Document:

Exhibit
10.1

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

This Amended and Restated Employment
Agreement (“Agreement”) is entered into as of this 28th day of March, 2005 (the
“Effective Date”), by and between Equity Residential, a Maryland real estate
investment trust (“Company”), and Bruce W. Duncan (the “Executive”).

 

RECITALS

 

The Executive is currently employed by the
Company as Chief Executive Officer and President of the Company on the terms
and conditions set forth in that certain Employment Agreement dated as of January 20,
2003 (the “Original Agreement”).

 

The Executive and the Company desire to make
certain changes in the terms of the Original Agreement and have agreed to amend
and restate the Original Agreement to implement such changes.

 

In consideration of the mutual covenants
contained herein, and intending to be legally bound, Company and the Executive
agree as follows:

 

1.                                       Employment and Duties.

 

(a)                                  Employment.  Subject to all of the terms and conditions of
this Agreement, the Company agrees to continue the employment of the Executive
as its Chief Executive Officer for the Employment Period, and the Executive
agrees to continue such employment.

 

(b)                                 Duties.  As Chief Executive Officer of the Company,
Executive will continue to have overall charge and responsibility for the
business and affairs of the Company, including transition of Executive’s Chief
Executive Officer duties to Executive’s successor Chief Executive Officer, all
as he is reasonably directed by the Board of Trustees of the Company (the “Board”).  Executive shall perform such duties at the
Company’s headquarters located in Chicago, Illinois.  During the term of Executive’s employment as
Chief Executive Officer, the Company shall re-nominate Executive for
re-election to the Board; provided, Executive shall promptly submit his
resignation from the Board upon a termination of his employment for any reason.

 

(c)                                  Scope.  While the Executive is employed by the
Company hereunder, Executive will devote substantially all of his business
time, attention, skills and efforts to the business and affairs of the Company
and the performance of his duties under this Agreement.  The Executive acknowledges that his duties
and responsibilities under this Agreement will require his full-time business
efforts and agrees that he will not engage in any other business activity or
have any business pursuits or interests which materially interfere or conflict
with the performance of the Executive’s duties under this Agreement.  Notwithstanding the foregoing, the parties
agree that during the Employment Period,

 

 

Executive may serve on civic or charitable boards or committees and up
to two (2) corporate boards (in addition to the Board of the Company) so long
as such activities do not materially interfere with the performance of the
Executive’s duties under this Agreement.

 

2.                                       Definitions.

 

(a)                                  Accrued
Compensation.  “Accrued
Compensation” shall mean an amount which shall include all amounts earned or
accrued through the “Termination Date” (as defined below) but not paid as of
the Termination Date including: (i) Base Salary, (ii) reimbursement for
reasonable and necessary expenses incurred by the Executive on behalf of the
Company during the period ending on the Termination Date, and (iii) vacation
and sick leave pay (to the extent provided by Company policy or applicable
law).

 

(b)                                 Base
Amount.  “Base Amount”
shall mean the Executive’s annual Base Salary at the rate in effect on the
Termination Date.

 

(c)                                  Bonus
Amount.  “Bonus Amount”
shall mean the annual average of the cash bonus paid to the Executive
(including in all cases amounts that would have been paid if they had not been
deferred) under the Company’s annual incentive bonus plan for the two years
immediately preceding the year in which the Executive’s employment terminates.

 

(d)                                 Cause.  A termination of employment is for “Cause” if
the Executive has been convicted of a felony involving fraud or dishonesty or
the termination is evidenced by a resolution adopted in good faith by at least
two-thirds of the Board that the Executive: (i) intentionally and continually
failed substantially to perform his reasonably assigned duties with the Company
(other than a failure resulting from the Executive’s incapacity due to physical
or mental illness or from the Executive’s assignment of duties that would
constitute “Good Reason” as hereinafter defined) which failure continued for a
period of at least thirty (30) days after a written notice of demand for
substantial performance has been delivered to the Executive specifying the
manner in which the Executive has failed substantially to perform or (ii)
intentionally engaged in conduct which is demonstrably and materially injurious
to the Company; provided, however, that no termination of the Executive’s
employment shall be for Cause as set forth in clause (ii) above until (x) there
shall have been delivered to the Executive a copy of a written notice setting
forth that the Executive was guilty of the conduct set forth in clause (ii) and
specifying the particulars thereof in detail and (y) the Executive shall have
been provided an opportunity to be heard in person by the Board (with the
assistance of the Executive’s counsel if the Executive so desires).  Neither an act nor a failure to act, on the
Executive’s part shall be considered “intentional” unless the Executive has
acted or failed to act with a lack of good faith and with a lack of reasonable
belief that the Executive’s action or failure to act was in the best interest
of the Company.  Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform by the
Executive after a Notice of Termination is given by the Executive shall
constitute Cause for purposes of this Agreement.

 

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(e)                                  Company.  The “Company” shall include the Company’s “Successors
and Assigns”.

 

(f)                                    Disability.  “Disability” shall mean a physical or mental
infirmity that entitles the Executive to benefits under the Company sponsored
long-term disability plan in which he participates.

 

(g)                                 Good
Reason.  “Good Reason”
shall mean the occurrence of any of the events or conditions described in
subsections (i) through (vii) hereof:

 

(i)                                     the replacement of
Executive as Chief Executive Officer effective prior to January 2, 2006 or
any change in reporting responsibilities such that (A) Executive no longer
reports exclusively to the Board or (B) any subordinate employee of Executive
currently reporting to Executive reports to any person other than to Executive
or to an employee reporting to Executive;

 

(ii)                                  a reduction in the
Executive’s Base Salary or any failure to pay the Executive any compensation or
benefits to which he is entitled within thirty (30) days of written notice
thereof;

 

(iii)                               the Company’s requiring
the Executive to be based at any place outside a 30-mile radius from the
Executive’s principal location of business in Chicago, Illinois immediately
prior to relocation, except for travel reasonably required in the performance
of the Executive’s responsibilities;

 

(iv)                              the insolvency or the
filing (by any party, including the Company) of a petition for bankruptcy of
the Company, which petition is not dismissed within sixty (60) days;

 

(v)                                 any material breach by
the Company of any provision of this Agreement which is not cured within thirty
(30) days of written notice to the Company of such breach;

 

(vi)                              any purported termination
of the Executive’s employment for Cause by the Company which does not comply
with the terms of this Agreement; or

 

(vii)                           the failure of the Company
to obtain an agreement, reasonably satisfactory to Executive, from any
Successors and Assigns to assume and agree to perform this Agreement as
contemplated in Section 8(h) hereof.

 

(h)                                 Notice of
Termination.  “Notice of
Termination” shall mean a written notice of termination from the Company of the
Executive’s employment which indicates a specific termination provision in this
Agreement relied upon and which sets forth in

 

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reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated.

 

(i)                                     Pro Rata Bonus.  “Pro Rata Bonus” shall mean an amount equal
to 100% of the Executive’s Target Bonus that the Executive would have been
eligible to receive for the Company’s fiscal year in which the Executive’s
employment terminates, multiplied by a fraction, the numerator of which is the
number of days in such fiscal year through the Termination Date and the
denominator of which is 365.

 

(j)                                     Successors and Assigns.  “Successors and Assigns” shall mean a
corporation or other entity acquiring all or substantially all the voting
securities, assets or business of the Company whether by operation of law or
otherwise, and any affiliate of such Successors and Assigns.

 

(k)                                  Termination
Date.  “Termination Date”
shall mean (a) in the case of the Executive’s death, his date of death, (b) in
the case of Good Reason, the last day of his employment and (c) in all other
cases, the date specified in the Notice of Termination or if no Notice of
Termination is sent, the last day of his employment; provided, however, that if
the Executive’s employment is terminated by the Company due to Disability, the
date specified in the Notice of Termination shall be the 30th day after receipt
of the Notice of Termination by the Executive, provided that the Executive
shall not have returned to the full-time performance of his duties within 30
days after such receipt.

 

3.                                       Term.  Subject to earlier termination in accordance
with Section 5 below, Executive’s employment as Chief Executive Officer of
the Company pursuant to the terms of this Agreement will terminate as of January 2,
2006. The continuous period of employment from January 1, 2003 through January 2,
2006 being the “Employment Period” as used in this Agreement.

 

4.                                       Compensation.

 

(a)                                  Base
Salary.  During the
Employment Period, the Company will pay the Executive a base salary (the “Base
Salary”) at a rate of $750,000 per year in accordance with the Company’s
standard payroll practices.  Base Salary
will not be decreased during the term of Executive’s employment.  Notwithstanding any other provision of this
Agreement to the contrary, for the period from January 1, 2006 through January 2,
2006, provided that Executive’s employment has not been terminated for Cause
prior to January 2, 2006 or Executive has not voluntarily terminated his
employment prior to January 2, 2006 for other than Good Reason, Executive’s
total compensation for such period shall be (i) $30,000 in cash and (ii) a
fully vested award of 17,239 shares under the Company’s 2002 Share Incentive
Plan (the “Plan”) made on January 2, 2006 and (iii) a grant under the
Plan on January 2, 2006 of a fully vested option expiring on the tenth (10th)
anniversary of the date of grant to purchase 42,614 shares at Fair Market Value
on January 2, 2006, as defined in the Plan, which total compensation shall
be in lieu of any additional or other Base Amount, Bonus Amount and long term
incentive plan award for such period.

 

4

 

(b)                                 Annual
Cash Bonus.  In addition
to other compensation to be paid under this Section 4, the Executive will
be eligible to receive a target annual cash bonus for each year during the
Employment Period, to be administered by the Board under the Company’s annual
incentive bonus plan.  The Executive’s
target annual cash bonus for 2005 is $1,080,000 (the “Target Bonus”).  Provided Executive’s employment has not been
terminated for Cause prior to January 2, 2006 or Executive has not
voluntarily terminated his employment prior to January 2, 2006 for other
than Good Reason, Executive’s annual cash bonus for 2005 shall be 100% of the
Target Bonus, except as provided herein in the event of Executive’s death or
Disability prior to January 2, 2006, payable on January 2, 2006.

 

(c)                                  Long Term
Incentive Plans.  In
addition to other compensation to be paid under this Section 4, provided
Executive’s employment has not been terminated for Cause prior to January 2,
2006 or Executive has not voluntarily terminated his employment prior to January 2,
2006 for other than Good Reason, the Executive will be eligible to receive an
annual long term incentive award of stock options, restricted stock and/or
performance units under the Company’s long term incentive plans for 2005 on January 2,
2006, except as provided herein in the event of Executive’s death or
Disability.  The Executive’s target
long-term incentive award for 2005 is $4,500,000.  The number of stock options, restricted
shares and performance share units, and the allocation among stock options,
restricted shares and performance share units, shall be determined using the
same criteria determined by the Committee in its other senior executive
compensation grants for such year; provided, Executive’s long term incentive
award for 2005 shall be subject to the provisions of Section 4(h) hereof.

 

(d)                                 Other
Benefits.  In addition to
other compensation to be paid under this Section 4, the Executive will be
entitled to five (5) weeks of paid vacation each year, a Company paid non-golf
club membership, reimbursement for first class travel, if he uses this option,
on business related trips.  Executive
shall also be eligible to participate in all other benefit and perquisite
plans, practices and programs maintained by Company as are made available to
its senior executives, as those plans, practices and programs may be amended,
supplemented, replaced or terminated from time to time.  Any provision of any plan, program, practice
or policy of the Company (other than Executive’s Deferred Compensation
Agreement), or any award or grant of incentive compensation to Executive, now
existing or as hereafter may be adopted, amended or modified, to the contrary
notwithstanding, upon the Executive’s continuous employment with the Company
through January 2, 2006, he will be deemed to have attained a sufficient
age and years of service for retiree eligibility under all Company incentive
and benefit plans, programs and practices (including, without limitation, (x) continued
exercisability of stock options at the most senior tier upon a termination of
employment, but not less than the lesser of five years or the remaining term of
the grant and (y) upon Executive’s retirement on or after such date, all
outstanding performance shares shall be payable as provided in Section 4(h)(iii)
hereof, specifically excluding (i) subject to Section 4(h)(v), Executive’s
Deferred Compensation Agreement, and (ii) the Executive Retirement Benefits
Agreement, dated March 14, 2002, between the Executive and the Company
(which agreement shall remain in force hereafter in accordance with its terms).

 

5

 

(e)                                  Reimbursement
of Business Expenses.  The
Company agrees to reimburse the Executive for all reasonable out-of-pocket
business expenses incurred by the Executive on behalf of the Company in
accordance with the standard policies and procedures of the Company relating to
reimbursement of business expenses.

 

(f)                                    Taxes.  All compensation payable to the Executive
pursuant to this Agreement is stated in gross amount and will be subject to all
applicable withholding and normal payroll taxes.

 

(g)                                 No
Trustee Fees.  The
Executive will not receive any additional compensation for serving as a Trustee
of the Company.

 

(h)                                 Special
Provisions. 
Notwithstanding any provision of this Agreement (except for the last
sentence of Section 4(b) and for Sections 6(b) and 6(c)) or any other
agreement between Executive and the Company to the contrary and provided that
Executive remains employed with the Company through the close of business on January 2,
2006, the following additional special provisions shall apply upon the
termination of Executive’s employment on January 2, 2006:

 

(i)                                     the provisions of Section 5(e)
hereof shall not apply and Executive shall automatically without notice, cease
to be a director, officer or employee of the Company at the close of business
on January 2, 2006;

 

(ii)                                  100% of all stock
options granted to Executive, including, without limitation, the award set
forth in Section 4(a) and the award for 2005 set forth in Section 4(c)
hereof, shall fully vest or shall be fully vested when awarded, as the case may
be, and the Executive shall have the remaining term of each option to exercise
such option;

 

(iii)                               all outstanding
performance share unit awards shall be handled as follows:  the January 2003
performance share grant for 2002 shall be valued within 75 days of the end of
the three (3) year performance period (December 31, 2005) and Executive
shall receive an amount of fully vested non-restricted shares equal to the
resulting valuation, which may range from 0% to 225% of the target level based
on actual performance for such period.  Notwithstanding anything to
the contrary contained in any Performance Based Restricted Share Grant
Agreement entered into between Company and Executive, within sixty (60) days
after December 31, 2006 the number of shares to be issued under all
outstanding performance share unit awards issued to Executive for 2003, 2004 and
2005 shall all be valued and the Valuation Date (as defined in the plan) for
such awards shall be December 31, 2006. Executive shall receive an amount
of fully vested non-restricted shares equal to the number of performance share
units to be issued

 

6

 

pursuant to the valuation, with a minimum number of shares equal to
the 100% target level on each grant (i.e., 15,470 shares for the January 2004
grant for 2003, 17,632 shares for the January 2005 grant for 2004,
and the 100% target level for the January 2006 grant for 2005), which
(A) for the January 2004 grant for 2003, shall be issued at the 100%
target level on January 2, 2006 and the remaining such shares, if any, to
be issued, based on actual performance, within 60 days after December 31,
2006, (B) for the January 2005 grant for 2004, shall be issued at the 100%
target level on January 2, 2006 and the remaining such shares, if any, to
be issued, based on actual performance, within 60 days after December 31,
2006, and (C) for the 2006 grant for 2005 shall be issued at the 100% target
level on the date provided in Section 4(c) hereof and the remaining such
shares, if any, to be issued, based on actual performance, within 60 days after
December 31, 2006.

 

(iv)                              all restricted shares
granted to Executive, including, without limitation, the award set forth in Section 4(a)
and the award for 2005 set forth in Section 4(c) hereof, will be 100%
vested and be subject to no further restrictions;

 

(v)                                 Executive’s deferred
compensation under the Executive’s Deferred Compensation Agreement dated January 20,
2003 (the “Deferred Compensation Agreement”) will not be reduced as a result of
Executive’s termination of employment on January 2, 2006 as opposed to December 31,
2006 (that is, beginning at age 62, Executive will receive $375,000 per annum
adjusted by the CPI change from March 15, 2002 to December 31, 2005
pursuant to Executive’s Deferred Compensation Agreement); and

 

(vi)                              Executive’s (and his
covered dependents’) medical and dental insurance benefits with the Company
will terminate on December 31, 2006 and for all periods afterwards
Executive shall be entitled to COBRA coverage for such periods to the extent
such coverage is available under the Company’s then current health insurance
policy; provided, however, in the event insurance may not be continued under
the Company’s insurance, medical and dental policies, the Company shall pay for
Cobra coverage from January 2, 2006 until December 31, 2006 to the
extent such coverage is available under the Company’s then current health
insurance policy.

 

(i)                                     Special Provisions in the Event of Death or
Disability of Executive. 
In the event of Executive’s death or Disability prior to the termination
of Executive’s employment pursuant to this Agreement, Executive or his personal
representative, as appropriate, shall receive (i) his Base Salary accrued to
his Termination Date, (ii) the remuneration set forth in the last sentence of Section 4(a),
(iii) his Pro Rata Bonus, and

 

7

 

(iv) any incentive compensation (other than the “Pro Rata Bonus”) for
2005 under Section 4(c) shall be prorated based upon the total number of
days employed prior to Executive’s Termination Date in the same manner the Pro
Rata Bonus is determined.

 

5.                                       Termination.

 

(a)                                  Mutual
Agreement.  The Executive’s
employment hereunder may be terminated at any time by mutual agreement on terms
to be negotiated at the time of such termination.

 

(b)                                 Death or
Disability.  The Executive’s
employment will terminate automatically upon the Executive’s death.  If the Company determines in good faith that
the Disability of the Executive has occurred, subject to the respective
continuing obligations of the Company and the Executive under this Agreement,
the Company has the right to terminate the Executive’s employment under this
Agreement by notice pursuant to Section 5(e) below.

 

(c)                                  By the
Company.  Subject to the
respective continuing obligations of the Company and the Executive under this
Agreement, the Company has the right to terminate the Executive’s employment
under this Agreement for Cause, or without Cause, by notice pursuant to Section 5(e)
below.

 

(d)                                 By the
Executive.  Subject to the
respective continuing obligations of the Company and the Executive under this
Agreement, the Executive has the right to terminate his employment under this
Agreement for Good Reason, or without Good Reason, by notice pursuant to Section 5(e)
below.

 

(e)                                  Notice of
Termination.  Any
termination of the Executive’s employment by the Company or by the Executive
(other than termination upon the Executive’s death, which does not require
notice) must be communicated by written Notice of Termination to the other
party hereto given in accordance with the notice provisions of this
Agreement.  For purposes of this
Agreement, a “Notice of Termination” means a notice which (i) indicates the
specific termination provision of this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provisions so indicated and
(iii) if the Termination Date is other than the date of receipt of such notice,
specifies the Termination Date (which date will not be less than thirty (30)
days after the giving of such notice). 
The failure by Company or the Executive to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of the basis
for termination will not waive any right of such party hereunder or preclude
such party from asserting such fact or circumstance in enforcing his or its
rights hereunder.

 

6.                                       Compensation Upon Termination.  The Executive shall be entitled to the
following compensation and benefits upon his termination of employment with the
Company:

 

(a)                                  If the Executive’s
employment with the Company shall be terminated: (i) by the Company for
Cause or (ii) by the Executive other than for Good Reason, death

 

8

 

or Disability, then the Company shall pay to the Executive only any
Accrued Compensation.

 

(b)                                 If the Executive’s
employment with the Company shall be terminated (i) by the Company for any
reason other than as specified in Section 6(a)(i) or 6(c), or (ii) by the
Executive for Good Reason, then the Executive shall be entitled to all
remuneration set forth in this Agreement when and as payable pursuant to this
Agreement as if Executive continued in the employment of the Company through January 2,
2006.

 

(c)                                  In the event of the
death or Disability of Executive prior to January 2, 2006, Executive shall
be entitled to the remuneration set forth in Section 4(i) hereof and all
performance share award units, restricted shares and stock options shall fully
vest in accordance with their terms, i.e., in the event of any outstanding
performance share awards, such performance shares shall immediately vest and be
immediately payable at the greater of: (i) the 100% target level or (ii) the
number of shares earned as calculated through the date of termination.

 

7.                                       Non-Competition.

 

(a)                                  Non-Compete;
Non-Solicitation.  During
the Employment Period and for a period of two and one-half (2.5) years after January 2,
2006, (i) the Executive will not be engaged, directly or indirectly, as a
consultant to, or an officer, employee, agent, advisor, principal, partner,
director or substantial stockholder of any company or entity engaged in the
multi-family apartment rental and development business and (ii) the Executive
will not, directly or indirectly, for the benefit of any company or entity
solicit the employment or services of, hire, or assist in the hiring of any
person eligible for the Company’s incentive bonus plan.  For the purpose of this Section 7(a)
Executive shall not be a “substantial stockholder” of any publicly traded
company or entity in which he beneficially owns not more than 5% of the
outstanding common stock (on a fully diluted basis).

 

(b)                                 Acknowledgment.  The Executive has carefully read and
considered the provisions of this Section 7 and agrees that the
restrictions set forth in this Section 7 (including the period of
restriction, scope of activity to be restrained and the geographical scope) are
fair and reasonable and are reasonably required for the protection of the
interests of the Company, its officers, directors, employees, creditors and
stockholders.  The Executive understands
that the restrictions contained in this section may limit his ability to
engage in a business similar to that of the Company’s, but acknowledges that he
will receive sufficiently high compensation and other benefits hereunder to
justify such restrictions.

 

(c)                                  No
Adequate Remedy.  The
Executive understands that if he fails to fulfill his obligations under this Section 7,
the Company will suffer irreparable injury, and the damages to the Company
would be very difficult to determine. 
Therefore, in addition to any other rights or remedies, the Executive
agrees that the Company will be entitled to a temporary, preliminary, and
permanent injunction enjoining or restraining the Executive from any such
violation or threatened violation, without the necessity of proving the
inadequacy of monetary damages or the posting of any bond or security.  The Executive hereby consents to specific
enforcement of Section 7 of this Agreement by the Company through an
injunction or restraining order issued by any state or federal court of

 

9

 

competent jurisdiction.  The
Executive further acknowledges and agrees that due to the uniqueness of his
services and confidential nature of the confidential information he possesses
or will possess during the Employment Period, the covenants set forth herein
are reasonable and necessary for the protection of the business and the
goodwill of the Company.

 

8.                                       Miscellaneous.

 

(a)                                  No
Guaranteed Employment. 
The Executive and the Company acknowledge that the employment of the
Executive by the Company is “at will” and may be terminated by either the
Executive or the Company at any time, subject, however to the rights of the
Executive provided herein or in any other agreement entered into by the
Executive and the Company in the event of any such termination.

 

(b)                                 Full
Satisfaction; Waiver and Release.  As a condition to receiving the payments and
benefits hereunder, the Executive shall execute a document in accordance with
the form attached hereto as Exhibit A, releasing and waiving any and all
claims, causes of actions and the like against the Company and its successors,
shareholders, officers, trustees, agents and employees, regarding all matters
relating to the Executive’s service as an employee of the Company or any
affiliates and the termination of such relationship.  Such claims include, without limitation, any
claims arising under Age Discrimination in Employment Act of 1967, as amended
(the “ADEA”); Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991, as amended; the Equal Pay Act of 1962; the American
Disabilities Act of 1990; the Family Medical Leave Act, as amended; the
Employee Retirement Income Security Act of 1974, as amended; or any other
federal, state or local statute or ordinance, but exclude any claims that arise
out of an asserted breach of the terms of this Agreement, any benefits payable
to Executive under the Company’s benefit plans, practices and programs in which
he participates, and all rights of indemnification and coverage under directors
and officers liability insurance.

 

(c)                                  Waiver.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provisions of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.  No
agreement or representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made by either party which are not
expressly set forth in this Agreement.

 

(d)                                 Governing
Law.  This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Illinois without giving effect to the conflict of laws principles
thereof.  Any action brought by any party
to this Agreement shall be brought and maintained in a court of competent
jurisdiction in Cook County in the State of Illinois.

 

10

 

(e)                                  Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

 

(f)                                    Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof, including but not limited to
the Change in Control Agreement between Executive and the Company dated March 14,
2002 but specifically excluding the Deferred Compensation Agreement between
Executive and the Company dated January 20, 2003, which shall remain in
full force and effect, subject to the provisions of Section 4(h)(v) hereof
and also excluding the Indemnification Agreement dated on or about March 2002,
which shall remain in full force and effect.

 

(g)                                 Notices.  All notices and other communications under
this Agreement must be in writing and must either be delivered personally or
sent by first class mail, certified or registered with return receipt
requested, postage prepaid; if to the Company, to the attention of the General
Counsel at 2 North Riverside Plaza, Suite 400, Chicago, IL 60606; and if to the
Executive, at his address most recently on file with the Company, or such other
address as either party may specify by like notice.

 

(h)                                 Successors;
Binding Agreement.  This
Agreement shall be binding upon and shall inure to the benefit of the Company,
its Successors and Assigns, and the Company shall require any Successors and
Assigns (other than by operation of law in connection with a merger or
consolidation, which requirement shall be deemed satisfied upon such merger or
consolidation) to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.  Neither this Agreement nor any right or
interest hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representative, except by will or by the laws of descent
and distribution or as otherwise provided herein.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal personal representative.

 

(i)                                     No Duty to Mitigate.  The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, and no such payment shall be offset or reduced
by the amount of any compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section 4(h)(vi).

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  EQUITY
  RESIDENTIAL, a Maryland real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Samuel Zell

  
	
   

  	
  Name:

  	
  Samuel Zell

  
	
   

  	
  Title:

  	
  Chairman of
  the Board

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Bruce
  W. Duncan

  
	
   

  	
  Name:

  	
  Bruce W.
  Duncan

  
				

 

 

EXHIBIT A

 

GENERAL RELEASE OF ALL CLAIMS

 

THIS RELEASE is made as of this       
day of                   ,
      , by and between Equity Residential, a
Maryland real estate investment trust (the “Company”) and                   
(“Executive”).

 

WHEREAS, Executive and the Company entered
into that certain Amended and Restated Employment Agreement, dated                          ,
2005 (“Agreement”);

 

WHEREAS, Executive’s employment with the Company
as Chief Executive Officer has terminated; and

 

WHEREAS, in connection with the termination
of Executive’s employment, under the Agreement, Executive is entitled to
certain payments and other benefits.

 

NOW, THEREFORE, in consideration of the
severance payments and other benefits due Executive under the Agreement (“Severance
Payments”):

 

1.                                       Executive hereby
for himself, and his heirs, agents, executors, successors, assigns and
administrators (collectively, the “Related Parties”), intending to be legally
bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its
affiliates, subsidiaries, parents, joint ventures, and its and their officers,
directors, shareholders, employees, predecessors, and partners, and its and
their respective successors and assigns, heirs, executors, and administrators,
including without limitation, Equity Residential Properties Management Limited
Partnership, ERP Operating Limited Partnership, Equity Residential Properties
Management Limited Partnership II, Equity Residential Properties Management
Corp., Equity Residential Properties Management Corp. II, Equity Apartment
Management L.L.C. and all “Lexford” entities (collectively, “Releasees”) from
all causes of action, suits, debts, claims and demands whatsoever in law or in
equity, which Executive ever had, now has, or hereafter may have, or which the
Related Parties may have, by reason of any matter, cause or thing whatsoever,
from the beginning of his initial dealings with the Company to the date of this
Release, and particularly, but without limitation of the foregoing general
terms, any claims arising from or relating in any way to his employment
relationship with Company, the terms and conditions of that employment
relationship, and the termination of that employment relationship, including,
but not limited to, any claims arising under the Age Discrimination in
Employment Act (“ADEA”), as amended, 29 U.S.C. § 621 et seq., the Older
Worker’s Benefit Protection Act, 29 U.S.C. § 626(f)(1), Title VII of The
Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil
Rights Act of 1871, the Civil Rights Act of 1991, the Americans with
Disabilities Act, 42 U.S.C. § 12101-12213, the Rehabilitation Act, the
Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601 et seq.,
the Fair Labor Standards Act, the Illinois Human Rights Act, and any other
claims under any federal, state or local common law, statutory, or regulatory
provision, now or hereafter recognized, and any claims for attorneys’ fees and
costs, but not including (i) such claims to payments, benefits and other rights
provided Executive under the Agreement, or under any other agreement the terms
of which provide for payment or benefits to Executive after the date hereof,
(ii) such claims to payments, benefits and other rights

 

A-1

 

provided Executive under any employee benefit plan of the Company in
which Executive is a participant and (iii) any claims or rights to
indemnification under any agreement with the Company or as is otherwise
provided and any claims or rights under directors and officers liability
insurance.  This Release is effective
without regard to the legal nature of the claims raised and without regard to
whether any such claims are based upon tort, equity, implied or express
contract or discrimination of any sort. 
Except as specifically provided herein, it is expressly understood and
agreed that this Release shall operate as a clear and unequivocal waiver by
Executive of any claim for accrued or unpaid wages, benefits or any other type
of payment other than as provided under clauses (i), (ii) and (iii) above.  It is the intention of the parties to make
this Release as broad and as general as the law permits as to the claims released
hereunder.

 

2.                                       Executive
further agrees and recognizes that he has permanently and irrevocably severed
his employment relationship with the Company, that he shall not seek employment
with the Company or any affiliated entity at any time in the future, and that
the Company has no obligation to employ him in the future.

 

3.                                       The parties
agree and acknowledge that this Release, and the settlement and termination of
any asserted or unasserted claims against the Releasees pursuant to this
Release, are not and shall not be construed to be an admission of any violation
of any federal, state or local statute or regulation, or of any duty owed by
any of the Releasees to Executive.

 

4.                                       Executive
certifies and acknowledges as follows:

 

a.                                       That
he has read the terms of this Release, and that he understands its terms and
effects, including the fact that he has agreed to RELEASE AND FOREVER DISCHARGE
all Releasees from any legal action or other liability of any type related in
any way to the matters released pursuant to this Release other than as provided
in the Agreement and in this Release;

 

b.                                      That
he has signed this Release voluntarily and knowingly in exchange for the
consideration described herein, which he acknowledges is adequate and
satisfactory to him and which he acknowledges is in addition to any other
benefits to which he is otherwise entitled;

 

c.                                       That
he has been and is hereby advised in writing to consult with an attorney prior
to signing this Release;

 

d.                                      That
he has been informed that he has the right to consider this Release and Waiver
of Claims for a period of 21 days from receipt, and he has signed on the date
indicated below after concluding that this Release and Waiver of Claims is
satisfactory to him; and

 

e.                                       That
neither the Company, nor any of its directors, employees, or attorneys, has
made any representations to him concerning the terms or effects of this Release
and Waiver of Claims other than those contained herein.

 

f.                                         That
he has not filed, and will not hereafter file, any claim against the Company
relating to his employment and/or cessation of employment with the Company,

 

A-2

 

or otherwise
involving facts that occurred on or prior to the date that Executive has signed
this Release and Waiver of Claims, other than a claim that the Company has
failed to pay Executive the Severance Payments or benefits due under any
employee benefit plan of the Company in which Executive is a participant.

 

6.                                       This Release and
Waiver of Claims and the Agreement constitute the complete understanding
between Executive and the Company concerning the subject matter hereof.  No other promises or agreements will be
binding unless signed by Executive and the Company.

 

7.                                       In the event
that any provision or portion of this Release and Waiver of Claims shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Release and Waiver of Claims shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.

 

8.                                       The respective
rights and obligations of the parties hereunder shall survive termination of
this Release and Waiver of Claims to the extent necessary for the intended
preservation of such rights and obligations.

 

9.                                       This Release and
Waiver of Claims shall be governed by and construed and interpreted in
accordance with the laws of the State of Illinois without reference to the
principles of conflict of law.

 

10.                                 Executive also
understands that he has the right to revoke this Release and Waiver of Claims
within 7 days after execution, and that this Release and Waiver of Claims will
not become effective or enforceable until the revocation period has expired, by
giving written notice to the following:

 

Equity
Residential

Two North Riverside Plaza, Suite 400

Chicago, Illinois

Attention:  Bruce C. Strohm, General
Counsel

 

11.                                 Employee agrees and
acknowledges that should he violate any term of this Release, the amount of
damages that Equity would suffer as a result of such violation would be
difficult to ascertain.  Employee further
agrees and acknowledges that in the event of a breach by Employee of any term
of this Release, Equity’s duty to provide Employee with any payments pursuant
to the Agreement shall immediately cease, and, in addition to injunctive relief
or any other damages, Equity may, to the extent permitted by law, recover all
consideration paid pursuant to the Agreement, as well as all costs and expenses
incurred by Equity in enforcing this Release or defending against a suit brought
in violation of this Release, including reasonable attorneys’ fees.

 

A-3

 

IN WITNESS WHEREOF, and intending to be
legally bound hereby, the parties execute the foregoing Release and Waiver of
Claims:

 

	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name
  in this Space]

  	
   

  

 

A-4Exhibit 10.4

 

BioSphere Medical Inc.

 

NON-STATUTORY STOCK OPTION AGREEMENT

 

1.             Grant
of Option.  BioSphere Medical Inc., a
Delaware corporation (the “Company”), hereby grants to the person (the “Optionee”)
listed on the above Grant Summary, an option, pursuant to the Company’s 1994
Stock Option Plan (the “Plan”), to purchase up to the number of shares of
common stock, $0.01 par value per share (the “Common Stock”), of the Company
set forth on the Grant Summary as Total Shares at a price per share set forth on
the Grant Summary as the Option Price. 
The shares of Common Stock subject to this option are purchasable as set
forth in and subject to the terms and conditions of this option and the Plan.  Except where the context otherwise requires,
the term “Company” shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the “Code”).

 

2.             Non-Statutory
Stock Option.  This option is not
intended to qualify as an incentive stock option within the meaning of Section
422 of the Code.

 

3.             Exercise
of Option and Provisions for Termination.

 

(a)           Vesting Schedule.  Except as otherwise provided in this
Agreement, this option may be exercised prior to the tenth anniversary of the
Grant Date set forth on the Grant Summary (hereinafter the “Expiration Date”)
to purchase, from and after each date set forth under the column entitled “Full
Vest Date” on the attached Grant Summary Table, the number of shares of Common
Stock set forth opposite such date.  The
right off exercise shall be cumulative so that if any installment is not
exercised to the maximum extent permissible on the applicable Full Vest Date
during any exercise period, it shall be exercisable, in whole or in part, with
respect to all shares not so purchased at any time prior to the Expiration Date
or the earlier termination of this option. 
This option may not be exercised at any time on or after the Expiration
Date, except as otherwise provided in Section 3(e) below.

 

(b)           Exercise Procedure.  Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee’s delivery of written
notice of exercise to the Treasurer of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4.  Such exercise shall be effective upon receipt
by the Treasurer of the Company of such written notice together with the
required payment.  The Optionee may
purchase less than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional share or for fewer
than ten whole shares.

 

 

(c)           Continuous Relationship with the Company
Required.  Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Optionee, at the time he or she exercises this option, is, and has been at all
times since the Grant Date of this option, an employee, officer or director of,
or consultant or advisor to, the Company (an “Eligible Optionee”).  For purposes of this Agreement, employment
with the Company shall not include employment with Sepracor Inc.

 

(d)           Termination of Relationship with
the Company.  If the Optionee ceases
to be an Eligible Optionee for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Expiration Date), provided
that this option shall be exercisable only to the extent that the Optionee was
entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if the
Optionee, prior to the Expiration Date, materially violates the non-competition
or confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Optionee and the
Company, the right to exercise this option shall terminate immediately upon
written notice to the Optionee from the Company describing such violation.

 

(e)           Exercise Period Upon Death or
Disability.  If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Expiration Date while he or she is an Eligible Optionee, or if the Optionee
dies within three months after the Optionee ceases to be an Eligible Optionee
(other than as the result of a termination of such relationship by the Company
for “cause” as specified in paragraph (f) below), this option shall be
exercisable, within the period of one year following the date of death or
disability of the Optionee (whether or not such exercise occurs before the
Expiration Date), by the Optionee or by the person to whom this option is
transferred by will or the laws of descent and distribution, provided
that this option shall be exercisable only to the extent that this option was
exercisable by the Optionee on the date of his or her death or disability.  Except as otherwise indicated by the context,
the term “Optionee”, as used in this option, shall be deemed to include the
estate of the Optionee or any person who acquires the right to exercise this
option by bequest or inheritance or otherwise by reason of the death of the
Optionee.

 

(f)            Discharge for Cause.  If the Optionee, prior to the Expiration
Date, is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon such cessation of
employment.  “Cause” shall mean willful
misconduct by the Optionee or willful failure to perform his or her
responsibilities in the best interests of the Company (including, without
limitation, breach by the Optionee of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement
between the Optionee and the Company), as determined by the Company, which
determination shall be conclusive.  The
Optionee shall be considered to have been discharged “for cause” if the Company
determines, within 30 days after the Optionee’s resignation, that discharge for
cause was warranted.

 

4.             Payment
of Purchase Price.

 

(a)           Method of Payment.  Payment of the purchase price for shares
purchased upon exercise of this option shall be made (i) by delivery to the
Company of cash or a check to

 

2

 

the order of the Company in an amount equal to the purchase price of
such shares, (ii) subject to the consent of the Company, by delivery to the
Company of shares of Common Stock of the Company then owned by the Optionee
having a fair market value equal in amount to the purchase price of such
shares, (iii) by any other means which the Board of Directors determines are
consistent with the purpose of the Plan and with applicable laws and
regulations (including, without limitation, the provisions of Rule 16b-3 under
the Securities Exchange Act of 1934 and Regulation T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.

 

(b)           Valuation of Shares or Other
Non-Cash Consideration Tendered in Payment of Purchase Price.  For the purposes hereof, the fair market
value of any share of the Company’s Common Stock or other non-cash
consideration which may be delivered to the Company in exercise of this option
shall be determined in good faith by the Board of Directors of the Company.

 

(c)           Delivery of Shares Tendered in
Payment of Purchase Price.  If the
Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common
Stock of the Company to be delivered shall be duly executed in blank by the
Optionee or shall be accompanied by a stock power duly executed in blank
suitable for purposes of transferring such shares to the Company.  Fractional shares of Common Stock of the
Company will not be accepted in payment of the purchase price of shares
acquired upon exercise of this option.

 

(d)           Restrictions on Use of Option
Stock.  Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price of shares purchased upon exercise of this option if the
shares to be so tendered were acquired within twelve (12) months before the
date of such tender, through the exercise of an option granted under the Plan
or any other stock option or restricted stock plan of the Company.

 

5.             Delivery
of Shares; Compliance With Securities Laws, etc.

 

(a)           General.  The Company shall, upon payment of the option
price for the number of shares purchased and paid for, make prompt delivery of
such shares to the Optionee, provided that if any law or regulation requires
the Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.

 

(b)           Listing, Qualification, etc.  This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. 
Nothing herein shall

 

3

 

be deemed to require the Company to apply for, effect or obtain such
listing, registration, qualification or disclosure, or to satisfy such other
condition.

 

6.             Nontransferability
of Option.  This option is personal
and no rights granted hereunder may be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) nor shall
any such rights be subject to execution, attachment or similar process, except
that this option may be transferred (i) by will or the laws of descent and
distribution or (ii) pursuant to a qualified domestic relations order as
defined in Section 414(p) of the Code. 
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon this option or such
rights, this option and such rights shall, at the election of the Company,
become null and void.

 

7.             No
Special Employment or Similar Rights. 
Nothing contained in the Plan or this option shall be construed or
deemed by any person under any circumstances to bind the Company to continue
the employment or other relationship of the Optionee with the Company for the
period within which this option may be exercised.

 

8.             Rights
as a Shareholder.  The Optionee shall
have no rights as a shareholder with respect to any shares which may be
purchased by exercise of this option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
unless and until a certificate representing such shares is duly issued and
delivered to the Optionee.  No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.

 

9.             Adjustment
Provisions.

 

(a)           General.  If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, (i) the
outstanding shares of Common Stock are increased or decreased or are exchanged
for a different number or kind of shares or other securities of the Company, or
(ii) additional shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to such shares of
Common Stock or other securities, the Optionee shall, with respect to this
option or any unexercised portion hereof be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 15(a) of the
Plan.

 

(b)           Board Authority to Make
Adjustments.  Any adjustments under
this Section 9 will be made by the Board of Directors, whose determination as
to what adjustments, if any, will be made and the extent thereof, will be
final, binding and conclusive.  No
fractional shares will be issued pursuant to this option on account of any such
adjustments.

 

10.           Mergers,
Consolidation, Distributions, Liquidation, etc.  In the event of a merger or consolidation or
sale of all, or substantially all, of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity, or in the event of a
liquidation of the Company, prior to the Expiration Date or termination of this
option, the Optionee shall, with respect to this

 

4

 

option or any unexercised portion hereof, be entitled to the rights and
benefits, and be subject to the limitations, set forth in Section 16(a) of the
Plan.

 

11.           Withholding
Taxes.  The Company’s obligation to
deliver shares upon the exercise of this option shall be subject to the
Optionee’s satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.

 

12.           Noncompetition/Nonsolicitation.  Optionee agrees that for a period of one (1)
year from the date of termination, the Optionee will not, directly or
indirectly:

 

(i)  as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, investor,
lender, consultant or in any other capacity whatsoever, develop, design,
produce, market, sell or render, or assist any other person in developing,
designing, producing, marketing, selling or rendering) products or services
competitive with those developed, designed, produced, marketed, sold or rendered
by the Company while Optionee was employed by (or, acting as a consultant to)
the Company; or

 

(ii)  solicit, divert, or take
away, or attempt to divert or to take away, the business or patronage of any of
the clients, customer or accounts, or prospective clients, customers or
accounts, of the Company which were contacted, solicited or served by the
Optionee while employed by (or, acting as a consultant to) the Company.

 

13.           Miscellaneous.

 

(a)           Except as provided herein, this
option may not be amended or otherwise modified unless evidenced in writing and
signed by the Company and the Optionee.

 

(b)           All notices under this option shall
be mailed or delivered by hand to the parties at their respective addresses set
forth on the above Notice of Grant or at such other address as may be
designated in writing by either of the parties to one another.

 

(c)           This option shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.

 

5

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