Exhibit 10.35

 

Equity Residential

Supplemental Executive Retirement Savings Plan

As Amended and Restated

Effective January 1, 2003

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

ARTICLE 1

 

INTRODUCTION

 

1

 

 

 

 

 

1.1

 

Purpose of Plan

 

1

1.2

 

Status of P1an

 

1

 

 

 

 

 

ARTICLE 2

 

DEFINITIONS

 

1

 

 

 

 

 

2.1

 

Account

 

1

2.2

 

Change Form

 

2

2.3

 

Change of Control

 

2

2.4

 

Code

 

2

2.5

 

Compensation

 

2

2.6

 

Credited Service

 

2

2.7

 

Educational Account

 

3

2.8

 

Elective Deferral

 

3

2.9

 

Eligible Employee

 

3

2.10

 

Eligible Trustee

 

3

2.11

 

Employer

 

3

2.12

 

Enrollment Form

 

3

2.13

 

Entry Date

 

3

2.14

 

EQR

 

3

2.15

 

ERISA

 

3

2.16

 

Extended Company

 

4

2.17

 

Funding Trust

 

4

2.18

 

Funding Trustee

 

4

2.19

 

Insolvent

 

4

2.20

 

Normal Retirement Age

 

4

2.21

 

Matching Deferral

 

4

2.22

 

Participant

 

4

2.23

 

Plan

 

4

2.24

 

Plan Administrator

 

5

2.25

 

Plan Year

 

5

2.26

 

Qualified Plan

 

5

2.27

 

Restricted Share

 

5

2.28

 

Share

 

5

2.29

 

Share Appreciation Right

 

5

2.30

 

Share Option

 

5

2.31

 

Share Deferral

 

5

2.32

 

Total and Permanent Disability

 

5

2.33

 

Unforeseeable Emergency

 

5

2.34

 

Unrestricted Share

 

6

 

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ARTICLE 3

 

PARTICIPATION

 

6

 

 

 

 

 

3.1

 

Satisfaction of Eligibility Requirements

 

6

3.2

 

Commencement of Participation

 

7

3.3

 

Continued Participation

 

7

3.4

 

Suspension of Participation

 

7

 

 

 

 

 

ARTICLE 4

 

ELECTIVE AND MATCHING DEFERRALS

 

8

 

 

 

 

 

4.1

 

Elective Deferrals

 

8

4.2

 

Share Deferrals

 

10

4.3

 

Matching Deferrals

 

11

4.4

 

Enrollment Forms

 

12

 

 

 

 

 

ARTICLE 5

 

ACCOUNTS

 

13

 

 

 

 

 

5.1

 

Accounts

 

13

5.2

 

Educational Account

 

13

5.3

 

Investments

 

14

 

 

 

 

 

ARTICLE 6

 

VESTING

 

16

 

 

 

 

 

6.1

 

General

 

16

6.2

 

Change of Control

 

17

6.3

 

Death or Disability

 

17

6.4

 

Insolvency

 

17

6.5

 

Normal Retirement Age

 

18

 

 

 

 

 

ARTICLE 7

 

PAYMENTS

 

18

 

 

 

 

 

7.1

 

Election as to Time and Form of Payment

 

18

7.2

 

Termination of Service

 

21

7.3

 

Death

 

21

7.4

 

Withdrawal Due to Unforeseeable Emergency

 

22

7.5

 

Withdrawal Due to Educational Expense

 

23

7.6

 

Other Withdrawals

 

24

7.7

 

Forfeiture of Non-Vested Amounts

 

24

7.8

 

Taxes

 

25

 

 

 

 

 

ARTICLE 8

 

PLAN ADMINISTRATOR

 

25

 

 

 

 

 

8.1

 

Plan Administration and Interpretation

 

25

8.2

 

Powers, Duties, Procedures, Etc.

 

26

8.3

 

Information

 

26

8.4

 

Indemnification of Plan Administrator

 

26

 

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ARTICLE 9

 

CLAIMS PROCEDURES

 

27

 

 

 

 

 

ARTICLE 10

 

AMENDMENT AND TERMINATION

 

28

 

 

 

 

 

10.1

 

Amendment

 

28

10.2

 

Termination of Plan

 

28

10.3

 

Existing Rights

 

29

 

 

 

 

 

ARTICLE 11

 

MISCELLANEOUS

 

29

 

 

 

 

 

11.1

 

No Funding

 

29

11.2

 

Non-assignability

 

30

11.3

 

Limitation of Participant’s Rights

 

30

11.4

 

Participants Bound

 

30

11.5

 

Receipt and Release

 

31

11.6

 

Governing Law

 

31

11.7

 

Headings and Subheadings

 

31

 

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ARTICLE 1

 

INTRODUCTION

1.1                               PURPOSE OF PLAN

 

EQR initially adopted the Plan to provide a means by which certain employees
could elect to defer receipt of portions of their Compensation and to provide
opportunities for such individuals to save for retirement and for the education
of their children. As first amended and restated, the Plan also provides for the
participation of non-employee trustees on the terms and conditions set forth
herein. This amendment and restatement shall apply to eligible employees and
trustees from and after January 1, 2003.

 

1.2                               STATUS OF P1AN

 

Except with respect to the participation of trustees, it is intended that the
Plan be “a plan which is unfunded and is maintained by an employer primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees” within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, and that the Plan be interpreted and
administered consistent with that intent.

 

ARTICLE 2

 

DEFINITIONS

 

Wherever used herein, the following terms have the meanings set forth below,
unless a different meaning is clearly required by the context:

 

2.1                               Account means, for each Participant, the
account established for his or her benefit under Section 5.1.

 

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2.2                               Change Form means the document or documents
prescribed by the Plan Administrator and pursuant to which a Participant
may change elections made on an Enrollment Form.

 

2.3                               Change of Control means (i) the acquisition by
any entity, person, or group of more than 50% of the outstanding Shares from the
holders thereof; (ii) a merger or consolidation of EQR with one or more other
entities as a result of which the ultimate holders of outstanding Shares
immediately prior to such merger hold less than 50% of the shares of beneficial
ownership of the surviving or resulting corporation; or (iii) a transfer of
substantially all of the property of EQR other than to an entity of which EQR
directly or indirectly owns at least 50% of the shares of beneficial ownership.

 

2.4                               Code means the Internal Revenue Code of 1986,
as amended from time to time. Reference to any section or subsection of the Code
includes reference to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such section or subsection.

 

2.5                               Compensation means cash compensation payable
by an Employer (before deductions) for service performed for the Employer that
currently would be includable in gross income and may consist of either the
Participant’s (i) salary, (ii) commissions, and/or (iii) incentive pay. In the
case of an Eligible Trustee, “Compensation” means all cash remuneration
otherwise payable to him or her for service as a member of the Board of
Trustees, including but not limited to any retainer and committee or chair fees.

 

2.6                               Credited Service means the Participant’s Years
of Credited Service as calculated for purposes of the Qualified Plan.

 

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2.7                               Educational Account means an account
established by a Participant pursuant to Section 5.2, for the use described
therein.

 

2.8                               Elective Deferral means the portion of
Compensation which is deferred by a Participant under Section 4.1.

 

2.9                               Eligible Employee means, on any Entry Date,
those employees of an Employer whose anticipated total annualized Compensation
is not less than $80,000.

 

2.10                        Eligible Trustee means, on any Entry Date, a member
of the Board of Trustees of EQR who is not an employee of EQR.

 

2.11                        Employer means Equity Residential, Equity
Residential Properties Management Limited Partnership, Equity Residential
Properties Management Limited Partnership II, Equity Residential Properties
Management Corp. and each other entity that is affiliated with EQR and that
adopts the Plan with the consent of EQR.

 

2.12                        Enrollment Form means the document or documents
prescribed by the Plan Administrator and pursuant to which a Participant
may make elections to defer Compensation and/or defer income with respect to
Shares, Restricted Shares, Share Options or Share Appreciation Rights, and
related elections, hereunder.

 

2.13                        Entry Date means (i) January 1 of each Plan Year;
and (ii) in the case of an individual described in clause Section 4.1(b)(iii),
the date as of which his or her Enrollment Form is effective as described
therein.

 

2.14                        EQR means Equity Residential, and any successor
thereto.

 

2.15                        ERISA means the Employee Retirement Income Security
Act of 1974, as amended from time to time. Reference to any section or
subsection of ERISA includes

 

3

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reference to any comparable or succeeding provisions of any legislation that
amends, supplements or replaces such section or subsection.

 

2.16                        Extended Company means an Employer and any other
entity so designated by the Plan Administrator, but only if such other entity
maintains a non-qualified deferred compensation arrangement that provides that
if an employee terminates his or her employment with the entity and immediately
accept a position with EQR, his or her employment is not treated as having
terminated for purposes of distributions under such arrangement. The Plan
Administrator may change the entities designated as Extended Companies from time
to time as it deems appropriate.

 

2.17                        Funding Trust means the grantor trust established by
EQR to hold assets contributed under the Plan.

 

2.18                        Funding Trustee means the trustee or trustees under
the Funding Trust.

 

2.19                        Insolvent means either (i) the Employer is unable to
pay its debts as they become due, or (ii) the Employer is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.

 

2.20                        Normal Retirement Age means age sixty-five (65).

 

2.21                        Matching Deferral means a contribution by an
Employer for the benefit of a Participant who is an Eligible Employee, as
described in Section 4.3.

 

2.22                        Participant means any individual who participates in
the Plan in accordance with Article 3.

 

2.23                        Plan means the Equity Residential Supplemental
Executive Retirement Savings Plan as amended and restated herein, and as further
amended from time to time.

 

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2.24                        Plan Administrator means the Senior Vice President,
Human Resources, or such other person, persons or entity designated by EQR to
administer the Plan and to serve as the agent for the settlor of the Funding
Trust as contemplated by the agreement establishing the Funding Trust. If no
such person or entity is so serving at any time, EQR shall be the Plan
Administrator.

 

2.25                        Plan Year means the l2-month period ending on
December 3l.

 

2.26                        Qualified Plan means the Equity Residential
ADVANTAGE Retirement Savings Plan.

 

2.27                        Restricted Share means a Share that is subject to a
substantial risk of forfeiture for purposes of Section 83 of the Code.

 

2.28                        Share means a share of beneficial interest, par
value $.0l per share, of EQR.

 

2.29                        Share Appreciation Right means a right to share in
the appreciation of Shares granted by EQR.

 

2.30                        Share Option means an option to purchase Shares
granted by EQR.

 

2.31                        Share Deferral means the portion of a Share, Share
Option or Share Appreciation Right deferred by a Participant under Section 4.2.

 

2.32                        Total and Permanent Disability means a physical or
mental condition that entitles a Participant to benefits under the
Employer-sponsored long-term disability plan in which he or she participates.

 

2.33                        Unforeseeable Emergency means an immediate and heavy
financial need resulting from any of the following:

 

5

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(A)                                  EXPENSES WHICH ARE NOT COVERED BY INSURANCE
AND WHICH THE PARTICIPANT OR HIS OR HER SPOUSE OR DEPENDENT HAS INCURRED AS A
RESULT OF, OR IS REQUIRED TO INCUR IN ORDER TO RECEIVE, MEDICAL CARE;

 

(B)                                 THE NEED TO PREVENT EVICTION OF A
PARTICIPANT FROM HIS OR HER PRINCIPAL RESIDENCE OR FORECLOSURE ON THE MORTGAGE
OF THE PARTICIPANT’S PRINCIPAL RESIDENCE; OR

 

(C)                                  ANY OTHER CIRCUMSTANCE THAT IS DETERMINED
BY THE PLAN ADMINISTRATOR IN ITS SOLE DISCRETION TO CONSTITUTE AN UNFORESEEABLE
EMERGENCY THAT (I) IS NOT COVERED BY INSURANCE, (II) CANNOT REASONABLY BE
RELIEVED BY THE LIQUIDATION OF THE PARTICIPANT’S ASSETS, AND (III) IS CONSISTENT
WITH THE INTENT OF TREASURY REGULATION SECTION 1.457-2(H)(4).

 

2.34                        Unrestricted Share means a Share that is subject to
Section 83 of the Code and is not subject to a substantial risk of forfeiture.

 

ARTICLE 3

 

PARTICIPATION

 

3.1                               SATISFACTION OF ELIGIBILITY REQUIREMENTS

 

Prior to each Entry Date, the Plan Administrator shall determine in its
discretion the identity of those Eligible Employees and Eligible Trustees,
including any retired officers or trustees, who may commence or continue their
participation in the Plan as of such Entry Date. The Plan Administrator will
notify Eligible Employees and Eligible Trustees of their eligibility to
participate in the Plan and provide them with an Enrollment Form. If the Plan
Administrator determines that a Participant currently making Elective Deferrals,
Share Deferrals or Matching Deferrals is not eligible to participate in the Plan
as of an upcoming Entry Date because he or she no longer satisfies the
eligibility requirements described in Section 2.9 or 2.10 (as

 

6

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applicable), the Participant will be subject to a suspension of participation as
described in Section 3.4 below.

 

3.2                               COMMENCEMENT OF PARTICIPATION

 

An Eligible Employee or Eligible Trustee shall become a Participant in the Plan
on the first date as of which an Elective Deferral, Share Deferral, or Matching
Deferral is credited to his or her Account.

 

3.3                               CONTINUED PARTICIPATION

 

A Participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.

 

3.4                               SUSPENSION OF PARTICIPATION

 

If, pursuant to Section 3.1, the Plan Administrator determines that an active
Participant no longer satisfies the eligibility requirements of Section 2.9 or
2.10 (as applicable), the Plan Administrator shall notify the Participant, and
the Participant’s Elective Deferrals, Share Deferrals and Matching Deferrals
shall be suspended until the next following Entry Date as of which the
Participant again satisfies Section 2.9 or 2.10 (as applicable). If the Plan
Administrator, pursuant to Section 3.1, determines that the Participant again
satisfies the eligibility requirements of Section 2.9 or 2.10 (as applicable),
the Plan Administrator shall notify the Participant, and the Participant shall
be permitted to resume active participation in the Plan as of the next following
Entry Date in accordance with Article 4. Upon such resumption, EQR may make
Matching Deferrals for such Participant to make up for any Matching Deferrals
not made while his or her participation was suspended.

 

7

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ARTICLE 4

 

ELECTIVE AND MATCHING DEFERRALS

 

4.1                               Elective Deferrals

 

(A)                                  AN INDIVIDUAL WHO IS AN ELIGIBLE EMPLOYEE
OR ELIGIBLE TRUSTEE MAY ELECT TO DEFER RECEIPT OF A WHOLE PERCENTAGE OR WHOLE
DOLLAR AMOUNT OF UP TO 25% (OR 100% IN THE CASE OF AN ELIGIBLE TRUSTEE) OF THE
COMPENSATION (EXCLUSIVE OF ANY BONUS) OTHERWISE PAYABLE TO HIM OR HER, ON AND
AFTER A SUBSEQUENT ENTRY DATE FOR THE APPLICABLE PLAN YEAR. IN ADDITION, SUBJECT
TO THE PROVISIONS OF SUBSECTION (B)(III) BELOW, AN ELIGIBLE EMPLOYEE MAY ELECT
TO DEFER UP TO 100% OF ANY INCENTIVE PAY COMPENSATION PAYABLE DURING A PLAN
YEAR. FOR PURPOSES OF THE FOREGOING, THE ELECTIVE DEFERRAL OF EACH ELIGIBLE
EMPLOYEE WILL EQUAL THE GREATER OF (I) THE ELECTED PERCENTAGE OF HIS OR HER
COMPENSATION OR ELECTED DOLLAR AMOUNT, AS THE CASE MAY BE; OR (II) THE ENTIRE
AMOUNT OF HIS OR HER COMPENSATION REMAINING AFTER (A) ALL CONTRIBUTIONS THAT THE
ELIGIBLE EMPLOYEE HAS ELECTED TO MAKE UNDER ALL OTHER RETIREMENT AND WELFARE
BENEFIT PLANS MAINTAINED BY HIS OR HER EMPLOYER HAVE BEEN DEDUCTED FROM HIS OR
HER COMPENSATION, AND (B) DEDUCTIONS FROM COMPENSATION REQUIRED BY LAW,
INCLUDING SOCIAL SECURITY AND MEDICARE TAXES. AN ELIGIBLE EMPLOYEE OR ELIGIBLE
TRUSTEE WHO DESIRES TO ELECT SUCH A DEFERRAL SHALL COMPLETE AND FILE AN
ENROLLMENT FORM WITH THE PLAN ADMINISTRATOR.

 

(B)                                 EACH ENROLLMENT FORM SHALL BE EFFECTIVE AS
DESCRIBED IN CLAUSES (I), (II), (III) AND (IV) BELOW.

 

(I)                                     AN ENROLLMENT FORM WITH RESPECT TO
SALARY AND COMMISSIONS PAID FROM AND AFTER THE ENTRY DATE IN ANY PLAN YEAR SHALL
BE FILED ON OR BEFORE A DEADLINE ESTABLISHED BY THE PLAN ADMINISTRATOR FOR THE

 

8

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APPLICABLE PLAN YEAR, BUT IN NO EVENT LATER THAN THE DECEMBER 31 THAT PRECEDES
THE FIRST DAY OF SUCH PLAN YEAR.

 

(II)                                  NOTWITHSTANDING CLAUSE (I), IN THE CASE OF
AN INDIVIDUAL WHO FIRST BECOMES AN ELIGIBLE EMPLOYEE OR ELIGIBLE TRUSTEE
FOLLOWING THE COMMENCEMENT OF THE PLAN YEAR, THE ENROLLMENT FORM WILL BE
EFFECTIVE WITH RESPECT TO SALARY AND COMMISSIONS RECEIVED AFTER THE DATE THE
ENROLLMENT FORM IS FILED, IF IT IS FILED WITHIN 30 DAYS AFTER THE DATE THE
INDIVIDUAL BECOMES AN ELIGIBLE EMPLOYEE OR ELIGIBLE TRUSTEE.

 

(III)                               AN ENROLLMENT FORM WITH RESPECT TO INCENTIVE
PAY SHALL BE FILED ON OR BEFORE OCTOBER 1 OF THE PLAN YEAR PRECEDING THE PLAN
YEAR IN WHICH THE INCENTIVE PAY IS OTHERWISE PAYABLE; PROVIDED THAT, IN THE CASE
OF AN INDIVIDUAL WHO FIRST BECOMES AN ELIGIBLE EMPLOYEE AFTER OCTOBER 1 OF ANY
PLAN YEAR, THE ENROLLMENT FORM WILL BE EFFECTIVE IF IT IS FILED NO LATER THAN 30
DAYS AFTER HE OR SHE BECOMES AN ELIGIBLE EMPLOYEE AND BEFORE THE START OF THE
PLAN YEAR IN WHICH THE INCENTIVE PAY IS OTHERWISE PAYABLE.

 

(C)                                  EACH ENROLLMENT FORM SHALL BE EFFECTIVE FOR
ALL COMPENSATION TO BE PAID TO THE PARTICIPANT FILING SUCH ENROLLMENT FORM FROM
AND AFTER THE ENTRY DATE TO WHICH SUCH ENROLLMENT FORM APPLIES. AN ELECTION TO
DEFER SALARY OR COMMISSIONS ALSO SHALL APPLY FROM AND AFTER SUBSEQUENT ENTRY
DATES UNLESS CHANGED AS PROVIDED HEREIN, OR UNTIL SUCH TIME (IF ANY) THAT THE
PARTICIPANT IS SUSPENDED FROM THE PLAN, AS PROVIDED UNDER SECTION 3.4 OR
SECTION 7.6.

 

9

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(D)                                 A PARTICIPANT WHO IS AN ELIGIBLE EMPLOYEE
AND FOR WHOM A DEFERRAL ELECTION IS OR WILL BE EFFECTIVE AS OF A JANUARY 1 ENTRY
DATE WILL BE REQUIRED TO HAVE ELECTIVE DEFERRALS CONTRIBUTED PURSUANT TO THIS
PLAN TRANSFERRED TO THE QUALIFIED PLAN AS SALARY DEFERRALS AS OF THE END OF THE
PLAN YEAR, IF AND TO THE EXTENT ALLOWABLE UNDER THE QUALIFIED PLAN. THE PLAN
ADMINISTRATOR MAY DETERMINE WHICH INVESTMENTS SHALL BE LIQUIDATED FOR THIS
CONTRIBUTION AND SHALL DIRECT THE FUNDING TRUSTEE TO TRANSFER SUCH ELECTIVE
DEFERRALS AS SOON AS POSSIBLE AFTER NON-DISCRIMINATION TESTS AND OTHER
COMPLIANCE MATTERS HAVE BEEN COMPLETED FOR THE QUALIFIED PLAN FOR SUCH PLAN
YEAR.

 

4.2                               Share Deferrals

 

(A)                                  AN INDIVIDUAL WHO IS AN ELIGIBLE EMPLOYEE
AND WHO HAS RECEIVED (OR IS TO RECEIVE) A RESTRICTED SHARE, SHARE OPTION OR
SHARE APPRECIATION RIGHT OR IS TO RECEIVE AN UNRESTRICTED SHARE MAY ELECT TO
DEFER (I) WITH RESPECT TO A RESTRICTED SHARE, THE OWNERSHIP OF THE SHARE WHEN IT
IS AN UNRESTRICTED SHARE; OR (II) WITH RESPECT TO THE SHARE OPTION OR SHARE
APPRECIATION RIGHT, THE OWNERSHIP OF THE SHARES OR OTHER PROCEEDS OF AN EXERCISE
THEREOF. AN ELIGIBLE EMPLOYEE WHO DESIRES TO ELECT A SHARE DEFERRAL SHALL
COMPLETE AND FILE AN ENROLLMENT FORM WITH THE PLAN ADMINISTRATOR. THE
PARTICIPANT MAY ALSO MAKE AN ELECTION, APPLICABLE IF THE FUNDING TRUSTEE
RECEIVES AND COMPLIES WITH A PARTICIPANT’S REQUEST TO INVEST THE DEFERRED AMOUNT
IN SHARES, TO EITHER HAVE ANY DIVIDENDS PAID ON SUCH SHARES CREDITED TO HIS OR
HER ACCOUNT OR DISTRIBUTED TO THE PARTICIPANT WHEN RECEIVED BY THE FUNDING
TRUSTEE.

 

(B)                                 AN ELECTION PURSUANT TO PARAGRAPH (A) MUST
BE MADE (I) WITH RESPECT TO A RESTRICTED SHARE, AT LEAST TWELVE MONTHS BEFORE
THE DATE IT WOULD BECOME AN UNRESTRICTED SHARE; OR (II) WITH RESPECT TO A SHARE
OPTION OR SHARE APPRECIATION RIGHT, AT LEAST TWELVE MONTHS PRIOR TO THE DATE THE
SHARE OPTION OR SHARE APPRECIATION RIGHT IS EXERCISED, OR AT SUCH OTHER TIME AS

 

10

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THE PLAN ADMINISTRATOR MAY SPECIFY. DEFERRALS WILL ONLY BE EFFECTIVE IF THE
INDIVIDUAL MAKING THE ELECTION IS STILL AN ELIGIBLE EMPLOYEE OR ELIGIBLE TRUSTEE
ON (I) IN THE CASE OF A DEFERRAL OF A RESTRICTED SHARE, THE DATE SUCH SHARE
WOULD BECOME AN UNRESTRICTED SHARE; OR (II) IN THE CASE OF A DEFERRAL OF A SHARE
OPTION OR SHARE APPRECIATION RIGHT, THE DATE THAT A SHARE OPTION OR SHARE
APPRECIATION RIGHT IS EXERCISED.

 

(C)                                  NOTWITHSTANDING THE FOREGOING PROVISIONS OF
THIS SECTION 4.2, THE FUNDING TRUSTEE SHALL NOT BE REQUIRED TO HOLD ON BEHALF OF
A PARTICIPANT ANY UNRESTRICTED SHARE, RESTRICTED SHARE, SHARE OPTION OR SHARE
APPRECIATION RIGHT DEFERRED BY THE PARTICIPANT IN ACCORDANCE WITH PARAGRAPH
(A) ABOVE. INSTEAD, THE FUNDING TRUSTEE SHALL CREDIT TO THE PARTICIPANT’S
ACCOUNT AN AMOUNT EQUAL TO (I) IN THE CASE OF AN UNRESTRICTED SHARE OR
RESTRICTED SHARE, THE FAIR MARKET VALUE THEREOF ON THE DATE THAT THE SHARE WOULD
OTHERWISE BE RECEIVED BY THE PARTICIPANT (OR IN THE CASE OF A DEFERRAL OF A
RESTRICTED SHARE ELECTED AFTER THE SHARE HAS BEEN RECEIVED, ON THE DATE THAT THE
ENROLLMENT FORM IS RECEIVED BY THE PLAN ADMINISTRATOR); AND (II) IN THE CASE OF
A SHARE OPTION OR SHARE APPRECIATION RIGHT, THE EXCESS OF THE FAIR MARKET VALUE
OF THE UNDERLYING SHARES OVER THE EXERCISE OR BASE PRICE THEREOF ON THE DATE OF
EXERCISE. THE PARTICIPANT MAY REQUEST, IN ACCORDANCE WITH SECTION 5.3, THAT
AMOUNTS CREDITED TO HIS OR HER ACCOUNT FOLLOWING A SHARE DEFERRAL BE INVESTED IN
SHARES, PROVIDED THAT THE FUNDING TRUSTEE SHALL HAVE NO OBLIGATION TO COMPLY
WITH SUCH REQUEST.

 

4.3                               Matching Deferrals

 

(A)                                  NOT LATER THAN THE LATEST DATE PERMITTED BY
SECTION 404 OF THE CODE FOR MATCHING CONTRIBUTIONS UNDER THE QUALIFIED PLAN WITH
RESPECT TO EACH PLAN YEAR THEREUNDER (OR SUCH LATER DATE THAT THE NEED FOR A
MATCHING DEFERRAL IS DETERMINED), THE EMPLOYER SHALL CONTRIBUTE A MATCHING
DEFERRAL TO THE ACCOUNT OF EACH PARTICIPANT WHO IS AN ELIGIBLE EMPLOYEE,

 

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IF REQUIRED BY THE NEXT SENTENCE. THE MATCHING DEFERRAL FOR EACH ELIGIBLE
EMPLOYEE FOR THE PLAN YEAR SHALL EQUAL THE EXCESS OF (I) THE AMOUNT, IF ANY, BY
WHICH THE ELIGIBLE EMPLOYEE’S MATCHING CONTRIBUTIONS UNDER THE QUALIFIED PLAN
WERE REDUCED BECAUSE OF THE OPERATION OF SECTION 401(M) OF THE CODE, OR BECAUSE
THE AMOUNT OF HIS OR HER ELECTIVE CONTRIBUTIONS TO THE QUALIFIED PLAN WERE
REDUCED BY OPERATION OF OR TO COMPLY WITH SECTION 401(K)(3) OF THE CODE (BUT
CONSIDERING ALL OTHER CONDITIONS, RESTRICTIONS AND PROVISIONS OF THE CODE OR THE
QUALIFIED PLAN); OVER (II) ANY AMOUNT PAID TO THE ELIGIBLE EMPLOYEE WITH RESPECT
TO SUCH PLAN YEAR BY THE QUALIFIED PLAN OR THE EMPLOYER TO COMPENSATE OR
OTHERWISE MAKE UP FOR SUCH REDUCTION.

 

(B)                                 NOTWITHSTANDING PARAGRAPH (A) ABOVE, A
MATCHING DEFERRAL WILL BE MADE FOR AN ELIGIBLE EMPLOYEE FOR A PLAN YEAR ONLY IF
THE ELIGIBLE EMPLOYEE WOULD HAVE BEEN ELIGIBLE TO RECEIVE ALLOCATION OF A
MATCHING CONTRIBUTION MADE UNDER THE QUALIFIED PLAN FOR SUCH PLAN YEAR.

 

4.4                               Enrollment Forms

 

All Enrollment Forms filed pursuant to Article 4 shall be irrevocable (i) with
respect to Elective Deferrals under Section 4.1, except as provided therein; and
(ii) for Share Deferrals under Section 4.2, with respect to the Unrestricted
Share, Restricted Share, Share Option or Share Appreciation Right subject
thereto. Notwithstanding the foregoing, if a Participant incurs an Unforeseeable
Emergency, he or she may file a Change Form to revoke his or her Enrollment
Form (but only to the extent reasonably needed to relieve the Unforeseeable
Emergency). Any Change Form that revokes an Enrollment Form shall be effective
as described in the first sentence of this Section 4.4.

 

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ARTICLE 5

 

ACCOUNTS

 

5.1                               Accounts

 

The Plan Administrator shall establish an Account for each Participant
reflecting Elective Deferrals, Share Deferrals and Matching Deferrals (if
applicable) made for the Participant’s benefit together with any adjustments for
income, gain or loss and any payments from the Account. Elective Deferrals,
Share Deferrals and Matching Deferrals will be credited to the Account of each
applicable Participant as of the later of the date they are received by the
Funding Trustee or the date the Funding Trustee receives from the Plan
Administrator such instructions as the Funding Trustee may reasonably require to
allocate the amount received among the investments maintained by the Funding
Trustee. A Participant’s Account shall also include any Educational Account
established pursuant to Section 5.2. As soon as practicable following the last
business day of each calendar quarter, the Plan Administrator (or its designee)
shall provide the Participant with a statement of such Participant’s Account
reflecting the income, gains and losses (realized and unrealized), amounts of
deferrals and distributions with respect to such Account since the prior
statement.

 

5.2                               Educational Account

 

(A)                                  AN ELIGIBLE EMPLOYEE OR AN ELIGIBLE TRUSTEE
MAY TRANSFER ANY VESTED PORTION OF HIS OR HER PLAN ACCOUNT INTO AN EDUCATIONAL
ACCOUNT IN ACCORDANCE WITH THIS SECTION 5.2.

 

(B)                                 AN EDUCATIONAL ACCOUNT MAY BE ESTABLISHED
FOR ANY ADOPTED OR NATURAL-BORN CHILD OF AN ELIGIBLE EMPLOYEE IN ORDER TO
FINANCE SUCH CHILD’S POST-SECONDARY UNDERGRADUATE OR GRADUATE LEVEL EDUCATION.
AN ELIGIBLE EMPLOYEE WISHING TO ESTABLISH AN

 

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EDUCATIONAL ACCOUNT SHALL SO NOTIFY THE PLAN ADMINISTRATOR IN WRITING, ON A
FORM PRESCRIBED BY THE PLAN ADMINISTRATOR FOR THAT PURPOSE, NO LATER THAN: 
(I) WITH RESPECT TO AN EDUCATIONAL ACCOUNT ESTABLISHED TO FINANCE A CHILD’S
UNDERGRADUATE EDUCATION, THE BEGINNING OF THE CHILD’S LAST FULL ACADEMIC YEAR OF
HIGH SCHOOL (OR COMPARABLE) EDUCATION, OR (II) WITH RESPECT TO AN EDUCATIONAL
ACCOUNT ESTABLISHED TO FINANCE A CHILD’S GRADUATE EDUCATION, THE BEGINNING OF
THE CHILD’S LAST FULL ACADEMIC YEAR OF UNDERGRADUATE EDUCATION.

 

(C)                                  ALL OR PART OF THE BALANCE OF AN ELIGIBLE
EMPLOYEE’S EDUCATIONAL ACCOUNT, ADJUSTED FOR EARNINGS, GAINS AND LOSSES, MAY BE
WITHDRAWN BY THE ELIGIBLE EMPLOYEE ON A QUARTERLY BASIS TO PAY EXPENSES RELATED
TO TUITION, BOOKS, LODGING AND MEALS IN CONNECTION WITH THE POST-SECONDARY
UNDERGRADUATE OR GRADUATE-LEVEL EDUCATION (AS APPLICABLE) OF THE CHILD WITH
RESPECT TO WHOM THE ACCOUNT WAS ESTABLISHED, TO THE EXTENT INCURRED AT AN
ACCREDITED INSTITUTION OF HIGHER LEARNING; PROVIDED, HOWEVER, THAT LODGING
EXPENSES INCURRED AS A RESULT OF THE CHILD’S RESIDENCE IN A HOME OWNED DIRECTLY
OR INDIRECTLY BY THE ELIGIBLE EMPLOYEE SHALL NOT BE REIMBURSED. DISTRIBUTION OF
THE BALANCE OF AN EDUCATIONAL ACCOUNT SHALL BE GOVERNED BY SECTION 7.5.

 

5.3                               Investments

 

(A)                                  THE ASSETS OF THE FUNDING TRUST SHALL BE
INVESTED IN SUCH INVESTMENTS, INCLUDING SHARES, AS THE FUNDING TRUSTEE SHALL
DETERMINE. THE FUNDING TRUSTEE MAY (BUT IS NOT REQUIRED TO) CONSIDER THE
EMPLOYER’S OR A PARTICIPANT’S INVESTMENT PREFERENCES WHEN INVESTING THE ASSETS
ATTRIBUTABLE TO A PARTICIPANT’S ACCOUNT.

 

(B)                                 EQR MAY, AT ITS DISCRETION, PROVIDE THE
FUNDING TRUSTEE WITH THE OPPORTUNITY TO PURCHASE SHARES AT A DISCOUNTED PRICE ON
BEHALF OF ONE (1) OR MORE ELIGIBLE EMPLOYEES AND/OR ELIGIBLE TRUSTEES, SUBJECT
TO CONDITIONS ESTABLISHED BY EQR (WHICH MAY

 

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INCLUDE THE CONDITION THAT ANY SUCH ELIGIBLE EMPLOYEE HAS SURRENDERED OTHER
SIMILAR OPPORTUNITIES TO PURCHASE SHARES). IF THE EMPLOYER PROVIDES SUCH
OPPORTUNITY, IT WILL EITHER SELL SUCH COMMON SHARES DIRECTLY TO THE FUNDING
TRUSTEE OR MAKE CASH CONTRIBUTIONS AS NECESSARY TO PERMIT THE FUNDING TRUSTEE TO
BUY SUCH SHARES ON THE OPEN MARKET OR FROM OTHER SOURCES. THE PLAN ADMINISTRATOR
MAY IMPOSE RESTRICTIONS ON THE PURCHASE OF SHARES IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, THE SECURITIES EXCHANGE ACT OF 1934 OR ANY OTHER
APPLICABLE LAW.

 

(C)                                  SUBJECT TO PARAGRAPH (A) ABOVE, A
PARTICIPANT MAY REQUEST THAT THE FUNDING TRUSTEE HOLD THE FOLLOWING TYPES OF
INVESTMENTS IN SUCH PARTICIPANT’S ACCOUNT:

 

(I)                                     MUTUAL FUNDS (LOAD OR NO-LOAD)

 

(II)                                  SECURITIES TRADED ON THE NASDAQ NATIONAL
MARKET OR A NATIONAL SECURITIES EXCHANGE; PROVIDED, HOWEVER, THAT THIS PROVISION
SHALL ONLY APPLY TO SECURITIES ACQUIRED PRIOR TO JANUARY 1, 2003.

 

(D)                                 EXPENSE CHARGES FOR TRANSACTIONS PERFORMED
FOR EACH PARTICIPANT’S ACCOUNT SHALL BE PAID FROM EACH RESPECTIVE ACCOUNT AND
WILL BE LISTED ON THE QUARTERLY STATEMENT FOR SUCH ACCOUNT. OTHER PLAN CHARGES
AND ADMINISTRATIVE EXPENSES WILL BE PAID BY THE EMPLOYER.

 

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ARTICLE 6

 

VESTING

 

6.1                               General

 

(A)                                  A PARTICIPANT SHALL AT ALL TIMES HAVE A
FULLY VESTED AND NONFORFEITABLE RIGHT TO ALL ELECTIVE DEFERRALS CREDITED TO HIS
OR HER ACCOUNT, ADJUSTED FOR INCOME, GAIN AND LOSS ATTRIBUTABLE THERETO.

 

(B)                                 SUBJECT TO EARLIER VESTING AS PROVIDED IN
SECTIONS 6.2, 6.3 AND 6.4, A PARTICIPANT SHALL BECOME VESTED IN THE PORTION OF
HIS OR HER ACCOUNT DERIVED FROM A SHARE DEFERRAL CREDITED TO HIS OR HER ACCOUNT
ATTRIBUTABLE TO A RESTRICTED SHARE, ADJUSTED FOR INCOME, GAIN AND LOSS
ATTRIBUTABLE THERETO, AT THE SAME TIME THAT SUCH RESTRICTED SHARE WOULD HAVE
BECOME A SHARE THAT WAS NOT A RESTRICTED SHARE.

 

A Participant shall at all times have a fully vested and nonforfeitable right to
all Share Deferrals credited to his or her Account and attributable to
Unrestricted Shares, Share Options or Share Appreciation Rights.

 

(C)                                  SUBJECT TO EARLIER VESTING AS PROVIDED IN
SECTIONS 6.2, 6.3 AND 6.4, A PARTICIPANT SHALL BECOME VESTED IN THE PORTION OF
HIS OR HER ACCOUNT ATTRIBUTABLE TO MATCHING DEFERRALS CREDITED TO HIS OR HER
ACCOUNT, ADJUSTED FOR INCOME, GAIN AND LOSS ATTRIBUTABLE THERETO, BASED ON HIS
OR HER YEARS OF CREDITED SERVICE IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

 

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Years of Credited Service

 

Vested Percentage

 

less than 2

 

0

%

2

 

25

%

3

 

50

%

4

 

75

%

5 or more

 

100

%

 

6.2                               Change of Control

 

A Participant who is then in the employ of an Employer shall become fully vested
in his or her Account immediately prior to a Change of Control.

 

6.3                               Death or Disability

 

A Participant shall become fully vested in his or her Account immediately prior
to termination of the Participant’s employment by reason of the Participant’s
death or Total and Permanent Disability.

 

6.4                               Insolvency

 

A Participant who is then in the employ of an Employer shall become fully vested
in his or her Account immediately prior to his or her Employer’s becoming
Insolvent, in which case the Participant will have the same rights as a general
unsecured creditor of the Employer with respect to his or her Account balance.

 

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6.5                               Normal Retirement Age

 

A Participant shall become fully vested in his or her Account immediately prior
to a termination of the Participant’s employment on or after the Participant
attains his or her Normal Retirement Age.

 

ARTICLE 7

 

PAYMENTS

 

7.1                               Election as to Time and Form of Payment

 

(A)                                  SUBJECT TO THE LIMITATIONS OF THIS
ARTICLE 7, A PARTICIPANT MAY SPECIFY A DISTRIBUTION DATE FOLLOWING THE
TERMINATION OF A PARTICIPANT’S EMPLOYMENT AND SERVICE AS A MEMBER OF EQR’S BOARD
OF TRUSTEES APPLICABLE TO HIS OR HER ELECTIVE DEFERRALS, VESTED SHARE DEFERRALS
AND VESTED MATCHING DEFERRALS IN ACCORDANCE WITH THE FOLLOWING:

 

(I)                                     A PARTICIPANT MAY SPECIFY (ON THE
ENROLLMENT FORM) THE DATE OR AGE AT WHICH ALL ELECTIVE DEFERRALS, VESTED SHARE
DEFERRALS AND VESTED MATCHING DEFERRALS DESCRIBED IN THE LAST SENTENCE OF THIS
SUBPARAGRAPH (I), ADJUSTED FOR EARNINGS, GAINS AND LOSSES ATTRIBUTABLE THERETO,
WILL BE PAID OR COMMENCE TO BE PAID TO THE PARTICIPANT. SUCH SPECIFIED DATE MUST
RESULT IN DEFERRAL OVER A PERIOD OF AT LEAST ONE COMPLETE PLAN YEAR AND SHALL
APPLY TO ALL ELECTIVE DEFERRALS, VESTED SHARE DEFERRALS AND VESTED MATCHING
DEFERRALS FOR (A) THE PLAN YEAR FOR WHICH THE ENROLLMENT FORM IS FILED; (B) ANY
PRIOR PLAN YEAR, IN THE CASE OF A MATCHING DEFERRAL FOR WHICH NO ENROLLMENT
FORM WAS FILED; AND (C) ANY SUBSEQUENT

 

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PLAN YEAR THE LAST DAY OF WHICH IS AT LEAST ONE FULL PLAN YEAR BEFORE THE
PARTICIPANT’S ELECTED DISTRIBUTION DATE.

 

(II)                                  ON THE ENROLLMENT FORM FILED FOR THE FIRST
PLAN YEAR WITH RESPECT TO WHICH A DISTRIBUTION DATE ELECTION UNDER SUBPARAGRAPH
(I) WOULD NOT BE APPLICABLE (AND FOR THE FIRST PLAN YEAR WITH RESPECT TO WHICH
AN ELECTION UNDER THIS SUBPARAGRAPH WOULD NOT BE APPLICABLE PURSUANT TO THE LAST
SENTENCE OF THIS SUBPARAGRAPH), A PARTICIPANT MAY SPECIFY THE DATE ON WHICH
DISTRIBUTION OF THE PARTICIPANT’S ELECTIVE DEFERRALS, VESTED SHARE DEFERRALS AND
VESTED MATCHING DEFERRALS DESCRIBED IN THE LAST SENTENCE OF THIS SUBPARAGRAPH
(II), AS ADJUSTED FOR EARNINGS, GAINS AND LOSSES, WILL BE PAID OR COMMENCED TO
BE PAID TO THE PARTICIPANT. SUCH SPECIFIED DATE MUST RESULT IN DEFERRAL OVER A
PERIOD OF AT LEAST ONE COMPLETE PLAN YEAR AND SHALL APPLY TO ALL ELECTIVE
DEFERRALS, VESTED SHARE DEFERRALS AND VESTED MATCHING DEFERRALS (AS ADJUSTED)
FOR THE PLAN YEAR FOR WHICH THE ENROLLMENT FORM IS FILED, AND FOR ANY SUBSEQUENT
PLAN YEAR THE LAST DAY OF WHICH IS AT LEAST ONE FULL PLAN YEAR BEFORE THE
PARTICIPANT’S SPECIFIED DISTRIBUTION DATE.

 

(B)                                 IF APPROVED BY THE PLAN ADMINISTRATOR, A
PARTICIPANT MAY CHANGE A DATE ELECTED FOR DISTRIBUTION PURSUANT TO PARAGRAPH
(A); PROVIDED THAT (I) THE CHANGE IS FILED WITH THE PLAN ADMINISTRATOR NO LATER
THAN THE DECEMBER 31 THAT IS AT LEAST ONE PLAN YEAR BEFORE THE PLAN

 

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YEAR IN WHICH THE PREVIOUSLY ELECTED DATE OCCURS; AND (II) THE NEW DATE FOR
DISTRIBUTION OCCURS NO EARLIER THAN THE SECOND PLAN YEAR AFTER THE PLAN YEAR IN
WHICH THE PREVIOUS CHANGE OCCURS.

 

(C)                                  THE PARTICIPANT’S ELECTION UNDER THIS
SECTION 7.1 MAY PROVIDE FOR PAYMENTS TO BE MADE IN THE FORM OF EITHER:

 

(I)                                     A SINGLE LUMP-SUM PAYMENT; OR

 

(II)                                  ANNUAL INSTALLMENTS OVER A PERIOD ELECTED
BY THE PARTICIPANT OF UP TO TEN (10) YEARS, THE AMOUNT OF EACH INSTALLMENT TO
EQUAL THE THEN BALANCE OF THE ACCOUNT DIVIDED BY THE NUMBER OF INSTALLMENTS
REMAINING TO BE PAID. THE PARTICIPANT MAY SEPARATELY DESIGNATE THE DATE OR AGE
OF THE INITIAL PAYMENT AND THE DATE OR AGE THAT THE REMAINING PAYMENTS ARE TO
BEGIN; PROVIDED, HOWEVER, THAT ALL DISTRIBUTIONS MUST BE COMPLETED WITHIN TEN
(10) YEARS OF THE PARTICIPANT’S TERMINATION OF EMPLOYMENT AND SERVICE AS A
MEMBER OF EQR’S BOARD OF TRUSTEES.

 

A Participant who has made no election under this paragraph (c) or a participant
who has made such an election and wishes to change the election, may make an
election under this paragraph; provided that no election that is made other than
on the Enrollment Form to which an Elective Deferral, a Share Deferral or a
Matching Deferral is subject shall be effective until at least one full Plan
Year following the date the election is filed with the Plan Administrator. Any
such change shall also apply to all previous Enrollment Forms and Change Forms
filed by the Participant to the extent that the change satisfies the preceding
sentence in connection with such Forms.

 

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(D)                                 EXCEPT AS PROVIDED IN SECTIONS 7.2, 7.3,
7.4, 7.5 AND 7.6, PAYMENTS FROM A PARTICIPANT’S ACCOUNT SHALL BE MADE IN
ACCORDANCE WITH THE PARTICIPANT’S ELECTIONS UNDER THIS SECTION 7.1. IF NO
ELECTION IS MADE BY A PARTICIPANT, OR AN ELECTION IS INVALID, DISTRIBUTION SHALL
BE MADE IN A SINGLE LUMP SUM UPON THE TERMINATION OF THE PARTICIPANT’S
EMPLOYMENT.

 

(E)                                  PAYMENTS FROM A PARTICIPANT’S ACCOUNT SHALL
BE IN CASH OR IN KIND (COMPRISING ASSETS OF THE FUNDING TRUST), AS DETERMINED BY
THE FUNDING TRUSTEE. THE FUNDING TRUSTEE MAY (BUT IS NOT REQUIRED TO) CONSIDER
THE EMPLOYER’S OR A PARTICIPANT’S PREFERENCES WHEN DETERMINING THE FORM IN WHICH
PAYMENT IS MADE FROM THE PARTICIPANT’S ACCOUNT.

 

7.2                               Termination of Service

 

Upon termination of a Participant’s service as a member of EQR’s Board of
Trustees, or termination of a Participant’s employment with all Employers and
Extended Companies, as the case may be, for any reason other than death, the
vested portion of the Participant’s Account shall be paid to the Participant
according to the Participant’s distribution election, unless the Plan
Administrator elects, in its sole discretion, to pay out a Participant’s Account
balance in a single lump sum as soon as practicable following the date of
termination. An Employer shall have the right to offset against any payments
made to a Participant under this Section 7.2 an amount as is necessary to
reimburse the Employer for liabilities or obligations of the Participant to the
Employer, including for amounts misappropriated by the Participant.

 

7.3                               Death

 

(A)                                  IF A PARTICIPANT DIES PRIOR TO THE COMPLETE
DISTRIBUTION OF HIS OR HER ACCOUNT, THE VESTED PORTION OF THE PARTICIPANT’S
ACCOUNT SHALL BE PAID TO THE PARTICIPANT’S DESIGNATED BENEFICIARY OR
BENEFICIARIES, ACCORDING TO THE PARTICIPANT’S DISTRIBUTION ELECTION,

 

21

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UNLESS THE PLAN ADMINISTRATOR ELECTS, IN ITS SOLE DISCRETION, TO PAY OUT A
PARTICIPANT’S ACCOUNT BALANCE IN A SINGLE LUMP SUM AS SOON AS PRACTICABLE
FOLLOWING THE DATE OF TERMINATION.

 

(B)                                 A PARTICIPANT MAY DESIGNATE A BENEFICIARY BY
SO NOTICING THE PLAN ADMINISTRATOR IN WRITING, AT ANY TIME BEFORE PARTICIPANT’S
DEATH, ON A FORM PRESCRIBED BY THE PLAN ADMINISTRATOR FOR THAT PURPOSE. A
PARTICIPANT MAY REVOKE ANY BENEFICIARY DESIGNATION OR DESIGNATE A NEW
BENEFICIARY AT ANY TIME WITHOUT THE CONSENT OF A BENEFICIARY OR ANY OTHER
PERSON. IF NO BENEFICIARY IS DESIGNATED OR NO DESIGNATED BENEFICIARY SURVIVES
THE PARTICIPANT, PAYMENT SHALL BE MADE TO THE PARTICIPANT’S SURVIVING SPOUSE,
OR, IF NONE, TO THE PARTICIPANT’S ISSUE PER STIRPES, IN A SINGLE PAYMENT. IF NO
SPOUSE OR ISSUE SURVIVES THE PARTICIPANT, PAYMENT SHALL BE MADE IN A SINGLE LUMP
SUM TO THE PARTICIPANT’S ESTATE.

 

7.4                               Withdrawal Due to Unforeseeable Emergency

 

If a Participant experiences an Unforeseeable Emergency, the Plan Administrator,
in its sole discretion, may pay to the Participant only that portion, if any, of
the vested portion of such Participant’s Account which the Plan Administrator
determines is necessary to satisfy the emergency need, including any amounts
necessary to pay any federal, state or local income taxes reasonably anticipated
to result from the distribution. A Participant requesting an emergency payment
shall apply for the payment in writing using a form prescribed by the Plan
Administrator for that purpose and shall provide such additional information as
the Plan Administrator may require. A Participant receiving a withdrawal under
this Section 7.4 shall be suspended from making Elective Deferrals under the
Plan for the balance of the Plan Year of the withdrawal and for the next
following Plan Year.

 

22

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7.5                               Withdrawal Due to Educational Expense

 

(A)                                  ALL OR PART OF THE BALANCE OF AN
EDUCATIONAL ACCOUNT ESTABLISHED UNDER SECTION 5.2 SHALL BE DISTRIBUTED ON A
QUARTERLY BASIS AT THE PARTICIPANT’S REQUEST AS THE EXPENSES DESCRIBED IN
SECTION 5.2 ARE INCURRED BY OR FOR THE CHILD WITH RESPECT TO WHOM THE
EDUCATIONAL ACCOUNT WAS ESTABLISHED. THE PARTICIPANT’S REQUEST SHALL BE IN
WRITING, DELIVERED TO THE PLAN ADMINISTRATOR, ON A FORM PRESCRIBED FOR THAT
PURPOSE BY THE PLAN ADMINISTRATOR. THE PLAN ADMINISTRATOR MAY REQUIRE SUCH
DOCUMENTATION AS IT DEEMS NECESSARY TO SUBSTANTIATE SUCH EXPENSES.

 

(B)                                 NOTWITHSTANDING THE FOREGOING, 90% OF THE
BALANCE OF AN EDUCATIONAL ACCOUNT SHALL BE TRANSFERRED BACK TO THE ACCOUNT OF
THE PARTICIPANT AND THE BALANCE OF THE EDUCATIONAL ACCOUNT SHALL BE FORFEITED AS
OF THE EARLIER OF:  (I) THE DATE AS OF WHICH THE CHILD CEASES FULL-TIME PURSUIT
OF POST-SECONDARY UNDERGRADUATE OR GRADUATE-LEVEL EDUCATION (AS APPLICABLE) FOR
A PERIOD OF MORE THAN 12 CONSECUTIVE MONTHS; OR (II) WITH RESPECT TO (A) AN
EDUCATIONAL ACCOUNT ESTABLISHED TO FINANCE THE UNDERGRADUATE EDUCATION OF A
PARTICIPANT’S CHILD, THE CHILD’S 23RD BIRTHDAY, OR (B) AN EDUCATIONAL ACCOUNT
ESTABLISHED TO FUND THE GRADUATE EDUCATION OF A PARTICIPANT’S CHILD, THE CHILD’S
28TH BIRTHDAY.

 

(C)                                  NOTWITHSTANDING THE FOREGOING, 100% OF THE
BALANCE OF AN EDUCATIONAL ACCOUNT SHALL BE TRANSFERRED BACK TO THE PARTICIPANT’S
ACCOUNT IF THE CHILD WITH RESPECT TO WHOM THE EDUCATIONAL ACCOUNT IS ESTABLISHED
DIES BEFORE REACHING:  (I) AGE 23 WITH RESPECT TO AN EDUCATIONAL ACCOUNT
ESTABLISHED TO FINANCE THE CHILD’S UNDERGRADUATE EDUCATION, OR (II) AGE 28 WITH
RESPECT TO AN EDUCATIONAL ACCOUNT ESTABLISHED TO FINANCE THE CHILD’S
POST-GRADUATE EDUCATION.

 

23

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7.6                               Other Withdrawals

 

Upon the request of a Participant, the Plan Administrator, in its sole
discretion, may pay to the Participant any amount up to the vested portion of
the Participant’s Account. A Participant requesting a withdrawal under this
Section 7.6 shall apply for the payment in writing on a form prescribed by the
Plan Administrator for that purpose, and shall provide such additional
information as the Plan Administrator may require. The Plan Administrator will
pay 90% of the withdrawn amount to the Participant and the remaining 10% will be
forfeited. A Participant receiving a withdrawal under this Section 7.6 shall be
suspended from making Elective Deferrals and Share Deferrals under the Plan
until the next Entry Date that is at least twelve (12) months following his or
her receipt of such withdrawal. Notwithstanding the foregoing, and only in
connection with a one-time request during employment, no forfeiture amount shall
be applied with respect to a Participant distribution pursuant to this
Section 7.6, and no suspension of participation shall be required, if (a) the
distribution commences on or after the Participant attains age fifty (50) and
(b) the distribution election is made at least one complete Plan Year prior to
the distribution date.

 

7.7                               Forfeiture of Non-Vested Amounts

 

(A)                                  TO THE EXTENT THAT ANY AMOUNTS CREDITED TO
A PARTICIPANT’S ACCOUNT ARE NOT VESTED AT THE TIME SUCH AMOUNTS ARE OTHERWISE
PAYABLE UNDER SECTIONS 7.1 AND 7.2, THEY SHALL BE FORFEITED. SUCH FORFEITED
AMOUNTS, AS WELL AS FORFEITURES PURSUANT TO SECTIONS 7.5 AND 7.6, SHALL BE USED
TO SATISFY THE EMPLOYER’S OBLIGATION TO MAKE CONTRIBUTIONS TO THE FUNDING TRUST
UNDER THE PLAN.

 

(B)                                 IF (I) THE PLAN PAYS TO ANY TERMINATED
PARTICIPANT WHO IS NOT 100% VESTED IN HIS OR HER ACCOUNT, THE VESTED PORTION OF
HIS OR HER ACCOUNT PRIOR TO THE TIME SUCH PARTICIPANT

 

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HAS INCURRED FIVE (5) CONSECUTIVE BREAKS IN SERVICE FOR PURPOSES OF THE
QUALIFIED PLAN AND (II) SUCH PARTICIPANT RESUMES EMPLOYMENT AS AN ELIGIBLE
EMPLOYEE AFTER RECEIPT OF SUCH DISTRIBUTION AND BEFORE INCURRING FIVE
(5) CONSECUTIVE BREAKS IN SERVICE, THE PROVISIONS OF THIS SECTION 7.7(B) SHALL
APPLY. UPON SUCH REEMPLOYMENT, THE FORFEITED PORTION OF THE PARTICIPANT’S
ACCOUNT SHALL BE RESTORED TO HIS OR HER CREDIT AND AN ADDITIONAL EMPLOYER
CONTRIBUTION IN THAT AMOUNT SHALL BE MADE FOR THAT PURPOSE. THE RESTORED PORTION
OF THE ELIGIBLE EMPLOYEE’S ACCOUNT SHALL REMAIN SUBJECT TO THE TERMS OF THE PLAN
AND SHALL BE SUBJECT TO THE VESTING PROVISIONS OF ARTICLE 6, BUT SHALL INCLUDE
THE CREDITED SERVICE PRIOR TO AND FOLLOWING THE ELIGIBLE EMPLOYEE’S BREAKS IN
SERVICE.

 

7.8                               Taxes

 

Income taxes and other taxes payable with respect to an Account shall be
deducted from such Account. All federal, state or local taxes that the Plan
Administrator determines are required to be withheld from any payments made
pursuant to this Article 7 shall be withheld.

 

ARTICLE 8

 

PLAN ADMINISTRATOR

 

8.1                               Plan Administration and Interpretation

 

The Plan Administrator shall oversee the administration of the Plan.
Notwithstanding any other provision of the Plan to the contrary, the Plan
Administrator shall have complete control and authority to determine the rights
and benefits and all claims, demands and actions arising out of the provisions
of the Plan of any Participant, beneficiary, deceased Participant, or other
person having or claiming to have any interest under the Plan. The Plan
Administrator shall have complete discretion to interpret the Plan and to decide
all matters under the Plan. Such interpretation and decision shall be final,
conclusive and binding on all Participants and

 

25

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any person claiming under or through any Participant, in the absence of clear
and convincing evidence that the Plan Administrator acted arbitrarily and
capriciously. Any individual(s) serving as Plan Administrator who is a
Participant shall not vote or act on any matter relating solely to himself or
herself. When making a determination or calculation, the Plan Administrator
shall be entitled to rely on information furnished by a Participant, a
beneficiary, the Employer or the Funding Trustee. The Plan Administrator shall
have the responsibility for complying with any reporting and disclosure
requirements of ERISA.

 

8.2                               Powers, Duties, Procedures, Etc.

 

The Plan Administrator shall have such powers and duties, may adopt such
rules and tables, may act in accordance with such procedures, may appoint such
officers or agents, may delegate such powers and duties, may receive such
reimbursements and compensation, may determine fees to be paid by Participants
in connection with Plan administration, and shall follow such claims and appeal
procedures with respect to the Plan as the Plan Administrator may establish.

 

8.3                               Information

 

To enable the Plan Administrator to perform its functions, the Employer shall
supply full and timely information to the Plan Administrator on all matters
relating to the compensation of Participants, their employment, retirement,
death, termination of employment, and such other pertinent facts as the Plan
Administrator may require.

 

8.4                               Indemnification of Plan Administrator

 

EQR agrees to indemnify and to defend to the fullest extent permitted by law any
officer(s) or employee(s) who serve as Plan Administrator (including any such
individual who formerly served as Plan Administrator) against all liabilities,
damages, costs and expenses

 

26

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(including reasonable attorneys’ fees and amounts paid in settlement of any
claims approved by EQR in writing in advance) occasioned by any act or omission
to act in connection with the Plan, if such act or omission is in good faith.

 

ARTICLE 9

 

CLAIMS PROCEDURES

 

A PARTICIPANT, BENEFICIARY OR AN AUTHORIZED REPRESENTATIVE (A “CLAIMANT”) SHALL
MAKE ALL CLAIMS FOR BENEFITS UNDER THE PLAN IN WRITING ADDRESSED TO THE
ADMINISTRATOR AT THE ADDRESS OF THE COMPANY. EACH CLAIM SHALL BE REVIEWED BY THE
ADMINISTRATOR WITHIN A REASONABLE TIME AFTER IT IS SUBMITTED, BUT IN NO EVENT
LONGER THAN NINETY (90) DAYS AFTER IT IS RECEIVED BY THE ADMINISTRATOR. IF A
CLAIM IS WHOLLY OR PARTIALLY DENIED, THE CLAIMANT SHALL BE SENT WRITTEN NOTICE
OF SUCH FACT. IF A DECISION ON A CLAIM CANNOT BE RENDERED BY THE ADMINISTRATOR
WITHIN THE NINETY (90) DAY PERIOD, THE ADMINISTRATOR MAY EXTEND THE PERIOD IN
WHICH TO RENDER THE DECISION UP TO ONE HUNDRED EIGHTY (180) DAYS AFTER RECEIPT
OF THE WRITTEN CLAIM. THE DENIAL NOTICE, WHICH SHALL BE WRITTEN IN A MANNER
CALCULATED TO BE UNDERSTOOD BY THE CLAIMANT, SHALL CONTAIN (A) THE SPECIFIC
REASON(S) FOR THE ADVERSE DETERMINATION, (B) REFERENCE TO THE SPECIFIC PLAN
PROVISIONS ON WHICH THE ADVERSE DETERMINATION IS BASED, (C) A DESCRIPTION OF ANY
ADDITIONAL MATERIAL INFORMATION NECESSARY FOR THE CLAIM TO BE GRANTED AND AN
EXPLANATION OF WHY SUCH INFORMATION IS NECESSARY, AND (D) A DESCRIPTION OF THE
PLAN’S CLAIM REVIEW PROCEDURES, THE TIME LIMITS UNDER THE PROCEDURES AND A
STATEMENT REGARDING THE CLAIMANT’S RIGHT TO BRING A CIVIL ACTION UNDER
SECTION 502(A) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (“ERISA”)
FOLLOWING AN ADVERSE BENEFIT DETERMINATION ON APPEAL.

 

Within sixty (60) days after receipt by the claimant of written notice of the
denial, the claimant or his duly authorized representative may appeal such
denial by filing a written

 

27

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application for review with the Administrator at the address of the Company.
Each such application shall state the grounds upon which the claimant seeks to
have the claim reviewed. The claimant or his representative may request access
to all pertinent documents relative to the claim for the purpose of preparing
the application. The Administrator will then review the decision and notify the
claimant in writing of the result within sixty (60) days of receipt of the
application for review. The sixty (60) day period may be extended if specific
circumstances require an extension of time for processing, in which case the
decision shall be rendered as soon as possible, but no later than one hundred
twenty (120) days after receipt of the application for review. The appeal denial
notice, which shall be written in a manner calculated to be understood by the
claimant, shall contain (a) the specific reason or reasons for the adverse
determination, (b) reference to the specific Plan provisions on which the
adverse determination is based, (c) a statement that the claimant is entitled to
receive, upon written request and free of charge, access to and copies of all
documents, records and other information relevant to the benefit claim, and
(d) a statement regarding the claimant’s right to bring a civil action under
Section 502(a) of ERISA following an adverse benefit determination on appeal.

 

ARTICLE 10

 

AMENDMENT AND TERMINATION

 

10.1                        Amendment

 

EQR shall have the right to amend the Plan from time to time, subject to
Section 10.3, by an instrument in writing which has been executed on its behalf
by a duly authorized officer.

 

10.2                        Termination of Plan

 

The Plan is strictly a voluntary undertaking on the part of the Employers and
shall not be deemed to constitute a contract between an Employer and any
Eligible Employee (or any

 

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other employee) or any Eligible Trustee, a consideration for, or an inducement
or condition of employment for, the performance of the services by any Eligible
Employee (or other employee) or any Eligible Trustee. EQR reserves the right to
terminate the Plan at any time, subject to Section 10.3, by an instrument in
writing which has been executed on its behalf by a duly authorized officer. Upon
termination, EQR may (a) elect to continue to maintain the Funding Trust to pay
benefits hereunder as they become due as if the Plan had not terminated or
(b) direct the Funding Trustee to pay promptly to Participants (or their
beneficiaries) the vested balance of their Accounts. For purposes of the
preceding sentence, in the event clause (b) is implemented, the Account balance
of all Participants who are in the employ of an Employer at the time the Funding
Trustee is directed to pay such balances shall become fully vested and
nonforfeitable. After Participants and their beneficiaries are paid all Plan
benefits to which they are entitled, all remaining assets of the Funding Trust
attributable to Participants who terminated employment with the Employers prior
to termination of the Plan and who were not fully vested in their Accounts under
Article 6 at that time shall be returned to the Employers.

 

10.3                        Existing Rights

 

No amendment or termination of the Plan shall adversely affect the rights of any
Participant with respect to amounts that have been credited to his or her
Account prior to the date of such amendment or termination.

 

ARTICLE 11

 

MISCELLANEOUS

 

11.1                        No Funding

 

The Plan constitutes a mere promise by the Employers to make payments in
accordance with the term of the plan and participants and beneficiaries shall
have the status of general

 

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unsecured creditors of the Employers. Nothing in the Plan will be construed to
give any employee or any other person rights to any specific assets of an
Employer or of any other person. In all events, it is the intent of the
Employers that the Plan be treated as unfunded for tax purposes and for purposes
of Title I of ERISA. Subject to the foregoing, EQR shall have the authority to
establish and maintain a grantor trust for the purpose of providing benefits
under the terms of the Plan.

 

11.2                        Non-assignability

 

None of the benefits, payments, proceeds or claims of any Participant or
beneficiary shall be subject to any claim of any creditor of any Participant or
beneficiary and, in particular, the same shall not be subject to attachment or
garnishment or other legal process by any creditor of such Participant or
beneficiary, nor shall any Participant or beneficiary have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments or proceeds which he or she may expect to receive, contingently or
otherwise under the Plan.

 

11.3                        Limitation of Participant’s Rights

 

Nothing contained in the Plan shall confer upon any person a right to be
employed or to continue in the employ of an Employer or on the Board of Trustees
of EQR, or interfere in any way with the right of an Employer to terminate the
employment of a Participant in the Plan at any time, with or without cause.

 

11.4                        Participants Bound

 

Any action with respect to the Plan taken by the Plan Administrator or the
Funding Trustee or any action authorized by or taken at the direction of the
Plan Administrator, an

 

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Employer or the Funding Trustee shall be conclusive upon all Participants and
beneficiaries entitled to benefits under the Plan.

 

11.5                        Receipt and Release

 

Any payment to any Participant or beneficiary in accordance with the provisions
of the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the Employers, the Plan Administrator and the Funding Trustee under the
Plan, and the Plan Administrator may require such Participant or beneficiary, as
a condition precedent to such payment, to execute a receipt and release to such
effect. If any Participant or beneficiary is determined by the Plan
Administrator to be incompetent by reason of physical or mental disability
(including minority) to give a valid receipt and release, the Plan Administrator
may cause the payment or payments becoming due to such person to be made to
another person for his or her benefit without responsibility on the part of the
Plan Administrator, the Employers or the Funding Trustee to follow the
application of such funds.

 

11.6                        Governing Law

 

The Plan shall be construed, administered, and governed in all respects under
and by the laws of the State of Illinois to the extent not superseded by federal
law. If any provision shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions hereof shall continue to be
fully effective.

 

11.7                        Headings and Subheadings

 

Headings and subheadings in this Plan are inserted for convenience only and are
not to be considered in the construction of the provisions hereof.

 

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EXECUTED, on behalf of EQR, this 27th day of December, 2002.

 

 

 

EQUITY RESIDENTIAL

 

 

 

 

 

By:

/s/ Catherine Carraway

 

 

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