Exhibit 10.1

 

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Executive Bonus Plan
(EBP)
Amended as of January 1, 2006

 

 

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1.             PLAN OBJECTIVE

 

The Executive Bonus Plan (“EBP” or “the Plan”) has been designed to reward and
incent the efforts of certain key employees of CB Richard Ellis (“CBRE” or “the
Company”) to successfully attain the Company’s goals by directly tying the
Participant’s compensation to Company and individual results.   The EBP is also
designed to:

 

(a)           provide competitive compensation opportunities for key executive
employees; and

 

(b)           assist in retaining and attracting key employees for CBRE.

 

2.             EFFECTIVE DATE AND PLAN YEAR

 

This amended Plan shall be effective January 1, 2006 and supersedes and
replaces, in total, all prior versions of this Plan or any other bonus
guarantees.   A “Plan Year” starts on January 1 and ends December 31 of the same
year.

 

3.             PLAN ADMINISTRATION

 

Human Resources will administer the Plan, including participation, eligibility
criteria and payment of Awards, subject to final review and approval by the
Chief Executive Officer and the Board of Directors.  The Board of Directors may
delegate any of its duties hereunder in its discretion to its Compensation
Committee.

 

4.             ELIGIBILITY

 

4.1           Eligible employees (“Participants”) must be specifically
designated and approved by the Chief Executive Officer each year.   Eligibility
for participation in the EBP and receipt of bonus awards pursuant to the terms
and conditions of the Plan (“Awards”) will be limited to those employees whose
position affords the opportunity to materially affect the Company’s overall
profitability.  Unless otherwise specifically approved by the Chief Executive
Officer, employees who participate in any other Company bonus plan, including
without limitation the PRP or the SMBP plan, and employees who are paid on a
commission basis or participate in the bonus plan for commissioned salespersons,
are not eligible to participate in the EBP.

 

4.2           Participation for a Participant begins the first day of employment
or the designated effective date of an employee’s eligibility to participate in
the EBP.   Eligibility for the Plan does not guarantee payment of an Award ,
since payment is dependent upon earning the Award and the other provisions of
the EBP, including both individual and Company performance.

 

4.3           Participants who are newly hired, transfer to a new position or
become eligible to participate during a Plan Year are eligible to earn an Award
as follows:

 

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(a)           Newly-hired participants will be eligible for a pro-rated award
based on the number of full calendar weeks worked in the eligible position from
the first date of employment or the designated effective date during the Plan
Year.

 

(b)           Employees who transfer to a new position that is not currently
eligible for the Plan will be eligible for a prorated Award based on the number
of full calendar weeks worked in the eligible position during the Plan Year.

 

(c)           Employees who transfer or are promoted to another position and
remain eligible for another bonus plan, will be eligible to earn a prorated
Award for each position based on the number of full weeks worked in each
position during the Plan Year.  Eligibility to earn Awards will be based on the
number of full weeks an employee worked in each position and the applicable
Target Awards and/or ratings for each position.

 

4.4           If the employment status of a Participant changes prior to the
Payment Date (defined below), eligibility for an Award will depend on the reason
for the status change:

 

(a)           Resignation or termination for any reason:  Eligibility for Awards
is forfeited on resignation or termination for cause before the Payment Date.

 

(b)           Retirement: If a Participant retires under the Company retirement
plan (currently age 55 or older with at least 15 years of service or 65 years of
age with at least 10 years of service) and participated in the Plan for at least
six months of the Plan Year, eligibility for an Award may be prorated based on
the number of full weeks of participation in the Plan Year.  A prorated Award
will be paid at the time Awards are paid to all Participants.  If participation
in the Plan is less then six months during the Plan Year, the employee is not
eligible for an Award for that Plan Year.

 

(c)           Death or disability:  Eligibility to earn an Award for
Participants who dies or becomes disabled during a Plan Year will be prorated
based on the number of full weeks of participation in the Plan Year.  Any Award
will be paid at the time other Awards and bonuses are paid to all Participants. 
A Participant will be considered “disabled” if the Participant is disabled as
defined under the provisions of the Company’s Long-Term Disability Plan then in
effect.  For a Participant who dies prior to the Payment Date, the Award will be
paid to the Participant’s beneficiary as designated in the Participant’s group
term life insurance at the time of death.

 

5.             DISCRETIONARY COMPANY THRESHOLDS

 

Awards may not be paid to any Participant if the Company fails to achieve one or
more minimum financial performance targets (the “Discretionary Company
Thresholds”) as

 

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determined and set by the Company in its sole discretion.  The Discretionary
Company Thresholds may be set and/or amended by the Company at its sole
discretion at any time during the Plan Year and up to the date of payment of the
Awards under the Plan.  The Company will communicate the Discretionary Company
Thresholds to Participants from time to time, but no later than the date on
which the Awards are paid.

 

6.             TIMING OF CALCULATIONS, PAYMENTS

 

6.1           Awards are earned by performance during the Plan Year and by
remaining employed by the Company through the date Awards are paid (“Payment
Date”).

 

6.2           Subject to final approval by the Chief Executive Officer and the
Board of Directors, the Payment Date will be on or before March 15 following the
end of the fiscal year, but not before the completion of the audit of the
Company’s financial statements.

 

6.3           If a Participant’s employment terminates prior to the Payment
Date, the award is forfeited, unless the termination is caused by retirement,
death or disability, in which case payment is governed by Section 4.4 above.

 

6.4           It is intended that all Awards earned will be paid in cash. 
However, the Company reserves the right to distribute common stock in the
Company or other non-cash forms of compensation in lieu of cash in the event
economic circumstances dictate such action.

 

6.5           Federal and state income taxes and other required taxes will be
withheld from bonuses under applicable law.

 

7.             MAXIMUM ANNUAL BONUSES

 

The maximum Award to be received by any Participant shall not exceed 200% of the
Target Award (as defined below), inclusive of CEO Awards.

 

8.             CEO AWARDS

 

The Company reserves the right to award Participants in cases of exceptional and
exceedingly deserving circumstances through a supplemental discretionary bonus
award to be determined in the Chief Executive Officer’s sole discretion
(subject, in the case of Section 16 officers to the ratification by the
Compensation Committee), referred to as a “CEO’s Award.”

 

9.             AWARD CALCULATION

 

9.1           Employees are eligible for an Award each Plan Year, based on
(a) financial measures (“Financial Performance Targets”) for the Company,
business unit or line of business and (b) individual achievement of important
Company or individual

 

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objectives in each Participant’s area of responsibility (“Strategic Performance
Measures”).

 

9.2           Target Awards:

 

(a)           Each Participant will be assigned a “Target Award” by the Company
in its sole discretion (generally based on a Participant’s position and that
position’s potential contribution to the Company) by March 1 of each Plan Year. 
For new hires or newly eligible Participants (whether by transfer or promotion),
the Target Award will be set within sixty (60) days of eligibility for the Plan.

 

(b)           Target Awards will be weighted based on achievement of Financial
Performance Targets and Strategic Performance Measures established at or near
the beginning of a Plan Year for each Participant.  As between Financial
Performance Targets and Strategic Performance Measures, Awards will be weighted
as follows:

 

1.     Awards for the Chief Executive Officer, the President of a Global Region
or a line of business leader, will be weighted 80% on Financial Performance
Targets (of the Company for the Chief Executive Officer, the region for the
regional President and LOB for the line of business leader) and 20% on
individual achievement of Strategic Performance Measures.

 

2.     Awards for Participants who serve in Executive Staff positions (e.g.,
CFO, Controller and General Counsel) will be weighted 60% on Financial
Performance Targets and 40% on individual achievement of Strategic Performance
Measures.

 

(c)           In the event that a Target Award amount is changed during a Plan
Year, the payment of that year’s bonus award will be pro-rated based on the
number of full weeks that each respective Target was in force, unless other
written agreements supersede this provision.

 

9.3           Financial Performance Targets:

 

Financial Performance Targets are approved by the Chief Executive Officer and
the Board of Directors at or near the beginning of each Plan Year.  For the 2006
Plan Year, EBITDA will be the metric utilized to set Financial Performance
Targets for the Company, regions, business units and lines of business.  The
Company reserves the right to change the Financial Performance Target metric
each year.

 

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9.4           Strategic Performance Measures:

 

(a)           Participants must have a minimum of three and a maximum of six
measurable Strategic Performance Measures set by the Company in writing by
March 1 of each Plan Year.

 

(b)           For new hires or newly eligible Participants (whether by transfer
or promotion), the Strategic Performance Measures must be set within sixty (60)
days of eligibility for the Plan.

 

(c)           Non-submission of Strategic Performance Measures to the Chief
Executive Officer (or in the case of the Chief Executive Officer’s and other
Section 16 officers’ Strategic Performance Measures, the Board of Directors)
will make the Participant ineligible for an Award.

 

(d)           Each Strategic Performance Measure will be assigned a weight by
the Participant’s Manager, subject to the approval of the Chief Executive
Officer. The weighted Strategic Performance Measures for the Chief Executive
Officer and other Section 16 officers will be approved by the Board of
Directors. The aggregate weightings of all Strategic Performance Measures must
equal 100%.

 

9.5           Calculation of Awards:  At the conclusion of the Plan Year,
assuming the Discretionary Company Thresholds are satisfied, Awards are
calculated by adding the Financial Performance Award (as calculated and defined
in Section 9.5(a) below) and the Strategic Performance Measure Award (as
calculated and defined in Section 9.5(b) below).

 

(a)           Financial Performance Award:  Actual financial performance is
compared to the Financial Performance Targets and an Adjustment Factor is
determined as follows:

Achievement
Against Financial
Performance Target

 

Adjustment Factor

 

Example

0 – 70%

 

0

 

0% Adjustment Factor

70% - 100%

 

3.3x for every 1% over 70% up to 100%

 

90% of target = 66%
Adjustment Factor (20% x 3.3)

100% - 200%

 

100% plus 3.3x for every 1% over 100% up to an additional 100%

 

120% of target = 166%
Adjustment Factor
(100% + 3.3 x 20%)

 

The Adjustment Factor is then multiplied by the dollar amount of the Target
Award allocated to Financial Performance Targets (i.e., 80% of the Target Award
for the Chief Executive Officer, the Presidents of a Global Region or line of
business leaders, or 60% for the Executive Staff positions).  This amount equals
the “Financial Performance Award.”

 

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(b)           Strategic Performance Measure Award: Performance against each
Strategic Performance Measure will be rated on a scorecard using a scale of 1
through 5, with 1 being “far below expectations” or its equivalent and 5 being
“far exceeds expectations” or its equivalent.  The scorecard will also contain
space for qualitative comments regarding the Participant’s performance (e.g.,
describing special circumstances).  The information on the scorecard, taken as a
whole, is then used to determine the amount of the Strategic Performance Measure
Award, from zero to a maximum of 150% of the dollar amount of the Target Award
allocated to Strategic Performance Measures (i.e., 20% of the Target Award for
the Chief Executive Officer, the Presidents of a Global Region or line of
business leaders, or 40% for the Executive Staff positions).  The final
Strategic Performance Measure Award payout recommendation will be made by the
Participant’s Manager, subject to the approval of the Chief Executive Officer,
or in the case of the Chief Executive Officer and the other Section 16 officers,
the Board of Directors.

 

(c)           Notwithstanding the foregoing, if Discretionary Company Thresholds
are not met, no Award will be paid.

 

10.          SUSPENSION, AMENDMENT OR TERMINATION OF THE PLAN

 

The Company reserves the right at any time prior to payment of the Awards to
review, interpret, alter, amend, or terminate (discontinue) – with or without
notice – the Executive Bonus Plan, including, without limitation, the
calculation and method of and eligibility for Award payments.  This Plan does
not constitute a contract of employment (express or implied) and cannot be
relied upon as such.  This Plan does not alter the at will employment
relationship between the Company and the Plan Participants.

 

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