Document:

Exhibit 10.14

 

AMENDED AND RESTATED
COMPENSATION AGREEMENT

 

 

THIS AMENDED AND
RESTATED COMPENSATION AGREEMENT (“Agreement”) is entered into this 5th day of March, 2003,
but effective as of January 1, 2003, by and between Samuel Zell (“Chairman”)
and Equity Residential (“Company”), a Maryland real estate investment trust.

 

RECITALS

 

WHEREAS, the Chairman has served as Chairman of the
Company’s Board of Trustees since 1993; and

 

WHEREAS, in recognition of the extraordinary
services previously rendered by Chairman and to give Chairman incentive to
continue rendering such services, the Company and the Chairman entered into a
Executive Compensation Agreement dated October 18, 2001 (the “2001 Agreement”);

 

WHEREAS, the Company and the Chairman desire to
amend the 2001 Agreement to provide for the relative mix and pricing of share
options and restricted shares for the February 2003 long-term compensation
grant and all subsequent grants.

 

WHEREAS, the Company and the Chairman desire to
amend and restate in its entirety the 2001 Agreement effective as of January 1,
2003, with the 2001 Agreement remaining in effect for the period prior to
January 1, 2003;

 

NOW, THEREFORE, in consideration of the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the payment and adequacy of which is hereby acknowledged, the parties agree to
amend and restate the 2001 Agreement in its entirety as follows:

 

I.              Executive’s Compensation

 

Chairman’s compensation for each full calendar year that this Agreement
is in effect shall be as follows:

 

A.    In each of the months of February 2003 and January 2004, for services
rendered during the calendar year preceding the date of grant, the Company
shall grant Chairman share options in the Company (the “Share Options Grant”)
and restricted common shares of Company stock (the “Restricted Shares Grant”)
having a combined total dollar value of $3,250,000. The February 2003 grant of
$3,250,000 shall be allocated 25% to the Share Options Grant and 75% to the
Restricted Shares Grant. The January 2004 grant of $3,250,000 shall be
allocated between the Share Options Grant and the Restricted Shares Grant in
the same ratio as approved by the Company’s Board of Trustees for the annual
long-term incentive grants to the Company’s executive officers; provided,
however, if the Chief Executive Officer and the other executive officers do not
all receive the same relative allocation of Share Options Grant and Restricted
Shares Grant, Chairman’s relative allocation shall be the same as that of the
Chief Executive Officer.

 

1

 

B.    The number of options in each Share Options Grant will be determined
using the same value per option and same exercise price that the Company’s
Compensation Committee uses in pricing the annual share option grants to the
Company’s employees. For example, if the Company’s Compensation Committee
values one share option at $1.90 and if the total value allocated to share
options is 25%, or  $812,500, Chairman
would receive a grant of 427,632 Share Options ($812,500/$1.90).  Each Share Options Grant will vest over a
three year period, with one-third of each grant vesting on each of the first,
second, and third anniversary dates of said grant, subject to Chairman’s continuous
service as the Company’s Chairman of the Board of Trustees on each vesting
date, unless such grant is otherwise vested pursuant to the terms and
conditions of the Company’s Share Option and Share Award Plan, as amended, or
any successor plan thereto (the “Plan”).

 

C.    The number of restricted shares in each Restricted Shares Grant will be
determined using the closing price of the Company’s common shares on the date
that the Company issues its annual share option and restricted share grants to
the Company’s employees.  For example,
assuming the price of one Company common share on the date of grant is $23.55,
if the total value allocated to the Restricted Shares Grant is 75%, or
$2,437,500, Chairman would receive 103,503 Restricted Shares ($2,437,500/$23.55).  Each Restricted Shares Grant will vest in
full on the third anniversary date of said grant, subject to Chairman’s
continuous service as Company’s Chairman of the Board of Trustees on said
vesting date, unless such grant is otherwise vested pursuant to the terms and
conditions of the Plan.

 

D.                   (i)            Each
Share Options Grant and Restricted Shares Grant shall be subject to the terms
and conditions of the Plan, including but not limited to, the vesting
conditions of the Plan.  Any capitalized
words used herein and not defined shall have the meaning ascribed to them in
the Plan.

 

(ii)            Notwithstanding
paragraph 6(f) of the Plan, the termination of Chairman’s trusteeship shall be
deemed the equivalent of an employee’s termination of employment under the Plan
for purposes of the lapse of restrictions on Restricted Shares and the
accelerated vesting of Share Options.

 

(iii)           Pursuant
to the Company’s Compensation Committee’s authority under the Plan to establish
guidelines for determining whether a grantee’s service has terminated for “good
cause,” the Company agrees, with the Chairman’s approval thereof, that for
purposes of this Agreement, “good cause” under the Plan shall have the same
definition as the word “Cause” in the Retirement Benefits Agreement dated
October 18, 2001 entered into by the Company and the Chairman.

 

(iv)          The
Company agrees that any decisions under the Plan relating to this Agreement
shall be made by the Committee and not by the Plan Administrator or the
Company’s General Counsel.

 

2

 

(v)           The
Company represents to Chairman that there shall always be sufficient Shares
under the Plan available for issuance to cover the potential awards to
Chairman, and that prior to January 1, 2004, it shall enact a successor stock
option and share award plan to ensure the granting of the awards to Chairman
required after May 21, 2003 (the last date awards can be made under the 1993
Plan).  Any such successor stock option
and share award plan shall be, insofar as it affects Chairman, be substantially
equivalent to the existing Plan and not inconsistent with any provision of this
Agreement.  The Company further
represents to Chairman that in the unlikely event the Plan is terminated, it
shall be required to provide Chairman with substantially equivalent substitute
awards.

 

E.     The parties agree that Chairman is not and shall not be deemed an
employee of Company and that, Company will not make any withholdings or
deductions from any taxable income realized in connection with the Share
Options or Restricted Shares and will issue, if required by law, to Chairman
each year a standard Internal Revenue Service Form 1099.

 

II.            Term and
Compensation Upon Termination

 

A.    This Agreement shall become effective on January 1, 2003 and shall
continue in effect until the earlier to occur of (i) the death of Chairman;
(ii) Chairman’s resignation or removal as Chairman of the Board of Trustees of
Company; or (iii) the issuance of the Share Options Grant and Restricted Shares
Grant in January 2004.

 

B.    Should this Agreement terminate for any reason prior to the end of any
calendar year during the term hereof, other than for “Cause” (as such word is
defined in the Retirement Benefits Agreement of even date herewith entered into
by Company and Chairman), Chairman shall receive as his sole compensation for
the calendar year in which this Agreement terminates a prorated Share Options
Grant and a prorated Restricted Shares Grant, equal to the full dollar amount
of each such Grant for said calendar year, multiplied by a fraction, the
numerator of which is the number of days in said calendar year that this
Agreement was in effect before it terminated, and the denominator of which is
365; provided, however, that any such prorated Share Options Grant or
Restricted Shares Grant shall be subject to the vesting terms and conditions
described above in this Agreement and in the Plan (i.e., said Grants would be
fully vested upon their grant unless Chairman resigned without good reason
prior to age 62 or was removed for Cause).

 

III.           Chairman’s Duties

 

Chairman shall perform such duties as are consistent with the office of
Chairman of the Board of Trustees and consistent with the services historically
performed by Chairman.

 

3

 

IV.           Expenses

 

Chairman shall be personally responsible for his office rent and office
related expenses and all business related expenses which would otherwise be
customarily reimbursed as travel and entertainment expenses incurred in
connection with Company business and/or his responsibilities as Chairman of the
Board of Trustees and will not be reimbursed by Company for any such expenses.

 

V.            Arbitration

 

Any controversy or claim arising out of, or relating to this Agreement,
or the breach thereof, shall be settled by arbitration in Chicago, Illinois in
accordance with the rules of the American Arbitration Association, and judgment
upon any award so rendered may be entered in any court having jurisdiction
thereof.

 

VI.           Notices

 

Any notice or other communication required or permitted to be
transmitted under this Agreement shall be in writing, and personally delivered
or mailed, return receipt requested, postage prepaid, addressed to the parties
hereto at their addresses following their signatures below, or at such other
addresses as may be hereafter designated by a party by notice delivered in
accordance herewith.  Any notice
delivered personally shall be effective on the date of delivery and any notice
mailed, as aforesaid, shall be effective on the second day following posting.

 

VII.         Waiver of
Breach

 

The waiver by one party of a breach of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of any
subsequent breach by the one party.

 

VIII.        Assignment

 

The rights and obligations of Company and Chairman under this Agreement
shall inure to the benefit of, and shall be binding upon, Company and its
successors and assigns and Chairman and his heirs and personal representatives.

 

IX.           Entire Agreement

 

This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof. 
It may not be changed orally but only by agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

 

X.            Governing Law and Severability

 

This Agreement shall be construed and enforced, and all questions
concerning compliance by any person with its terms shall be determined under
the laws of the State of Illinois.  All
provisions of this Agreement are severable and this Agreement shall be
interpreted and enforced as if all completely invalid or unenforceable
provisions were not contained herein, and partially valid and enforceable
provisions shall be enforced to the extent valid and enforceable.

 

4

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

 

 

	
   

  	
  EQUITY RESIDENTIAL, a Maryland real estate

  investment trust

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bruce W. Duncan

  
	
   

  	
   

  	
  Bruce W. Duncan, President & CEO

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Two North Riverside Plaza

  
	
   

  	
  Suite 400

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHAIRMAN:

  
	
   

  	
   

  
	
   

  	
  /s/ Samuel Zell

  
	
   

  	
  SAMUEL ZELL, Chairman

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Two North Riverside Plaza

  
	
   

  	
  Suite 600

  
	
   

  	
  Chicago, Illinois 60606

  

 

5Exhibit 10.19

 

FIRST
AMENDMENT TO LETTER AGREEMENT

 

 

                THIS FIRST AMENDMENT TO LETTER AGREEMENT (“Amendment”) is
entered into this 17th day of February, 2003, by and between Bruce
W. Duncan (“Executive”) and Equity Residential (“Company”), a Maryland real estate
investment trust.

 

RECITALS

 

                WHEREAS, the Company and the Executive entered into a letter
agreement dated March 14, 2002 (“2002 Agreement”) describing Executive’s 2002
compensation.

 

                WHEREAS, the Company and the Executive desire to amend the
2002 Agreement.

 

                NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
payment and adequacy of which is hereby acknowledged, the parties agree to
amend the 2002 Agreement as follows:

 

1.             Paragraph A of the 2002 Agreement
is amended by deleting it in its entirety and replacing it with the following
paragraph A:

 

A.           My annual
salary shall be $550,000, and my cash bonus, payable in February 2003, shall be
$550,000.  Effective as of the date of
this letter, I will also receive the following long-term compensation awards as
a signing bonus:  41,361 options award,
8,272 restricted shares award and 4,595 performance share units award.  I will also receive in February of 2003 at
the same time as the other senior executives receive their 2002 long term
incentive grants, the following long-term compensation awards for services
rendered in 2002:  168,820 options award
(priced at $23.55); 35,644 restricted shares award and 6,985 performance share
units award (collectively the “February 2003 Grants”).  These awards are issued subject to the terms
of the Company’s Share Option and Share Award Plan and the Company’s 2002 Share
Incentive Plan.

 

 

IN WITNESS WHEREOF, the parties have executed this First Amendment to
Letter Agreement as of the day and year first above written

 

 

	
   

  	
  EQUITY
  RESIDENTIAL, a Maryland real estate investment trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bruce C. Strohm

  	
   

  
	
   

  	
   

  	
  Bruce
  C. Strohm

  
	
   

  	
   

  	
  Executive Vice
  President and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Bruce W. Duncan

  	
   

  
	
   

  	
  Bruce
  W. Duncan

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