogis common shares, dividend equivalent units with respect to ProLogis common shares and performance share awards denominated in ProLogis common shares will generally be assumed by the combined company without any action on the part of their holders, and converted into stock options, stock unit awards, dividend equivalent units and performance stock awards with respect to common stock of the combined company, on the same terms and conditions (including the vesting schedule, if applicable), except that:
 
  •  each ProLogis share option will be exercisable for that number of shares of common stock of the combined company equal to the number of ProLogis common shares subject to the share option multiplied by the exchange ratio (0.4464), and the per share exercise price for the shares of common stock of the combined company will be equal to the quotient determined by dividing the original exercise price of each ProLogis common share subject to such assumed ProLogis share option by the exchange ratio (0.4464);
 
  •  each ProLogis share unit award, dividend equivalent unit award and performance share award will be converted into the right to receive that number of shares of the common stock of the combined company equal to the number of ProLogis common shares subject to the respective award multiplied by the exchange ratio (0.4464).
 
Equity awards of AMB will remain outstanding upon completion of the Merger as equity awards of the combined company.
 
Participants in the ProLogis Employee Share Purchase Plan may not increase their payroll deductions thereunder from those in effect on January 30, 2011 and no employee may commence participation in the plan following January 30, 2011. The ProLogis Employee Share Purchase Plan will be automatically suspended effective as of the earlier of June 30, 2011 or the payroll period of ProLogis ending immediately prior to the closing of the Topco merger, but in no event less than ten business days prior to the closing of the Topco merger, and any contributions made for the offering period in effect as of January 30, 2011, the date of the merger agreement. will be applied to the purchase of ProLogis common shares, and any cash remaining in the ProLogis Employee Share Purchase Plan after such suspension date will be promptly refunded to plan participants.
 
Accounting Treatment
 
The Merger will be accounted for as a “purchase,” as that term is used under GAAP, for accounting and financial reporting purposes. Under purchase accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of AMB as of the effective time of the Topco merger will be recorded at their respective fair values and added to those of ProLogis. Any excess of purchase price over the fair values is recorded as goodwill. Consolidated financial statements of the combined company issued after the Merger would reflect these fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of AMB.
 
Regulatory Approvals Required for the Merger
 
AMB and ProLogis are not required to make notifications under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules promulgated thereunder by the Federal Trade Commission.


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Competition approvals for the Merger were required and have been obtained from the antitrust authorities in Canada, Germany and Mexico. In particular, competition consents were sought from the German antitrust authority (Bundeskartellamt), pursuant to the German Competition Law (Act Against Restraints of Competition of 1998, as amended), and the Mexican competition commission, Commission Federal de Competencia, pursuant to Article 20 of the Federal Law of Economic Competition. Competition consent was also sought and obtained from the Canadian Competition Bureau in Canada, pursuant to the Competition Act (Canada).
 
At any time before or after the combination, the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission, or a U.S. state attorney general could take action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the combination or seeking divestiture of assets of AMB or ProLogis or their respective subsidiaries. Private parties may also bring legal actions under the antitrust laws under certain circumstances. While AMB and ProLogis do not expect any such action to be taken, they can give no assurance that a challenge to the combination will not be made or, if made, would be unsuccessful.
 
Exchange of Shares in the Merger
 
At or prior to the effective time of the Merger, AMB will appoint an exchange agent to handle the exchange of certificates formerly representing ProLogis common shares for shares of common stock of the combined company and the exchange of certificates formerly representing ProLogis preferred shares for shares of preferred stock of the combined company. Promptly after the effective time of the Topco merger, the exchange agent will send to each holder of record of ProLogis common shares and ProLogis preferred shares at the effective time of the Merger who holds such shares in certificated or book-entry form (which we refer to as the “ProLogis certificates”), a letter of transmittal and instructions for effecting the exchange of the ProLogis certificates for the merger consideration the holder is entitled to receive under the merger agreement. Upon surrender of ProLogis certificates for cancellation along with the executed letter of transmittal and other documents described in the instructions, a former holder of ProLogis common shares or ProLogis preferred shares will receive one or both of the following: (i) one or more shares of common stock or preferred stock of the combined company and (ii) cash in lieu of fractional shares of common stock of the combined company. After the closing of the Merger, ProLogis will not register any transfers of the shares of ProLogis common shares and ProLogis preferred shares. The shares of stock of the combined company stock shareholders receive in the Merger will be issued in book-entry form.
 
Because the Topco merger will occur immediately after the ProLogis merger, ProLogis shareholders will not receive certificates representing shares of New Pumpkin common stock or preferred stock prior to the receipt of common stock and preferred stock of the combined company to be issued in the Topco merger.
 
If you are an AMB stockholder, you are not required to take any action with respect to your AMB stock certificates. Such certificates will continue to represent shares of the combined company after the Topco merger. However, after the Topco merger is completed, the exchange agent for the combined company will send you a letter of transmittal and instructions for exchanging your AMB stock certificates for stock certificates of the combined company. Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions, an AMB stockholder will receive a stock certificate of the combined company.
 
Dividends
 
Each company plans to continue its current dividend policy until the closing of the Merger. The parties each intend to pay distributions on their preferred shares at their stated dividend or distribution rates and quarterly dividends to their common stockholders at a rate not in excess of $0.28 per share of AMB common stock and $0.1125 per ProLogis common share. AMB and ProLogis have agreed to coordinate their regular quarterly dividends for their common stockholders so that, if one group of common stockholders receives any dividend for a quarter, the other group of common stockholders will also receive a dividend for such quarter at the same time. AMB and ProLogis have agreed that the other party, with notice to the other, can declare or pay the minimum dividend as may be required in order for such party to qualify as a REIT and to avoid to the extent reasonably possible the incurrence of income or excise tax (which we refer to as a “REIT dividend”). If one party declares a REIT dividend, the other party can declare a dividend per share in the same amount, as adjusted by the exchange ratio.


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Following the closing of the Merger, the parties intend that the combined company will maintain a dividend policy that will allow it to maintain its status as a REIT and avoid to the extent reasonably possible the incurrence of income or excise tax.
 
Listing of AMB Common Stock and Preferred Stock
 
It is a condition to the completion of the Merger that the AMB common stock, AMB Series R preferred stock, and AMB Series S preferred stock issuable in the Topco merger and the AMB common stock to be authorized and reserved for issuance upon exchange or redemption of partnership units by limited partners in certain of ProLogis’ partnerships, upon the conversion or exchange of certain of ProLogis’ convertible debt or upon exercise or settlement of options and other equity awards to purchase AMB common stock issued in substitution for ProLogis options and other equity awards be approved for listing on the NYSE, subject to official notice of issuance.
 
De-Listing and Deregistration of ProLogis Common Shares and Preferred Shares
 
When the Merger is completed, the ProLogis common shares and each series of ProLogis preferred shares currently listed on the NYSE will cease to be quoted on the NYSE and will be deregistered under the Exchange Act.
 
No Appraisal or Dissenters’ Rights
 
Under Section 8-501.1(j) of the Maryland REIT Law (which we refer to as the “MRL”) and Section 3-202 of the Maryland General Corporation Law (we refer to the Maryland General Corporation Law as the “MGCL” and we refer to the MRL and the MGCL together as “Maryland law”), holders of ProLogis common shares, ProLogis Series C preferred shares, ProLogis Series F preferred shares and ProLogis Series G preferred shares do not have the right to receive the appraised value of their shares in connection with the Merger because they are listed on the NYSE and/or are not entitled to vote on the Merger.
 
Litigation Relating to the Merger
 
Following the announcement of the merger agreement, several lawsuits were filed. Three of the actions were filed in the District Court for the City and County of Denver, Colorado. These cases have been consolidated, and on or about April 1, 2011, plaintiffs filed a consolidated class action complaint against ProLogis, the members of the ProLogis board of trustees, AMB, New Pumpkin, Upper Pumpkin, Pumpkin LLC and AMB LP. The complaint alleges that ProLogis’ trustees breached their fiduciary duties in connection with entering into the merger agreement and that ProLogis, AMB, New Pumpkin, Upper Pumpkin, Pumpkin LLC and AMB LP aided and abetted the breaches of those fiduciary duties. The complaint further alleges that the registration statement of which this joint proxy statement/prospectus forms a part contains material omissions and misstatements. The plaintiffs seek, among other relief, an order to (i) enjoin the defendants from consummating the Merger unless and until ProLogis adopts and implements a procedure or process reasonably designed to enter into a merger agreement providing the best possible value for ProLogis’ shareholders, (ii) direct the defendants to exercise their fiduciary duties to obtain a transaction that is in the best interests of ProLogis’ shareholders and to refrain from entering into any transaction until the process for the sale or merger of ProLogis is completed and the highest possible value obtained, (iii) rescind the merger agreement, to the extent already implemented, and (iv) award plaintiffs’ costs and disbursements of the action. Defendants have moved to stay the Colorado action in favor of the Maryland action described below. Plaintiffs have moved for expedited discovery, and the defendants have opposed that motion.
 
Two of the actions were filed in the Circuit Court of Maryland for Baltimore City. The actions have been consolidated, and the plaintiffs filed a consolidated class action and derivative complaint on or about March 28, 2011. The Maryland consolidated complaint names the same defendants as the Colorado consolidated complaint. The complaint alleges that the members of the ProLogis board of trustees breached their fiduciary duties in connection with the Merger and that AMB and AMB LP aided and abetted the breaches of those fiduciary duties. The complaint further alleges that the registration statement of which this joint proxy statement/prospectus forms a part is misleading and incomplete. The plaintiffs in this action seek, among other relief, an order to (i) enjoin, preliminarily and permanently, the Merger, (ii) rescind the Merger in the event it is consummated or award rescissory damages, (iii) direct the defendants to account to plaintiffs and all other members of the class for all


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damages, profits and any special benefits defendants obtained as a result of their breaches of fiduciary duties and (iv) award plaintiffs the costs of the action. Defendants moved to dismiss the Maryland action for failure to state a claim and to stay all discovery pending a ruling on their motion to dismiss; plaintiffs have moved for expedited discovery in advance of a preliminary injunction hearing.
 
On April 15, 2011, the parties to the Maryland action executed a memorandum of understanding that embodies their agreement in principle on the structure of a proposed settlement. The proposed settlement, which is subject to confirmatory discovery and court approval following notice to the class of all ProLogis shareholders during the period from January 30, 2011 through the date of the consummation of the Merger (which we refer to as the “Class”), would dismiss all causes of action asserted in the Maryland consolidated complaint and release all claims that members of the Class may have arising out of or relating in any manner to the Merger, including all claims being asserted in the Colorado action. Pursuant to the terms of the proposed settlement, defendants agreed to make certain disclosures to shareholders in this joint proxy statement/prospectus. The parties reported to the Maryland court on April 18, 2011 that they had reached agreement on a proposed settlement and executed a memorandum of understanding. On April 27, 2011, the parties to the consolidated action in Colorado reached an agreement in principle on the structure of a proposed settlement. Under the proposed settlement, which is subject to confirmatory discovery and approval of the Maryland court following notice to the Class, defendants agreed to make additional disclosures in this joint proxy statement/prospectus.
 
The defendants believe that the claims asserted against them in these lawsuits are without merit and, absent court approval of the proposed settlement, intend to defend themselves vigorously against the claims.


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The Merger Agreement
 
The following section summarizes material provisions of the merger agreement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. This summary is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this summary or any other information contained in this joint proxy statement/prospectus. You are urged to read the merger agreement carefully and in its entirety before making any decisions regarding the Merger.
 
The merger agreement summary is included in this joint proxy statement/prospectus only to provide you with information regarding the terms and conditions of the merger agreement, and not to provide any other factual information about AMB or ProLogis or their respective subsidiaries or businesses. Accordingly, the representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read together with the information provided elsewhere in this joint proxy statement/prospectus and in the documents incorporated by reference herein. See “Where You Can Find More Information.”
 
The representations, warranties and covenants contained in the merger agreement and described in this joint proxy statement/prospectus were made only for purposes of the merger agreement and as of specific dates and may be subject to more recent developments, were made solely for the benefit of the other parties to the merger agreement and may be subject to limitations agreed upon by the contracting parties, including being qualified by reference to confidential disclosures, for the purposes of allocating risk between the parties to the merger agreement instead of establishing these matters as facts, and may apply standards of materiality in a way that is different from what may be viewed as material by you or other investors. The representations and warranties contained in the merger agreement do not survive the effective time of the merger. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or conditions of AMB, ProLogis or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in public disclosures by AMB or ProLogis.
 
Form of the Merger
 
The merger agreement provides that, upon the terms and subject to the conditions set forth in the merger agreement and in accordance with the applicable provisions of Maryland law and the Delaware Limited Liability Company Act, AMB and ProLogis will combine through a multi-step process:
 
  •  first, in the ProLogis merger, ProLogis will be reorganized into an UPREIT structure by merging Pumpkin LLC with and into ProLogis, with ProLogis continuing as the surviving entity and as a direct wholly owned subsidiary of Upper Pumpkin and an indirect wholly owned subsidiary of New Pumpkin;
 
  •  following the ProLogis merger, in the Topco merger, New Pumpkin will be merged with and into AMB, with AMB continuing as the surviving corporation under the name of “ProLogis, Inc.”; and
 
  •  following the Topco merger, the combined company will contribute all of the outstanding equity interests of Upper Pumpkin to AMB LP, which will be renamed “ProLogis, L.P.,” in exchange for the issuance of partnership interests in AMB LP to the combined company.
 
Following the consummation of the Merger, ProLogis will continue its existence as a subsidiary of the combined company. The shares of common stock of the combined company will be listed and traded on the NYSE under the symbol “PLD.”
 
Merger Consideration
 
At the effective time of the ProLogis merger, upon the terms and subject to the conditions set forth in the merger agreement, (i) each outstanding ProLogis common share will be converted into one newly issued share of common stock of New Pumpkin, (ii) in a share exchange effected by the ProLogis merger, each outstanding


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ProLogis Series C preferred share will be exchanged for one newly issued share of Series C Cumulative Redeemable Preferred Stock of New Pumpkin (which we refer to as “New Pumpkin Series C preferred stock”), (iii) in a share exchange effected by the ProLogis merger, each outstanding ProLogis Series F preferred share will be exchanged for one newly issued share of Series F Cumulative Redeemable Preferred Stock of New Pumpkin (which we refer to as “New Pumpkin Series F preferred stock”) and (iv) in a share exchange effected by the ProLogis merger, each outstanding ProLogis Series G preferred share will be exchanged for one newly issued share of Series G Cumulative Redeemable Preferred Stock of New Pumpkin (which we refer to as “New Pumpkin Series G preferred stock”).
 
Pursuant to the Topco merger, upon the terms and subject to the conditions set forth in the merger agreement, (i) each outstanding share of New Pumpkin common stock will be converted into 0.4464 of a newly issued share of AMB common stock, (ii) each outstanding share of New Pumpkin Series C preferred stock will be converted into one newly issued share of AMB Series Q preferred stock, (iii) each outstanding share of New Pumpkin Series F preferred stock will be converted into one newly issued share of AMB Series R preferred stock and (iv) each outstanding share of New Pumpkin Series G preferred stock will be converted into one newly issued share of AMB Series S preferred stock.
 
AMB will not issue any fractional shares of AMB common stock in the Topco merger. Instead, a holder of New Pumpkin common stock who otherwise would have received a fraction of a share of AMB common stock will receive an amount in cash, without interest, equal to such fractional amount multiplied by the NYSE closing price for a share of AMB common stock on the last trading day immediately prior to the effective time of the Topco merger.
 
Each share of AMB common stock and AMB preferred stock will remain outstanding following the effective time of the Topco merger as shares of stock of the combined company.
 
As a result of the Merger, each outstanding right of a limited partner in each of ProLogis Fraser, L.P. and ProLogis Limited Partnership I to redeem or exchange such limited partner’s partnership interests therein for ProLogis common shares (or cash equivalents thereof) will be converted into the right to redeem or exchange such partnership interests for shares of AMB common stock (or cash equivalents thereof) adjusted by the exchange ratio, upon the terms and subject to the conditions set forth in the merger agreement. Each outstanding right of a holder of ProLogis’ convertible notes to convert such convertible notes into ProLogis common shares will be converted into the right to convert such convertible notes into shares of AMB common stock, upon the terms and subject to the conditions set forth in the merger agreement.
 
As a result of the contribution and the issuance, Upper Pumpkin and, accordingly ProLogis, will become a wholly owned subsidiary of AMB LP. Following the contribution and the issuance, AMB LP shall change its name to “ProLogis, L.P.”
 
Treatment of ProLogis Share Options and Other Equity-Based Awards
 
Upon the completion of the Topco merger, each outstanding option to purchase ProLogis common shares, whether or not then exercisable, will be assumed by the combined company. Each such option so assumed by the combined company will otherwise continue to be subject to the same terms and conditions as applicable immediately prior to the effective date of the Topco merger, except that:
 
  •  each such option will be exercisable for that number of shares of common stock of the combined company equal to the product of the number of ProLogis common shares that were subject to such option immediately prior to the Topco merger, multiplied by the exchange ratio (0.4464) and rounded down to the nearest whole number of shares; and
 
  •  the per share exercise price for the shares of common stock of the combined company issuable upon exercise of such option will be equal to the quotient determined by dividing the exercise price of the option immediately prior to the Topco merger by the exchange ratio (0.4464), rounded up to the nearest whole cent.
 
The foregoing provisions recognize and take into account that each ProLogis common share will, at the effective time of the ProLogis merger, be converted into a share of New Pumpkin common stock.


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On the effective date of the Topco merger, the following will occur with respect to each outstanding share unit award with respect to ProLogis common shares, dividend equivalent unit award with respect to ProLogis common shares and performance share award denominated in ProLogis common shares:
 
  •  each such award, whether or not then vested or earned, will be assumed by the combined company by virtue of the Merger;
 
  •  each such award will be converted into the right to receive the number of shares of common stock of the combined company equal to the number of ProLogis common shares underlying or subject to such award immediately prior to the Topco merger, multiplied by the exchange ratio (0.4464) and rounded down to the nearest whole number of shares; and
 
  •  each such award will otherwise continue to be subject to the same terms and conditions as applicable immediately prior to the Topco merger effective date.
 
The foregoing provisions recognize and take into account that each ProLogis common share will, at the effective time of the ProLogis merger, be converted into a share of New Pumpkin common stock.
 
The ProLogis board of trustees has agreed to adopt such resolutions and take such other actions as may be required to provide that with respect to ProLogis’ Employee Stock Purchase Plan:
 
  •  participants may not increase their payroll deductions under such plan from those in effect on January 30, 2011, the date of the merger agreement;
 
  •  no new participants may join such plan following January 30, 2011;
 
  •  all participation in, and purchases under such plan will be suspended effective as of the earlier of June 30, 2011 or ProLogis’ payroll period ending immediately prior to the closing of the Topco merger, but in no event less than ten business days prior to the closing of the Topco merger (we refer to this date as the “suspension date”), such that the offering period in effect as of January 30, 2011, the date of the merger agreement, will be the final offering period under the plan until otherwise determined by the board of directors of the combined company; and
 
  •  with respect to any offering period under such plan in effect as of January 30, 2011, ProLogis will ensure that such offering period ends on the suspension date and that each participant’s accumulated contributions for such offering period will be applied to the purchase of ProLogis common shares in accordance with the terms of the plan.
 
Any cash remaining in ProLogis’ Employee Share Purchase Plan after the purchases occurring on the suspension date will be promptly refunded to participants.