<PAGE>
                                                                    Exhibit 10.4


                               CB RICHARD ELLIS
                               ----------------

                          DEFERRED COMPENSATION PLAN
                          --------------------------

               (As Amended and Restated Effective June 1, 2001)
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page
<S>                                                                             <C>
1.   PURPOSE..................................................................    1

2.   DEFINITIONS..............................................................    1

3.   ELIGIBILITY AND ELECTIONS TO MAKE DEFERRALS..............................    5

4.   ACCOUNTS, DEFERRALS AND COMPANY MATCHES..................................    8

5.   DEEMED INVESTMENT OPTIONS................................................   10

6.   VESTING OF ACCOUNTS......................................................   10

7.   DISTRIBUTION OF ACCOUNTS.................................................   11

8.   PLAN ADMINISTRATION......................................................   12

9.   NO FUNDING OBLIGATION; RABBI TRUST.......................................   13

10.  NONALIENATION OF BENEFITS................................................   14

11.  NO LIMITATION OF EMPLOYER RIGHTS.........................................   14

12.  APPLICABLE LAW...........................................................   14
</TABLE>


Exhibit A .............................  Participating Employers

Appendix A.............................  The Company Match Program
                                         (1999 and 2000 Only)

Appendix B.............................  Retention Program (2000 Only)

Appendix C.............................  Recruitment Program

Appendix D.............................  Interest Index Fund I Units

Appendix E.............................  Consequences and Options to Plan
                                         Participants Upon Merger

                                       1
<PAGE>

                                CB RICHARD ELLIS
                               ----------------

                          DEFERRED COMPENSATION PLAN
                          --------------------------

               (As Amended and Restated Effective June 1, 2001

1.   PURPOSE
     -------

     The purpose of the CB Richard Ellis Deferred Compensation Plan, as amended
and restated effective June 1, 2001 (the "Plan"), is to allow a select group of
management or highly compensated employees of CB Richard Ellis Services, Inc.
("CBRES") and its affiliates that adopt this Plan to defer receipt of
Compensation. The Plan is intended to be an unfunded plan maintained 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 the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). Appendix E to the Plan describes the consequences
and options available to Participants in the event the Company merges with Blum
CB Corp. (a wholly-owned subsidiary of CBRE Holding, Inc.) in a "going private"
transaction.

2.   DEFINITIONS
     -----------

     Whenever referred to in this Plan, the following terms shall have the
meanings set forth below except where the context indicates otherwise.

     2.1  "Account" means a Participant's Company Account or Employee Account,
           -------
or both, as the context requires. The value of an Account will be determined by
the Committee in its discretion, based upon the Participant's elections pursuant
to Section 5 or the requirements of the Plan as to whether net income, gain or
loss should be measured by (a) Mutual Fund Units (b) Stock Fund Units or (c)
Interest Index Fund II Units.

     2.2  "Beneficiary" means the person or persons who are the Participant's
           -----------
beneficiaries pursuant to the Employer's group term life insurance programs
unless otherwise designated by the Participant for purposes of this Plan on a
form prescribed by the Committee. In the event of any ambiguity or uncertainty
regarding designation of one or more beneficiaries, the Committee shall
determine the same in its discretion based on all facts and circumstances, and
such determination shall be binding on all interested persons.

     2.3  "Code" means the Internal Revenue Code of 1986, as amended.
           ----

     2.4  "Company Contribution" means an unsecured and unfunded promise of an
           --------------------
Employer not resulting from a Deferral consisting of a credit of Stock Fund
Units, or Interest Index Fund II Units or Mutual Fund Units to a Participant's
Account by the Employer in accordance with Appendix A (1999 and 2000 Company
Match Program), Appendix B (Retention Program) and Appendix C (Recruitment
Program).

                                       2
<PAGE>

     2.5   "Committee" means the Chief Executive Officer of CB Richard Ellis
            ---------
Services Inc., or a committee consisting of three or more employees of the
Employer selected by such Chief Executive Officer.

     2.6   "Company Account" means a Participant's account established under
            ---------------
Section 4.1 of this Plan and maintained by the Committee as an unfunded and
unsecured book entry reflecting the liability of the Employer to a Participant
in the amount of the Participant's accumulated Company Contributions (if any)
and net income, gain or loss imputed thereto in accordance with a Participant's
investment measurement designations as permitted by the Plan. Subaccounts of the
Company Account may be established by the Committee under Section 4.1.

     2.7   "Company Insurance Fund Subaccount" means the subaccount so described
            ---------------------------------
in Section 4.1.


     2.8   "Company Interest Index Fund II Subaccount" means the subaccount so
            -----------------------------------------
described in Section 4.1.

     2.9   "Company Stock Fund Subaccount" means the subaccount so described in
            -----------------------------
Section 4.1.

     2.10  "Compensation" means a Participant's remuneration for services
            ------------
rendered to an Employer or another person, as determined by the Committee in its
complete discretion, consisting of "wages" as shown on Form W-2 (a) excluding
(i) income resulting from forgiveness of interest or principal on indebtedness
to an Employer, (ii) distributions under this Plan that would otherwise be
includable as such "wages," (iii) draws against future commissions even if
"wages" for Form W-2 purposes, (iv) income resulting from the exercise of stock
options or lapse of restrictions on sales of restricted stock, and (v) amounts
intended to reimburse the Participant for costs or expenses, and (b) increased
by (i) Deferrals under this Plan, and (ii) deferrals under the CB Richard Ellis
401(k) Plan and deferrals pursuant to any cafeteria plan of an Employer or any
other pre-tax deferrals the Committee determines to be similar. The Committee,
in its discretion in a particular case, may adjust "Compensation" by adding back
items described in clause (a) of the preceding sentence or subtracting items
described in clause (b) of the preceding sentence, or adding or subtracting
other items, for one or more individual purposes of the Plan. In the case of an
Eligible Employee who is an independent contractor, the foregoing definition
shall be applied as determined by the Committee, but generally by the
substitution of remuneration amounts reportable on Form 1099 for "wages"
reportable on Form W-2. For purposes of determining whether or not a person is
an Eligible Employee, Compensation may, as determined by the Committee or as
provided herein, include Compensation paid by a former Employer.

     2.11  "Deferral" means the portion of Compensation elected by a Participant
            --------
to be deferred in accordance with the Plan.

     2.12  "Deferral Date" means January 1 of each year or such other dates as
            -------------
may be set from time to time by the Committee.

                                       3
<PAGE>

     2.13 "Eligible Employee" means an employee or a full time independent
           -----------------
contractor of an Employer who is both designated by the Committee and meets the
criteria of this Section 2.13. The term independent contractor may include a
corporation not required to use the accrual method of accounting for tax
purposes. With reference to an employee who is compensated partially or entirely
by salary, such employee shall be an Eligible Employee as of a Deferral Date if
the Committee determines that as of such Deferral Date the employee's
Compensation on an annualized basis is $100,000 ($150,000 for 2002 and
subsequent years) or more. For 2001 and earlier years, with reference to an
employee or independent contractor compensated entirely on an incentive, bonus
or commission basis, such employee or independent contractor shall be an
Eligible Employee "as of the applicable Deferral Date," as that phrase is used
in the first sentence of Section 3.1, if he or she has received Compensation of
$100,000 or more with respect to the current or the preceding year. For 2002 and
subsequent years, with reference to an employee or independent contractor
compensated entirely on an incentive, bonus or commission basis, such employee
or independent contractor shall be an Eligible Employee "as of the applicable
Deferral Date," as that phrase is used in the first sentence of Section 3.1, if
(a) his or her Compensation for the previous year exceeded $150,000 or (b) he or
she has received Compensation of $150,000 or more without the effect of
annualization for the portion of the Plan Year preceding a Deferral Date which
ends with the date his or her Deferral election is accepted by the Committee or
any earlier date set by the Committee.

     2.14 "Employee Interest Index Fund II Subaccount" means the account as
           ------------------------------------------
described in Section 4.1.

     2.15 "Employee Insurance Fund Subaccount" means the subaccount so described
           ----------------------------------
in Section 4.1.

     2.16 "Employee Stock Fund Subaccount" means the subaccount so described in
           ------------------------------
Section 4.1.

     2.17 "Employee Account" means a Participant's account established under
           ----------------
Section 4.1 of this Plan and maintained by the Committee as an unfunded and
unsecured book entry reflecting the liability of the Employer to a Participant
in the amount of the Participant's accumulated Deferrals (if any) and net
income, gain or loss imputed thereto in accordance with a Participant's
investment measurement designations as permitted by the Plan. Subaccounts of the
Employee Account may be established by the Committee under Section 4.1.

     2.18 "Employer" means CBRES and any entity as to which CBRES directly or
           --------
indirectly controls 80% or more of the equity or voting interests that is so
designated by the Committee on Exhibit A.

     2.19 "In Service Payment Quarter" is defined in Section 3.4(b)(i).
           --------------------------

     2.20 "Interest Index Fund I Unit" means a unit of value established by the
           --------------------------
Committee as a means of measuring value of the Interest Index Fund I-related
portion of an Account under the Plan.

                                       4
<PAGE>

     2.21  "Interest Index Fund II" means a theoretical fund that credits
            ----------------------
interest on Account balances at a compound annual rate of 11.25 percent.

     2.22  "Interest Index Fund II Unit" means a unit of value established by
            ---------------------------
the Committee as a means of measuring value of the Interest Index Fund
II-related portion of an Account under the Plan.

     2.23  "Liquidity Date" means (a) 180 days after CBRE Holding, Inc.
            --------------
completes an underwritten public offering of not less than $50 million of its
Class A common stock or (b) the effective date of any merger of CBRE Holding,
Inc. with another entity pursuant to which the shareholders of CBRE Holding,
Inc. receive cash or marketable securities or (c) the date on which the
Participant must be a shareholder of CBRE Holding, Inc. in order to participate
in a "Co-Sale" or "Required Sale" procedure of CBRE Holding, Inc. (but only as
to the maximum number of shares of Stock such Participant can sell in such
procedure).

     2.24  "Mutual Fund Options" means one or more mutual funds designated from
            -------------------
time to time by the Committee to measure net income, gain or loss with respect
to Company or Employee Insurance Fund Subaccount.

     2.25  "Mutual Fund Unit" means the unit of value as used by the measuring
            ----------------
mutual funds to value any Mutual Fund Options.

     2.26  "Participant" means any Eligible Employee who has made an election to
            -----------
defer Compensation under Section 3.1 or for whom the Plan maintains an Account.

     2.27  "Payment Quarter" means the calendar quarter in which a distribution
            ---------------
is scheduled to be made, or commences, that is made, or selected by a
Participant under Section 3.4.

     2.28  "Plan" means this Deferred Compensation Plan, as hereby amended and
            ----
restated, and as thereafter amended.

     2.29  "Plan Year" means the calendar year.
            ---------

     2.30  "Rabbi Trust" means the trust established by the Committee under
            -----------
Section 9 of this Plan to hold title to assets identified by the Employer as
being reserved for purposes of offsetting Plan benefits.

     2.31  "Stock" means the Common Stock, par value $0.01 per share, of CBRES.
            -----
In the event of any change in the outstanding shares of Stock that occurs by
reason of a stock dividend or split, recapitalization, merger, consolidation,
combination, exchange of shares, or other similar corporate change, the
aggregate number of shares of Stock Fund Units credited to any Participant's
Stock Fund Account shall be adjusted appropriately by the Committee as though
they were shares of Stock. The Committee's determination shall be final and
conclusive. Fractional shares shall be rounded to the lowest whole share.

                                       5
<PAGE>

     2.32  "Stock Fund Unit" means a unit of value, equal at any relevant time
            ---------------
to the value of a share of Stock, established by the Committee as a means of
measuring value of the Stock-related portion of an Account under the Plan.

     2.33  "Termination of Employment" means any voluntary or involuntary
            -------------------------
termination of employment with any entity forming a part of the Employer,
including on account of death or Total and Permanent Disability, but does not
include a transfer of employment among the entities which form a part of the
Employer, unless such transfer is otherwise determined to be a Termination of
Employment by the Committee in its sole discretion.

     2.34  "Termination Payment Quarter" is defined in Section 3.4(b)(ii).
            ---------------------------

     2.35  "Total and Permanent Disability" has the same meaning given to such
            ------------------------------
term or comparable term under the Company's long term disability plan as in
effect from time to time.

3.   ELIGIBILITY AND ELECTIONS TO MAKE DEFERRALS
     -------------------------------------------

     3.1  Eligibility. Only persons who are Eligible Employees as of the
          -----------
applicable Deferral Date, and who have then satisfied Deferral election
procedures established by the Committee, shall be eligible to make Deferrals for
the Plan Year in which the Deferral Date falls. Compensation of an Eligible
Employee otherwise payable to the Eligible Employee during the period commencing
on a Deferral Date and ending on the earlier of (a) the last day of the Plan
Year which includes such Deferral Date or (b) the effective date of the
termination of the Plan, or an amendment of the Plan curtailing Deferrals, may
be deferred in accordance with Section 3.2.

     3.2  Elections. An Eligible Employee's election to make a Deferral shall
          ---------
meet the requirements of this Section 3.2, but shall otherwise be in accordance
with such limitations, restrictions and forms as the Committee, or its delegate,
may prescribe in its discretion. An election to make a Deferral shall be in
writing on a form prescribed by the Committee and shall be delivered in such
manner as specified by the Committee. The election shall specify the Deferral
Date to which it applies and shall be completed prior to such Deferral Date. The
election shall be irrevocable, except to the extent that the Committee may, in
its discretion, permit an amendment of an election to occur in accordance with
Section 3.4. For 2001 and preceding Plan Years (but not any Plan Year after
2001), the election of any person who is compensated entirely on an incentive,
bonus or commission basis may only defer Compensation for any Plan Year which is
in excess of $100,000. A separate election to defer must be made for each
successive Plan Year no later than the Deferral Date for that Plan Year. For
elections made after 1998, the minimum annual Deferral shall be $5,000 (any
Deferrals for a Plan Year of less than $5,000 will be returned to the
Participant) and 100% of a bonus may be deferred. No amounts may be deferred
which are required to satisfy income and payroll tax withholding, and benefit
plan contributions for the Participant (including taxable income required to
satisfy Code Section 415 in light of the qualified plan deferral elected) or
garnishments or other payroll obligations under process of law.

     3.3  Initial Year of Hire. Except as may be determined otherwise by the
          --------------------
Committee, in its discretion, an Eligible Employee initially hired by the
Company during a Plan Year after

                                       6
<PAGE>

1998 shall first become eligible to defer as of the Deferral Date next following
the Eligible Employee's date of hire with the Company.

     3.4  Terms of Deferral Elections.
          ---------------------------

          (a)  Conformance of Form of Distributions to Post-May 1, 1999 Options.
               ----------------------------------------------------------------
Effective May 1, 1999, elections made prior to 1999 shall be automatically
amended to alter the originally elected form of distribution to conform, as
determined by the Committee, either (1) to a new election provided by the
Participant or (2) to the most closely similar form of distribution available
under the remainder of this Section 3.4, including application of the
requirement set forth in Section 7.2 that subaccounts of Accounts, attributable
to a single Plan Year's Deferral election, of $25,000 or less be distributed as
a lump sum. However, the Committee shall have the discretion to maintain one or
more distribution or other features of an election made prior to 1999.

          (b)  Initial Selection of Payment Years. If an Eligible Employee
               ----------------------------------
elects a Deferral for a Plan Year (or permitted shorter period) commencing after
1998, the Eligible Employee, in consideration of his acceptance of the benefits
of the Plan, becomes a Participant bound by the terms and conditions of the Plan
and must elect with respect to such Deferral, to defer payment to one of the
following Payment Quarters:

               i)   The second calendar quarter of a calendar year specified by
                    the Participant, which shall be at least the third calendar
                    year commencing after the close of the calendar year in
                    which the Deferral election is effective, and in which
                    quarter distribution shall be made or commence to be made in
                    the form described in Section 3.4(c), notwithstanding the
                    Participant's continuing employment ("In Service Payment
                    Quarter"); or

               ii)  Any calendar quarter after the calendar quarter of the
                    Participant's Termination of Employment ("Termination
                    Payment Quarter").

     In the case of amount credited to any Company Account or any Employee Stock
Fund Subaccount, the Participant's sole choice shall be to defer payment to a
Termination Payment Quarter.

          (c)  Available Forms of In Service Distribution. A Participant
               ------------------------------------------
electing an "in-service distribution" under subsection 3.4(b)(i) may elect in
his or her Deferral election form to receive the distribution of that portion of
his Account attributable to the particular Plan Year's Deferral, and net
earnings (if any) thereon, as a lump sum payable within the first thirty days of
the applicable In Service Payment Quarter, or in annual installments, over two,
three, four, or five years. If such an In Service Payment Quarter election fails
to designate a form of distribution, the Participant shall be deemed to have
elected the lump sum distribution described in the preceding sentence.

                                       7
<PAGE>

          (d)  Available Forms of Termination Distribution. A Participant
               -------------------------------------------
electing a "termination distribution" under subsection 3.4(b)(ii) may elect in
his or her Deferral election form to receive the distribution of the vested
portion of his or her Company and Employee Accounts (a) as a lump sum payable on
a date specified in the form which is not more than ten years after his or her
Termination of Employment date (or if the merger described in Appendix E has
become effective, a Liquidity Date but only with respect to vested Stock Fund
Subaccounts) or (b) as annual installments, over five, ten, or fifteen years,
with the first annual installment payable during the first month of the
Termination Payment Quarter and subsequent installments paid on approximately
the anniversary of the first installment. If such a Termination Payment Quarter
election fails to designate a form of distribution, the Participant shall be
deemed to have elected the lump sum distribution described in the preceding
sentence. In the case of an Employee or Company Stock Fund Subaccount, all
distributions will be made in the form of shares of Stock; provided, however,
that before receiving a certificate for such shares, the Participant must enter
into a stockholders or similar agreement generally applicable to employee
shareholders of CBRE Holding, Inc. The Participant will not be obligated to
enter into any such agreement to the extent he or she receives shares of Stock
pursuant to subparagraph (a) or (b) of the definition of Liquidity Date.

          (e)  Limited Option to Amend Elections. Once submitted to the
               ---------------------------------
Committee in accordance with its procedures, a Deferral election shall be
irrevocable except as provided in this subsection (e). A Participant may, so
long as such Participant is employed by the Employer, elect, in accordance with
Committee procedures, (1) to amend an In Service Payment Quarter election made
under subsection (b)(i) to provide for a later In Service Payment Quarter, to
alter the form of distribution to the extent permitted by Section 3.4(c), or to
convert the election to a Termination Payment Quarter election meeting the
requirements of Section 3.4(d), or (2) to amend the form (installment or lump
sum) of distribution under a Termination Payment Quarter election made in
accordance with subsection (d), provided the conditions of this subsection (e)
are also met, as follows:

               i)   If the Participant's initial election is for distribution in
                    an In Service Payment Quarter, up to two amended elections
                    may be made in writing. Any such amended election must be
                    made by the December 31 falling fifteen months prior to the
                    existing In Service Payment Quarter. Any further amended
                    elections beyond two may be made only with Committee
                    consent. Notwithstanding subsection (b)(i), an amended
                    election may change the In Service Payment Quarter to the
                    second calendar quarter of any subsequent Plan Year,
                    including the next calendar year commencing immediately
                    after the initially elected In Service Payment Quarter; and

               ii)  If the Participant's existing election is for distribution
                    in a Termination Payment Quarter, any amendment thereof will
                    not take effect, and the previous election shall remain in
                    effect, unless the amended election is made in writing at
                    least 365 days preceding the Participant's Termination of
                    Employment and the

                                       8
<PAGE>

                    amendment may not convert the election to an In Service
                    Payment Quarter election.

          (f)  Default Election Form. If a Deferral election specifies an
               ---------------------
amount, but does not specify that it is an In Service Payment Quarter election
or Termination Payment Quarter election, or is otherwise defective, in the
Committee's opinion, the Participant shall be deemed a Termination Payment
Quarter election providing for a lump sum distribution.

4.   ACCOUNTS, DEFERRALS AND COMPANY MATCHES
     ---------------------------------------

     4.1  The Committee or its delegate shall establish (i) a Company Account
for each Participant to which the Participant's Company Contributions (if any)
and share of income, gains and losses allocable thereto, shall be credited (in
accordance with Sections 2.1 and 4.5), and from which distributions under
Section 7 shall be withdrawn and (ii) an Employee Account for each Participant
to which the Participant's Deferrals (if any) and share of income, gains and
losses allocable thereto, shall be credited (in accordance with Sections 2.1 and
4.5), and from which distributions under Section 7 shall be withdrawn. The
Committee or its delegate shall establish subaccounts of each such Account as
may be necessary for vesting, distribution or other administrative distinctions
of the Plan including, without limitation, the following:

          (a)  A "Company Stock Fund Subaccount" reflecting Company
Contributions in the form of Stock Fund Units credited to the Company Account
and net income, gain or loss allocable thereto.

          (b)  A "Company Insurance Fund Subaccount" reflecting credits (which
may be unfunded or funded by the Company with contributions to the Rabbi Trust)
to such subaccounts is adjusted for net income, gains and losses upon Mutual
Fund Options as elected by the Participant. Such subaccount shall, for Plan
Years after 2000, be subject to an expense charge equal to the sum of (1) any
actual expenses charged to the Company by the insurance company which provides
the Mutual Fund Options, and (ii) Company charges, not to exceed 0.5 percent per
year, to reflect the Company's cost of maintaining the subaccount.

          (c)  A "Company Interest Index Fund II Subaccount" reflecting credits
by the Company to such account adjusted for interest at an annual compound rate
of 11.25 percent. No allocations to Interest Index Fund II Units will be
permitted when the total of all such allocations exceeds $20 million (exclusive
of the 2000 Company Match). CBRES will maintain Interest Index Fund II through
June 30, 2006. At that time it may elect to terminate such fund or change the
interest rate from 11.25% to the rate charged to CBRES under its principal bank
credit agreement. If CBRES elects to terminate Interest Index Fund II, any
Participant who has an interest therein may either receive the balance credited
to his or her Company Interest Index Fund II Subaccount and Employee Interest
Index Fund II Subaccount in cash or have such balance reallocated to the
Insurance Fund. Such election must be made on or before December 31, 2001 but if
the election is to reallocate the balance to the Insurance Fund, the election as
to Mutual Fund Options may be made at the time the Interest Index Fund II is
terminated.

                                       9
<PAGE>

          (d)  An "Employee Stock Fund Subaccount" reflecting the Participant's
Deferrals to the extent deemed invested, pursuant to the Participant's election,
in Stock Fund Units, and net income, gain or loss allocable thereto.

          (e)  An "Employee Insurance Fund Subaccount" reflecting the
Participant's Deferrals credited to one or more Mutual Fund Options, where the
deemed value, at any relevant time, of such Employee Insurance Fund Subaccount
is the then aggregate of credits to such subaccount representing such Deferrals
adjusted for net income, gains and losses upon Mutual Fund Options elected by
the Participant. Such subaccount shall, for Plan Years after 2000, be subject to
an expense charge equal to the sum of (1) any actual expenses charged to the
Company by the insurance company which provides the Mutual Fund Options, and
(ii) Company charges, not to exceed 0.5 percent per year, to reflect the
Company's cost of maintaining the subaccount.

          (f)  An "Employee Interest Index Fund II Subaccount" reflecting the
Participant's Deferrals to such account adjusted for interest at an annual
compound rate of 11.25 percent.

          (g)  Subaccounts of any of the subaccounts described in (a) - (f) of
this Section 4.1 are attributable to the Deferral election of a Participant for
a particular Plan Year.

     Except as specifically required by the Plan, the Committee shall determine
the accounting rules for Accounts in its complete discretion.

     4.2  If permitted by CBRES, an Employer may, in its complete discretion,
credit, as Company Contributions, Stock Fund Units, Interest Index Fund II Units
or Mutual Fund Units to a Participant's Company Account in accordance with the
terms of the Company Match, Retention, Recruitment and Special Awards Programs
set forth respectively as Appendices A through D to this Plan. One, more than
one, or all of such Programs may not be in effect for all Plan Years.

     4.3  Deferrals made by a Participant in accordance with Section 3.1 shall
be credited to a Participant's Employee Stock Fund Subaccount, Employee
Insurance Fund Subaccount or Employee Interest Index Fund II Subaccount, as
determined by the Committee within ten business days after the Deferral is made.
Deferrals deemed invested in Mutual Fund Options shall be credited based upon
the closing net asset value on the crediting date.

     4.4  With respect to Deferrals elected prior to 1999, the balance credited
to each Participant's Account shall be allocated to the investment option(s)
applicable under the Plan on December 31, 1998, consisting of Stock Fund Units,
and the limited option described in Appendix D.

     4.5  Mutual Fund Units shall be valued daily to allocate any income, gain,
loss or expense applicable to such units. Interest Index Fund I and Interest
Index Fund II shall be valued quarterly to allocate any income, gain, loss or
expense applicable to such units. Stock Fund Units shall be valued at such times
as may be determined by the Committee but not less

                                       10
<PAGE>

frequently than annually. In the event the Stock is not traded on a national
exchange or the NASDAQ National Market, the value of Stock Fund Units shall be
determined by the Committee. For any relevant Account valuation under the Plan,
including for purposes of distribution, unless the Committee determines that an
earlier or later date shall be utilized, the balance of a Participant's Account
or subaccount thereof shall be determined by the Committee or its delegate as of
the last business day of the month immediately preceding the event requiring
such valuation.

5.   DEEMED INVESTMENT OPTIONS
     -------------------------

     5.1  Each Participant may direct the Committee on the investment mix for
the balance credited to his or her Employee or Company Insurance Fund Subaccount
(if any) among the Mutual Fund Options designated from time to time by the
Committee under the Plan in accordance with procedures established by the
Committee. For the period form June 1, 2001 until such time as there has been
allocated to Interest Index Fund II a total of $20 million (exclusive of
allocations pursuant to Appendix A (the 2000 Company Match)), a Participant may
direct the Committee to reduce his or her Company or Employee Insurance Fund
Subaccount balances and allocate such reduction to his or her Company or
Employee Interest Index Fund II Subaccount. Any portion of a Participant's
Company or Employee Account allocated to Stock Fund Units or Interest Index Fund
II Units may not be subsequently allocated to another deemed investment option
except as specifically provided herein. Effective July 1, 2000, no more than two
changes in investment elections may be made in any month. Each such change will
be effective prospectively on the crediting date specified in Section 4.3.
Changes in investment elections shall be delivered in such form and fashion as
the Committee shall require.

     5.2  Appendix D (Interest Index Fund I) sets forth rules applicable to a
limited investment option available for pre-April 1, 2000 Deferrals.

6.   VESTING OF ACCOUNTS
     -------------------

     6.1  Amounts credited to an Employee Stock Fund Subaccount, Employee
Insurance Fund Subaccount or Employee Interest Index Fund II Subaccount shall be
vested and non-forfeitable (except to the extent of any net investment losses)
at all times.

     6.2  Amounts (if any) credited to a Company Stock Fund Subaccount, Company
Insurance Fund Subaccount or Company Interest Index Fund II Subaccount, shall
vest as determined by the Committee from time to time consistent with Sections
7.5 and 7.6 and Appendices A through D to this Plan.

     6.3  Nothing in this Section 6 shall be interpreted to provide a
Participant with other than his applicable Employer's unsecured and unfunded
promise to pay deferred compensation in accordance with Section 7.

                                       11
<PAGE>

7.   DISTRIBUTION OF ACCOUNTS
     ------------------------

     7.1  In General. Amounts credited to a Participant's Employee Account and
          ----------
Company Account shall be distributed in accordance with elections made under
Section 3.4, subject, however, to the terms and conditions of this Section 7 and
Appendices A through D to this Plan.

     7.2  Special Limitations on Forms of Distribution. If the aggregate vested
          --------------------------------------------
value of all of a Participant's subaccounts that are eligible for distribution
at the same time under Section 7.1 does not exceed $25,000 at the time
distribution is to commence, then, notwithstanding anything in an election to
the contrary, the distribution shall be in the form of a lump sum. For purposes
of subsection 3.4(d), if the Committee determines that a Participant has
experienced Total and Permanent Disability, the Participant shall be deemed to
have had a Termination of Employment as of the first date of such Total and
Permanent Disability, as determined by the Committee. For purposes of subsection
3.4(c), if a Participant has a Termination of Employment prior to the applicable
In Service Payment Quarter or while receiving in-service distributions,
distribution of all Accounts shall be made or commence within thirty days of the
close of the calendar quarter of Termination of Employment, and shall be in the
form elected (or deemed elected) with respect to a termination distribution.

     7.3  Rules for Determining Distribution Amounts. The Committee or its
          ------------------------------------------
delegate shall have all the discretion described in Section 8 with respect to
the determination of the amount of distributions, including establishing
reasonable administrative periods between the valuation of an Account for
purposes of distribution and the effective delivery of good funds or shares of
Stock to a Participant. In general, the amount of a distribution shall be
determined by first determining as to Stock, the number of shares, and as to
Mutual Fund Units, Interest Index Fund I Units and Interest Index Fund II Units,
the value, in the applicable Account in accordance with Section 4.5.

     7.4  Form of Distributions. Any distributable subaccount of a Company Stock
          ---------------------
Fund Subaccount or Employee Stock Fund Subaccount as determined under Section
7.3 shall be distributed in whole shares of Stock equal to the number of vested
Stock Fund Units credited to such subaccount, rounded to the lowest number of
whole shares. All other distributions shall be in cash.

     7.5  Death. A Participant's Company Account shall not become vested and
          -----
non-forfeitable as a result of the Participant's death, if not otherwise vested
in accordance with Appendices A through D, as applicable. If a Participant dies
before all of the vested and non-forfeitable amounts credited to his or her
Account have been distributed, the Participant's Beneficiary shall receive such
amounts in the Participant's Account in accordance with such Participant's
election then in effect, and the Plan; provided, however, that the Committee
may, in its sole discretion, distribute the vested and non-forfeitable balance
credited to the Participant's Account to the Participant's Beneficiary in such
other manner as the Committee shall determine.

     7.6  Disability. A Participant's Company Account shall not become vested
          ----------
and non-forfeitable as a result of the Participant's Total and Permanent
Disability or other form of disability, if not otherwise vested in accordance
with Appendices A through D, as applicable. If

                                       12
<PAGE>

a Participant suffers Total and Permanent Disability before all of the vested
and non-forfeitable amounts credited to his or her Account have been
distributed, the Participant shall receive such amounts in his or her Account in
accordance with such Participant's election then in effect, and the Plan;
provided, however, that the Committee may, in its sole discretion, distribute
the vested and non-forfeitable balance credited to the Participant's Account to
the Participant in such other manner as the Committee shall determine.

     7.7  Unscheduled Withdrawals.
          -----------------------

          (a)  Hardship and Unscheduled Distributions with 10% Forfeiture. A
               ----------------------------------------------------------
withdrawal of amounts from an Account may occur, in accordance with such notice
and approval procedures as the Committee, in its discretion, may establish,
under either of the two circumstances described below:

               i)   Solely with respect to the Employee Insurance Fund
                    Subaccount and the Employee Interest Index Fund II
                    Subaccount of a Participant, in the event of the
                    Participant's hardship, as determined by the Committee in
                    its discretion, consisting of serious accidental injury or
                    illness of the Participant or dependent of the Participant,
                    material casualty loss of the Participant's property, or
                    other material hardship circumstances arising from events
                    not within the Participant's control; or

               ii)  When the requested distribution is more than the lesser of
                    (A) $25,000, or (B) 50% of each of the Participant's
                    Employee Insurance Fund Subaccount, Stock Fund Subaccount
                    and Interest Index Fund II Subaccount balances, and 10% of
                    such requested distribution (7.5% with respect to
                    distributions from the Employee Interest Index Fund II sub
                    account) is forfeited and therefore not distributed, and in
                    the case of a Participant who is an Eligible Employee, the
                    Participant is barred from continuing a Deferral for the
                    Plan Year in which such distribution is made and the
                    subsequent Plan Year. Any such withdrawal from the Employee
                    Stock Fund Subaccount shall be payable in shares of Stock.

          (b)  Valuation. The amount of an unscheduled distribution for purposes
               ---------
of Section 7.7(a)(ii) shall be based upon the Account valuation under Section
4.5 as of a date determined by the Committee which is not later than 15/th/
business day following the Committee's receipt of the withdrawal request. In the
case of Employee Stock Fund Subaccounts, the 50% rule of Section 7.7(a)(ii) must
be met, based upon the number of shares of Stock.

8.   PLAN ADMINISTRATION
     -------------------

     8.1  This Plan shall be adopted by each Employer and shall be administered
by the Committee.

                                       13
<PAGE>

     8.2  This Plan may be amended in any way or may be terminated, in whole or
in part, at any time, in the discretion of the Board or Directors of CB Richard
Ellis Services, Inc., or its delegate. Upon termination of the Plan, the
Committee or the Board of Directors may, in its sole discretion, elect to
distribute all Accounts immediately or in accordance with each Participant's
deferral election(s) and the provisions of the Plan as they existed at the time
of the Plan's termination.

     8.3  The Committee shall have the sole authority, in its discretion, to
adopt, amend and rescind such rules and regulations as are consistent with the
Plan as it deems advisable for the administration of the Plan, to construe and
interpret the Plan, the rules and regulations, and deferral election forms, and
to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and interpretations
of the Committee shall be binding on all persons. The Committee may delegate its
responsibilities as it sees fit.

     8.4  Any election or other administrative document under the Plan required
to be in writing may, as determined by the Committee, be created, transmitted
and maintained in electronic form.

     8.5  The Committee shall select the insurance contracts or other vehicles
which are the deemed reference regarding the value of each Employee Insurance
Fund Subaccount. It shall furthermore determine the Mutual Fund Options, if any,
available within such contracts or vehicles for selection by Participants. The
Company shall deposit any such contracts in the Rabbi Trust, and may deposit in
the Rabbi Trust any additional assets acquired for purposes of offsetting the
Employer obligation under the Plan.

9.   NO FUNDING OBLIGATION; RABBI TRUST
     ----------------------------------

     No Employer is under any obligation to secure any amount credited to a
Participant's Account by any specific assets of any Employer or any other assets
in which any Employer has an interest. Neither the Participant nor his or her
estate, assigns or successors shall have any rights against any Employer with
respect to any portion of the Account except as a general unsecured creditor. No
Participant has an interest in his or her Account except to the extent the
Participant actually receives a distribution of cash or Stock.

     The obligation to make payments to any Participant hereunder shall be that
of the Employer that employed such Participant during the period or periods that
such Participant deferred receipt of Compensation.

     On or before December 31, 1999, the Committee shall establish a Rabbi Trust
to hold title to assets which the Committee designates under Section 8.5 which
an Employer acquires as an offset to its unsecured obligation under the Plan. It
is the intent of this Plan that no provision of any Rabbi Trust shall be
interpreted as granting any interest in the property of the Rabbi Trust which
would result in a Participant being deemed to be in receipt of taxable income
under the Plan prior to distribution, and any such provision shall be null and
void from its inception.

                                       14
<PAGE>

10.  NONALIENATION OF BENEFITS
     -------------------------

     No benefit under this Plan may be sold, assigned, transferred, conveyed,
hypothecated, encumbered, anticipated, or otherwise disposed of, and any attempt
to do so shall be void. No such benefit, prior to receipt thereof by a
Participant, shall be in any manner subject to the debts, contracts,
liabilities, engagements, or torts of such Participant.

11.  NO LIMITATION OF EMPLOYER RIGHTS
     --------------------------------

     Nothing in this Plan shall be construed to limit in any way the right of
any Employer to terminate an Eligible Employee's employment at any time for no
reason, or any reason, and without regard to whether such termination is in good
faith; nor shall it be evidence of any agreement or understanding, express or
implied, that any Employer (a) will employ an Eligible Employee in any
particular position, (b) will ensure participation in any incentive programs, or
(c) will grant any awards under such programs.

12.  APPLICABLE LAW
     --------------

     This Plan shall be construed and its provisions enforced and administered
in accordance with ERISA (to the extent applicable) and, to the extent not
preempted, the laws of the State of Delaware.

                                       15
<PAGE>

     IN WITNESS WHEREOF, CB Richard Ellis Services, Inc. has caused this
Deferred Compensation Plan (as amended and restated) to be duly executed by the
undersigned as of the 1st day of June, 2001.

                                             CB RICHARD ELLIS SERVICES, INC.


                                             By: _____________________________
                                                   Raymond P. Wirta
                                                   Chief Executive Officer

                                       16
<PAGE>

                                   EXHIBIT A
                                   ---------

                        Participating Employers in the
                        CB Richard Ellis Services, Inc.
                 Deferred Compensation Plan as of June 1, 2001
                 ---------------------------------------------


                        CB Richard Ellis Services, Inc.
                          L.J. Melody & Company, Inc.
                     L.J. Melody & Company of Texas, L.P.
                        CBRE/LJM Mortgage Company, LLC
                       CB Richard Ellis Investors, L.P.
                            CB Richard Ellis, Inc.

<PAGE>

                                  APPENDIX A

                           THE COMPANY MATCH PROGRAM
                             (1999 and 2000 Only)



     A.   Eligibility. Eligible Employees who, during the 1999 or 2000 Plan
          -----------
Year, are credited in the aggregate with $1,000,000 or more of gross commissions
earned on behalf of one or more entities forming a part of the Employer (or such
other threshold as the Committee may specify generally, by classes, or as to
individuals) shall be eligible to have credited to their respective Company
Stock Fund Subaccount or Company Interest Index Fund II Subaccount, as
determined by the Committee, a matching Company Contribution with respect to
such Plan Year, as described in this Appendix A ("Company Match Contribution").
The Committee shall in its sole and absolute discretion determine whether an
Eligible Employee has achieved $1,000,000 in gross commissions, or other
threshold, during such Plan Year. Notwithstanding the preceding two sentences,
no executive officer of CBRES shall be eligible to receive a Company Match
Contribution, and no director of CBRES (other than a director whose non-director
compensation from CBRES is composed entirely of commission, bonus or other
incentive Compensation) shall be eligible to receive a Company Match
Contribution under this Appendix A.

     B.   Amount and Form of Company Match Contribution. The amount of the
          ---------------------------------------------
Company Match Contribution under this Appendix A for both 1999 and 2000 for an
Eligible Employee shall be the lesser of (1) $100,000, (2) 10% of 50% of the
Eligible Employee's gross commissions (adjusted to reflect team or other splits)
payable with respect to the applicable Plan Year or (3) 100% of the Eligible
Employee's Deferrals for such Plan Year. The Company Match Contribution shall be
payable only with respect to the 1999 and 2000 Plan Years. The Company Match
Contribution for 1999 will be made in the form of Stock Fund Units equal in
value at the time of crediting to the amount of the Company Match Contribution
and will be credited to the Account of the affected Eligible Employee as
determined by the Committee within 150 days after the close of the Plan Year.
The Company Match Contribution for 2000 will be in the form of credits to the
Participant's Company Interest Index Fund II Subaccount and will be credited
within 180 days after the close of the 2000 Plan Year. The Committee in its sole
and absolute discretion shall determine an Eligible Employee's gross commissions
for a Plan Year.

     C.   Condition to Crediting of Company Match Contribution. The Company
          ----------------------------------------------------
Match Contribution will only be credited in the event the affected Eligible
Employee (i) allocates to Stock Fund Units or Interest Index Fund II Units (as
determined by the Committee) by such deadline as the Committee determines, an
amount from his or her Deferrals for the applicable Plan Year equal to one-half
of the amount of his or her Company Match Contribution for the Plan Year and
(ii) executes an Agreement Not to Compete in the form stipulated by the
Committee from time to time. Such Agreement Not to Compete may require the
Eligible Employee to refrain from competition with an Employer or use
confidential information of an Employer for a period of up to five years.

                                      A-1
<PAGE>

     D.   Vesting. Except as provided in the following sentence, any Stock Fund
          -------
Units or Interest Index Fund II Units within a Participant's Company subaccounts
attributable to a Company Match Contribution shall be forfeited upon the
Participant's Termination of Employment. Any such Stock Fund Units and/or
Interest Index Fund II Units shall only become vested and non-forfeitable, and
therefore distributable to the applicable Eligible Employee or his or her
Beneficiaries, to the extent of 20% at each successive December 31 following the
crediting of such Company Match Contribution, upon which the Eligible Employee
remains employed (including as an exclusive independent contractor) with an
entity forming a part of the Employer. Notwithstanding the preceding sentence
any Stock Fund Units and/or Interest Index Fund II Units shall be forfeited in
their entirety, whether or not then vested under the preceding sentence, in the
event the Participant experiences a Termination of Employment for material
cause, as determined by the Committee, or, except as otherwise expressly
provided in the Agreement Not to Compete, breaches or challenges (whether before
or after Termination of Employment) the validity of the Agreement Not to
Compete.

     E.   Distributions. Notwithstanding any other provisions of the Plan,
          -------------
distributions under this Appendix A shall be made only upon the Participant's
Termination of Employment.

     F.   Administration. The provisions of this Appendix A shall be
          --------------
administered by the Committee in its discretion in accordance with Section 8 of
the Plan.

                                      B-2
<PAGE>

                                  APPENDIX B

                               RETENTION PROGRAM
                                  (2000 ONLY)

     A.   Eligibility. The 125 sales professionals with the highest average
          -----------
commissions over a consecutive three (3) year period ending December 31, 1999
and who are selected by the Committee (and subject to adjustment by the
Committee) are eligible to become Participants in the Retention Program. The
final selection from among such sales professionals will be made by the
Committee in its sole and absolute discretion.

     B.   Amount of Retention Award. The Retention Award will be in the form of
          -------------------------
a credit of Stock Fund Units and will vary with the position of the Participant
in the top 125 as follows:

          ------------------- -------------------
                 Sales            Stock Fund
             Professional            Units
                Ranking             Awarded
          ------------------- -------------------
                 1-15               5,700
          ------------------- -------------------
                16-75               4,500
          ------------------- -------------------
                76-125              3,000
          ------------------- -------------------

     The Retention Award will be credited to the Participant's Company Stock
Fund Subaccount.

     C.   Condition to Crediting of Retention Award. The Retention Awards of
          -----------------------------------------
5,700 or 4,500 Stock Fund Units will be credited to the Participant's Company
Stock Fund Subaccount only if he or she executes an Agreement Not to Compete in
the form and at the time specified by the Committee.

     D.   Vesting. If the Participant has a Termination of Employment at any
          -------
time within four (4) years after he or she has been granted a Retention Award,
the Participant will forfeit all Stock Fund Units attributable to such Retention
Award regardless of the reason for the termination. Otherwise, such Stock Fund
Units will vest on the fourth (4/th/) anniversary of the grant. Whether or not
the Participant is otherwise vested under this Appendix B he or she will forfeit
all Stock Fund Units credited with respect to the Retention Award in the event
he or she breaches or challenges (whether before or after Termination of
Employment) the validity of his or her Agreement Not to Compete (subject in each
case to the specific terms of such agreement).

     E.   Distributions. Notwithstanding any other provisions of the Plan,
          -------------
distributions with respect to vested Stock Fund Units credited under this
Appendix B shall be made only upon Termination of Employment and subject to the
provisions of the Participant's Agreement Not to Compete.

                                      B-1
<PAGE>

     F.   Administration. The provisions of this Appendix B shall be
          --------------
administered by the Committee in its discretion in accordance with Section 8 of
the Plan.

                                      B-2
<PAGE>

                                   APPENDIX C

                               RECRUITMENT PROGRAM

     A.   Eligibility. Participation in the Recruitment Program is confined to
          -----------
sales professionals who are offered and accept a job with an entity forming a
part of the Employer and who can demonstrate to CBRES' satisfaction during the
negotiation of the terms and conditions of their employment that their income
from services during the year of hire or the previous calendar year exceeded
$100,000 and is likely to do so under their employment with the Employer on an
annualized basis.

     B.   Amount of Recruitment Award. A recruitment award (the "Recruitment
          ---------------------------
Award") will be in the form of a credit of Stock Fund Units, Interest Fund Index
II Units or Mutual Fund Units to the Participant's Company Account. The award
may not be less than 500 Stock Fund Units or $5,000, nor more than 10,000 Stock
Fund Units or $100,000, but otherwise shall be determined by the Committee in
its sole discretion.

     C.   Conditions to Crediting of Recruitment Award. The Recruitment Award
          --------------------------------------------
will be credited to the Participant's Company Stock Fund Subaccount, Company
Insurance Fund Subaccount or Interest Index Fund II Subaccount only if the
Participant executes an Agreement Not to Compete in a form specified by the
Committee.

     D.   Vesting. If the Participant has a Termination of Employment at any
          -------
time within four (4) years after a grant of a Recruitment Award the Participant
will forfeit all of the Stock Fund Units, Mutual Fund Units or Interest Index
Fund II Units credited with respect to such Recruitment Award regardless of the
reason for the Termination of Employment. Otherwise, the Recruitment Award will
vest on the fourth (4/th/) anniversary of the grant. Notwithstanding any vesting
pursuant to this paragraph D, the Participant will forfeit all Stock Fund Units,
Mutual Fund Units or Interest Index Fund II Units if his or her employment is
terminated with material cause as determined by the Committee, or he or she
breaches or challenges (whether before or after Termination of Employment) the
validity of the Agreement Not to Compete.

     E.   Distributions. Notwithstanding any other provisions of the Plan,
          -------------
distributions to a Participant with respect to vested Stock Fund Units, Mutual
Fund Units and/or Interest Index Fund II Units credited under this Appendix C
shall be made only following the Participant's Termination of Employment and
subject to the provisions of the Participant's Agreement Not to Compete.

     F.   Administration. The provisions of this Appendix C shall be
          --------------
administered by the Committee in its discretion in accordance with Section 8 of
the Plan.

                                      C-1
<PAGE>

                                   APPENDIX D

                           INTEREST INDEX FUND I UNITS

     A.   Interest Index Fund I Units are units of deemed investment by
Deferrals whereunder Deferrals are credited with interest at the then current
rate payable by CBRES on its senior debt, determined by the Committee in its
discretion.

     B.   Interest Index Fund I Units are a permitted deemed investment under
the Plan with respect to Deferrals credited to a Participant's Employee Account
prior to April 1, 2000. Such deemed Interest Index Fund I Units are credited to
a Participant's Employee Interest Index Fund I Subaccount under the Plan. The
Employee Interest Index Fund I Subaccount is 100% vested and non-forfeitable,
and distributable in accordance with Section 7.1 of the Plan. On and after April
1, 2000 no amounts from Deferrals or any other source may be deemed to be
invested in Interest Index Fund I Units. However, Interest Index Fund I Units
may be deemed to be converted to Stock Fund Units as an investment change under
Section 5.1 of the Plan, at the deemed value of Stock Fund Units at the
effective date of the change (but may not thereafter be converted back to
Interest Index Fund I Units). A Deferral election in effect April 1, 2000
contemplating deemed investment in Interest Index Fund I Units may be revoked by
the Participant or reallocated to other deemed investment options.

                                      D-1
<PAGE>

                                   APPENDIX E

            CONSEQUENCE AND OPTIONS TO PLAN PARTICIPANTS UPON MERGER

     If the Company merges with Blum CB Corp., a wholly-owned subsidiary of CBRE
Holding, Inc., in a "going private" transaction (the "Merger"), the Plan shall
be amended and restated as follows:

     A.   The first sentence of Section 2.31 of the Plan will be amended to read
as follows: "Stock" means the Class A Common Stock, par value $0.01 per share,
of CBRE Holding, Inc."

     B.   No new Deferrals to the Stock Fund will be permitted.

     C.   All Stock Fund Units arising from the 1999 Company Match, the
Retention Program or the Recruitment Program (to the extent not vested prior to
the completion of the effective date of the Merger) will automatically be
converted from a right to receive a distribution of a share of common stock of
CBRE to the right to receive a share of Class A common stock of CBRE Holding,
Inc.

     D.   Except as set forth in item E below, each Stock Fund Unit arising from
employee Deferrals or the 1999 Company Match (to the extent vested prior to the
effective date of the Merger) may at the election of the Participant and in
accordance with the procedures established by the Committee: (a) be converted
into the right to receive at the time of distribution one share of CBRE Holding
Class A Common Stock or (b) be converted at a value of $16 per Stock Fund Unit
into an interest in Interest Index Fund II Units or Mutual Fund Options as
elected by the Participant or if no such election is made in a money market
Mutual Fund Option selected by the Committee.

     E.   Item D above shall apply only to U.S. employees and U.S. independent
contractors resident in California, Illinois, New York or Washington.. Former
employees and independent contractors, non-U.S. employees and independent
contractors and independent contractors not resident in California, Illinois,
New York or Washington automatically will have their vested pre-Merger Stock
Fund Units converted at a $16 per unit value into an interest in Interest Index
Fund II or Mutual Fund Options as elected by the Participant or if no such
election is made in a money market Mutual Fund Option selected by the Committee.
Allocations pursuant to items D and E above to Interest Index Fund II Units are
limited by the $20 million maximum allocation to such fund.

     F.   In accordance with procedures set by the Committee, designated
managers (certain managers selected by the Board) may elect to convert a portion
of their interest in Mutual Fund Units into Stock Fund Units at a $16 per unit
value until such conversion results in a total of not more than 162,500 new
Stock Fund Units.

                                      E-1