CB RICHARD ELLIS SERVICES INC, DEF 14A, 1999-03-31

CB RICHARD ELLIS SERVICES INC
DEF 14A, 1999-03-31
REAL ESTATE

Previous: K&F INDUSTRIES INC, 10-K405, 1999-03-31

Next: CB RICHARD ELLIS SERVICES INC, 10-K405, 1999-03-31

<PAGE>

================================================================================

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

CB RICHARD ELLIS SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

-------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

-------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

-------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

-------------------------------------------------------------------------

(5) Total fee paid:

-------------------------------------------------------------------------

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

-------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

-------------------------------------------------------------------------

(3) Filing Party:

-------------------------------------------------------------------------

(4) Date Filed:

-------------------------------------------------------------------------

Notes:

<PAGE>

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

You are invited to attend the Annual Meeting of Stockholders of CB RICHARD
ELLIS SERVICES, INC., a Delaware corporation (the "Company"), to be held on
Tuesday, May 18, 1999, at 8:00 a.m., local time, at The Los Angeles Marriott
Downtown Hotel, 333 South Figueroa Street, Los Angeles, California, to
consider and act upon the following matters:

1. To elect thirteen (13) Directors to serve as such until the next Annual
Meeting of Stockholders and until their successors are elected and
qualified;

2. To approve and adopt the Company's 1999 Employee Stock Option Plan;

3. To approve and adopt the Amended and Restated Annual Management Bonus
Plan;

4. To ratify the appointment of Arthur Andersen LLP as independent
accountants for the Company for 1999; and

5. To consider and act upon such other matters as may properly come before
the meeting.

Only stockholders of record at the close of business on March 19, 1999 are
entitled to notice of and to vote at the meeting and any adjournment thereof.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO THE EXERCISE THEREOF BY
WRITTEN NOTICE TO THE COMPANY, AND STOCKHOLDERS WHO ATTEND THE MEETING MAY
WITHDRAW THEIR PROXIES PRIOR TO THE EXERCISE THEREOF AND VOTE THEIR SHARES
PERSONALLY IF THEY SO DESIRE.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ James J. Didion
JAMES J. DIDION
Chairman of the Board

Los Angeles, California
March 31, 1999
<PAGE>

CB RICHARD ELLIS SERVICES, INC.
200 North Sepulveda Boulevard
El Segundo, California 90245-4380

PROXY STATEMENT

This Proxy Statement ("Proxy Statement") is furnished to holders of Common
Stock ("Common Stock") of CB Richard Ellis Services, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation by the
Company's Board of Directors of proxies to be voted at the Annual Meeting of
Stockholders to be held on May 18, 1999 (the "Annual Meeting"), or at any
adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. Stockholders of record
on March 19, 1999, the record date, will be entitled to vote at the Annual
Meeting. At the close of business on the record date, the Company had
21,130,650 shares of Common Stock outstanding and entitled to vote.
Stockholders are entitled to one vote for each share of Common Stock held. The
Annual Meeting will be held at 8:00 a.m., local time, at The Los Angeles
Marriott Downtown Hotel, 333 South Figueroa Street, Los Angeles, California.
The Company's Proxy Statement and form of proxy are being mailed or delivered
to stockholders on approximately March 31, 1999. For purposes of this Proxy
Statement, "CBRE" refers to the Company's wholly owned subsidiary, CB Richard
Ellis, Inc.

Shares represented by proxies in the form enclosed, if the proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned proxy, the
shares (other than shares held within the Company's Capital Accumulation Plan
(the "Cap Plan")) will be voted FOR the election of all nominees for Director,
FOR the approval and adoption of the Company's 1999 Employee Stock Option
Plan, FOR approval and adoption of the Amended and Restated Annual Management
Bonus Plan, and FOR the ratification of the selection of Arthur Andersen LLP
to serve as independent accountants for the Company for 1999. Vanguard
Fiduciary Trust Company is the trustee (the "Trustee") for the Cap Plan and
will vote the shares of Common Stock held within the Cap Plan ("Cap Plan
Shares") as directed on the enclosed proxy card by each plan participant to
whose account shares have been credited. The Trustee will vote any Cap Plan
Shares for which participant directions are not received with respect to
proposals 1, 2, 3 and 4 (election of Directors, approval and adoption of the
1999 Employee Stock Option Plan, approval and adoption of the Amended and
Restated Annual Management Bonus Plan and ratification of appointment of
independent accountants) in the same proportion as the shares of Common Stock
for which the Trustee did receive participant directions. On March 19, 1999,
there were 2,252,444 shares of Common Stock held within the Cap Plan.

The presence in person or by proxy of the holders of a majority of the
Company's outstanding shares constitutes a quorum for the transaction of
business at the Annual Meeting. Directors are elected by a plurality vote. The
other matters submitted for stockholder approval at the Annual Meeting will be
decided by the affirmative vote of the majority of the shares represented in
person or by proxy and entitled to vote on each such matter. Abstentions with
respect to any matter are treated as shares present or represented and
entitled to vote on that matter and thus have the same effect as negative
votes.

Proxies may be revoked at any time before voting by filing a notice of
revocation with the Secretary of the Company, by filing a later dated proxy
with the Secretary of the Company or by voting in person at the Annual
Meeting. Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Annual Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum.

The Board of Directors knows of no matters to come before the Annual Meeting
other than the matters referred to in this Proxy Statement. If, however, any
matters properly come before the Annual Meeting, it is the intention of each
of the persons named in the accompanying proxy to vote such proxies in
accordance with such person's discretionary authority to act in such person's
best judgment.

1
<PAGE>

The expense of soliciting proxies will be borne by the Company. The
principal solicitation of proxies is being made by mail and personal delivery;
however, additional solicitation may be made by telephone, telegram or other
means by Directors, officers, employees or agents of the Company. No
additional compensation will be paid to these individuals for any such
services.

PROPOSAL NO. 1

NOMINATION AND ELECTION OF DIRECTORS

The Board of Directors proposes the election of thirteen Directors of the
Company to serve until the next annual meeting of stockholders and thereafter
until their successors are elected and qualified. If any nominee is unable or
declines to serve as director at the time of the Annual Meeting, an event not
now anticipated, proxies will be voted for any nominee designated by the Board
of Directors to fill the vacancy.

Stanton D. Anderson
Gary J. Beban
Richard C. Blum
James J. Didion
Bradford M. Freeman
Donald M. Koll
Paul C. Leach
David R. Lind
Frederic V. Malek
Ray Elizabeth Uttenhove
W. Brett White
Gary L. Wilson
Raymond E. Wirta

Only persons who are nominated in accordance with the following procedures
shall be eligible for election as Directors. Nominations of persons for
election to the Board at the annual meeting, by or at the direction of the
Board, may be made by any nominating committee or person appointed by the
Board; nominations may also be made by any stockholder of record of the
Company entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth below. Such nominations, other
than those made by or at the direction of the Board, shall be made pursuant to
timely notice in writing to the Secretary of the Company. To be timely, a
stockholder's notice shall be delivered personally or deposited in the United
States mail, or delivered to a common carrier for transmission to the
recipient or actually transmitted by the person giving the notice by
electronic means to the recipient or sent by other means of written
communication, postage or delivery charges prepaid in all such cases, and
received at the principal executive offices of the Company addressed to the
attention of the Secretary of the Company not less than one hundred twenty
(120) days prior to the scheduled date of the meeting (regardless of any
postponements, deferrals or adjournments of that meeting to a later date);
provided, however, that, in the case of an annual meeting and in the event
that less than one hundred (100) days' notice or prior public disclosure of
the date of the scheduled meeting is given or made to stockholders, notice by
the stockholder to be timely must be so received not later than the close of
business on the 7th day following the day on which such notice of the date of
the scheduled meeting was mailed or such public disclosure was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth (a)
as to each person whom the stockholder proposes to nominate for election or
reelection as a Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class, series and number of shares of capital stock of the
Company that are owned beneficially by the person, (iv) a statement as to the
person's citizenship, and (v) any other information relating to the person
that is required to be disclosed in solicitations for proxies for election of
Directors pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder; and (b) as to
the stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class, series and number of shares of capital stock
of the Company that are owned beneficially by the stockholder. The Company may
require any

2
<PAGE>

proposed nominee to furnish such other information as may be reasonably be
required by the Company to determine the eligibility of such proposed nominee
to serve as Director of the Company. No person shall be eligible for election
as a Director of the Company unless nominated in accordance with the
procedures set forth herein.

In connection with any annual meeting, the Chairman of the Board (or such
other person presiding at such meeting in accordance with the Company's by-
laws) shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the foregoing procedure, and if he
should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.

Directors and Nominees for Directors

The following is a description of the positions with the Company presently
held by and the business experience for the past five years for each nominee
for Director of the Company.

Stanton D. Anderson, age 58. Mr. Anderson has been a Director of the Company
since 1989. From 1995 to 1997, he served as counsel to the law firm of
McDermott, Will & Emery and became partner of the firm and head of the
Legislative Practice department in 1998. Prior to 1995, Mr. Anderson was
founding partner in the law firm of Anderson, Hibey & Blair. He is also a
founder of Global USA, Inc., an international consulting company, where he
serves as Chairman. He served as Deputy Director of the Republican Convention
in 1980, 1984 and 1988, as counsel to the Reagan-Bush Campaign in 1980 and as
a Director of the 1980 Presidential Transition. Mr. Anderson serves on the
Board of Directors of International Management & Development Group, Ltd., and
Center for International Private Enterprise. He is a member of the Board of
Advisors of Westmont College. Mr. Anderson holds a B.A. degree from Westmont
College and a J.D. degree from Willamette University School of Law.

Gary J. Beban, age 52. Mr. Beban has been President--Corporate Services
since 1997 and a Director since 1989. Mr. Beban has been Senior Executive
Managing Director--Global Corporate Advisory Group since 1998. He joined the
Company's Los Angeles office in 1970 as an industrial and investment
properties specialist and thereafter served in several management positions in
Chicago. Mr. Beban was President--Brokerage Services from 1989 to 1997. He is
a member of the Industrial Development Research Council and the National
Realty Committee. Mr. Beban serves on the Board of Directors of The First
American Financial Corporation and its wholly owned subsidiary, First American
Title Insurance, Inc. Mr. Beban holds a B.A. degree from the University of
California, Los Angeles.

Richard C. Blum, age 63. Mr. Blum has been a Director of the Company since
1993. He is the Chairman and President of Richard C. Blum & Associates, Inc.,
a merchant banking firm he founded in 1975. Mr. Blum is a member of the Board
of Directors of Northwest Airlines Corporation; Glenborough Realty; URS
Corporation and Playtex Products, Inc. Mr. Blum also serves as Vice Chairman
of URS Corporation. Mr. Blum holds a B.A. degree from the University of
California, Berkeley, a graduate degree from the University of Vienna and an
M.B.A. degree from the University of California, Berkeley.

James J. Didion, age 59. Mr. Didion has been Chairman and Chief Executive
Officer of the Company since January 1987 and a Director since the Company's
incorporation. Previously, he served as President of the Company following a
career of almost 24 years in sales and management positions in the commercial
brokerage operations of CBRE. Mr. Didion is a member and current trustee of
the Urban Land Institute. He is also a member of the National Realty Committee
and was Chairman of the National Realty Committee from 1993 through June 1996.
Mr. Didion holds an A.B. degree from the University of California, Berkeley
and serves on the University's Advisory Board for the Haas School of Business.
Effective as of the Annual Meeting, Mr. Didion will resign as Chief Executive
Officer of the Company but will continue to serve as Chairman.

Bradford M. Freeman, age 57. Mr. Freeman has been a Director of the Company
since August 1997. Mr. Freeman was a Director of Koll Real Estate Services and
Koll Management Services, Inc. from November

3
<PAGE>

1994 to August 1997. Mr. Freeman is a founding partner of Freeman Spogli & Co.
Incorporated, a private investment company, and its affiliated investment
partnerships or companies, founded in 1983. Mr. Freeman is also a member of
the Board of Directors of RDO Equipment Company, an agricultural and
industrial equipment distributor. Mr. Freeman holds a B.A. degree from
Stanford University and an M.B.A. degree from Harvard University.

Donald M. Koll, age 65. Mr. Koll has been a Director of the Company since
August 1997. Mr. Koll was a Director of Koll Real Estate Services from
November 1994 to August 1997 and Chairman from August 1996 to August 1997. He
also served as Chairman and as a Director of Koll Management Services, Inc.
from June 1988 to August 1997, and served as the Chief Executive Officer of
Koll Management Services, Inc. from June 1988 to May 1991. Mr. Koll founded
The Koll Company in 1962 and has served as Chairman and Chief Executive
Officer of The Koll Company since that time. Since June 1992, Mr. Koll has
been a Director and has served as an executive officer of Koll Real Estate
Group, Inc., a real estate services company, which filed for Chapter 11
bankruptcy protection on July 14, 1997 with a reorganization plan preapproved
by its bondholders. Mr. Koll is also a Director of The Irvine Company and
Fidelity National Financial, Inc., a title company. He holds a B.A. degree
from Stanford University.

Paul C. Leach, age 53. Mr. Leach has been a Director of the Company since
August 1996. Since its founding in 1991, Mr. Leach has served as President of
Paul Leach & Company, a private investment banking firm in San Francisco that
specializes in international and domestic acquisitions and investments. He has
also been Managing Director of The Lone Cypress Company, the owner of Pebble
Beach Company, since 1992. From 1988 through 1991, Mr. Leach was a senior
manager and partner in the international merger and acquisition group at
Deloitte & Touche. Prior to 1988, he held several positions in San Francisco,
including serving as a partner with both Osterweis Capital Management and
Centennial Petroleum Company and manager of corporate development for Natomas
Company. From 1975 through 1977, Mr. Leach served as associate director of the
Domestic Council Staff at the White House during the Ford Administration. Mr.
Leach holds an A.B. degree from Dartmouth College and M.B.A. and J.D. degrees
from Stanford Graduate School of Business and Stanford Law School,
respectively.

David R. Lind, age 49. Mr. Lind is a Senior Vice President of the Company
and has been a real estate salesperson with the Company since November 1977.
Mr. Lind participated in the PGA Tour from 1975 to 1977. Mr. Lind holds a B.A.
degree from Duke University.

Frederic V. Malek, age 62. Mr. Malek has been a Director of the Company
since 1989 and served as Co-Chairman from April 1989 to November 1996. He has
served as Chairman of Thayer Capital Partners, a merchant banking firm he
founded, since 1993. He was President of Marriott Hotels and Resorts from 1981
through 1988 and was Executive Vice President of Marriott Corp. from 1978
through 1988. He was Senior Advisor to the Carlyle Group, L.P., a merchant
banking firm, from November 1988 through December 1991. From September 1989
through June 1990, he was President of Northwest Airlines and, from June 1990
through December 1991, he served as Vice Chairman of Northwest Airlines. From
December 1991 through November 1992, Mr. Malek served as Campaign Manager for
the 1992 Bush/Quayle presidential campaign. He also serves on the Board of
Directors of American Management Systems, Inc.; Automatic Data Processing
Corp.; FPL Group, Inc.; Manor Care, Inc.; Northwest Airlines Corporation;
Paine Webber Funds; and Global Vacation Group, and Aegis Communications Co.,
Inc. Mr. Malek holds a B.S. degree from the United States Military Academy at
West Point and an M.B.A. degree from the Harvard University Graduate School of
Business.

Ray Elizabeth Uttenhove, age 51. Ms. Uttenhove has been a Director of the
Company since August 1997 and Senior Vice President of the Company since
September 1997. Ms. Uttenhove also served as First Vice President of Retail
Tenant Services of the Company from August 1995 to September 1997. Ms.
Uttenhove joined the Company in March 1981. She has been named to the
Company's Colbert Coldwell Circle (representing the top three percent of the
Company's sales force) for 1995 and 1996. In 1995 she was awarded the William
H. McCarthy Award, the highest honor awarded producing professionals within
the Company. Ms. Uttenhove holds a B.A. degree from Mary Baldwin College and
M.A. and M. Ed. degrees from Georgia State University.

4
<PAGE>

W. Brett White, age 39. Mr. White has been President--Brokerage Services
since August 1997. Previously, he was Executive Vice President of CBRE from
March 1994 to July 1997, and Managing Officer of the CBRE Newport Beach,
California office from 1992 to March 1994. Mr. White holds a B.A. degree from
the University of California, Santa Barbara.

Gary L. Wilson, age 59. Mr. Wilson has been a Director of the Company since
1989. Since April 1997, Mr. Wilson has been Chairman of Northwest Airlines
Corporation, for which he served as Co-Chairman from January 1991 to April
1997. From 1985 until January 1990, Mr. Wilson was an Executive Vice
President, Chief Financial Officer and Director for The Walt Disney Company
and remains a Director of The Walt Disney Company. Mr. Wilson also serves on
the Board of Directors of On Command Corporation and Veritas Holdings GmbH.
From 1974 until 1985, he was Executive Vice President and Chief Financial
Officer of Marriott Corporation. Mr. Wilson holds a B.A. degree from Duke
University and an M.B.A. degree from the Wharton Graduate School of Business
and Commerce at the University of Pennsylvania.

Raymond E. Wirta, age 55. Mr. Wirta has been a Director since August 1997
and was appointed Chief Operating Officer in May 1998. Mr. Wirta was Chief
Executive Officer and a Director of Koll Real Estate Services from November
1994 to August 1997. Prior to that, Mr. Wirta held various management
positions with Koll Management Services, Inc. since 1981. Mr. Wirta was a
member of the Board of Directors and served as Chief Executive Officer from
June 1992 to November 1996 to Koll Real Estate Group, Inc., which filed for
Chapter 11 bankruptcy protection on July 14, 1997 with a reorganization plan
preapproved by its bondholders. Mr. Wirta holds a B.A. degree from California
State University, Long Beach and an M.B.A. degree in International Management
from Golden Gate University. Effective as of the Annual Meeting, Mr. Wirta
will succeed Mr. Didion as the Chief Executive Officer of the Company.

The Board of Directors recommends a vote "FOR" election of the nominees for
Director.

5
<PAGE>

Principal Stockholders

The following table sets forth certain information regarding beneficial
ownership of the Company's voting capital stock as of February 28, 1999 by:
(i) each person who is known by the Company to own beneficially more than five
percent of each class of the Company's voting stock; (ii) each of the
Company's Directors and nominees for Directors; (iii) each of the Company's
executive officers named under "Executive Compensation--Summary Compensation
Table" and (iv) all Directors and executive officers of the Company as a
group.

<TABLE>
<CAPTION>
Title
of
Class Number of Shares Percent
------ ---------------- -------
<S> <C> <C> <C>
Capital Research and Management Company
(1)..................................... Common 1,542,800 7.3%
333 South Hope Street
Los Angeles, California 90071
Warburg Pincus Asset Management, Inc.
(2)..................................... Common 1,071,000 5.1%
466 Lexington Avenue
New York, New York 10017
Capital Guardian Trust Company (3)....... Common 1,070,460 5.1%
11100 Santa Monica Blvd.
Los Angeles, California 90025
FS Equity Partners III, L.P. (4)......... Common 3,402,463 16.1%
FS Equity Partners International, L.P.
11100 Santa Monica Blvd.
Suite 1900
Los Angeles, California 90025
Stanton D. Anderson (5).................. Common 27,570 *
Gary J. Beban............................ Common 193,042 *
Richard C. Blum (5)(6)................... Common 317,666 1.5%
James J. Didion (5)(7)(8)................ Common 549,201 2.6%
Bradford M. Freeman (4).................. -- -- --
John C. Haeckel (5)...................... Common 51,000 *
Donald M. Koll (5)(9).................... Common 1,042,722 4.9%
Paul C. Leach (5)(10).................... Common 1,568 *
David R. Lind (11)....................... Common 7,415 *
Frederic V. Malek (5)(12)................ Common 317,027 1.5%
Peter V. Ueberroth (5)(13)............... Common 16,666 *
Ray E. Uttenhove (7)(14)................. Common 3,613 *
W. Brett White........................... Common 38,593 *
Gary L. Wilson (5)....................... Common 6,885 *
Raymond E. Wirta (5)..................... Common 526,589 2.4%
All Directors and executive officers as a
group (15 persons) (15)................. Common 3,092,142 14.0%
</TABLE>
- --------
* Less than 1%.
(1) Based upon a Schedule 13G dated February 8, 1999, Capital Research and
Management Company is registered Investment Adviser under Section 203 of
the Investment Advisers Act of 1940 and is deemed the beneficial owner,
with sole dispositive power and no voting power over the shares
represented in the table, as result of acting as investment adviser to
various investment companies registered under Section 8 of the Investment
Company Act of 1940.
(2) Based on a Schedule 13G dated January 8, 1999, Warburg Pincus Asset
Management, Inc. is a registered Investment Adviser and is deemed the
beneficial owner with sole dispositive power over 1,071,000 shares, sole
voting power for 981,900 shares and shared voting power for 80,000 shares
as a result of its serving as investment adviser to various registered
investment companies.
(3) Based on a Schedule 13G dated February 8, 1999, Capital Guardian Trust
Company, a bank as defined in Section 3(a)(6) of the Securities Exchange
Act of 1934, is deemed the beneficial owner of, and has sole

6
<PAGE>

dispositive power for 1,070,460 shares, and has sole voting power for
820,460 shares as a result of its serving as the investment manager of
various institutional accounts.
(4) Based upon a Schedule 13D dated August 28, 1997. Includes 3,278,448
shares of Common Stock, and does not include 351,585 warrants to purchase
Common Stock, held by FS Equity Partners III, L.P., of which FS Capital
Partners, L.P. is the general partner. Bradford M. Freeman, a Company
Director, is a stockholder of FS Holdings, Inc., the general partner of
FS Capital Partners, L.P. Also includes 124,015 shares of Common Stock,
but not 13,299 warrants, held by FS Equity Partners International, L.P.,
of which FS&Co. International, L.P. is the general partner. Mr. Freeman
is a stockholder of FS International Holdings Limited, the general
partner of FS&Co. International, L.P. Mr. Freeman has shared investment
power over the securities and disclaims ownership of the shares and
warrants except to the extent of his pecuniary interest.
(5) Represents number of shares of Common Stock which the named individual
beneficially owns as well as those which the individual has options to
acquire that are exercisable on or before April 29, 1999, which options
have not been exercised. The respective numbers shown in the table
include the following number of option shares for the following
individuals: Anderson--4,455; Blum--6,666; Didion--148,396; Haeckel--
16,000; Koll--308,432; Leach--568; Malek--6,153; Ueberroth--6,666;
Wirta--521,589 (options include an option to purchase 521,589 shares of
Common Stock from The Koll Holding Company); and Wilson--6,885.
(6) Includes 311,000 shares held by BK Capital Partners I, L.P., BK Capital
Partners II, L.P., BK Capital Partners IV, L.P., Stinson Capital
Partners, L.P. and Stinson Capital Partners II, L.P. for which Richard C.
Blum & Associates, L.P. is the general partner and a managed account of
which Richard C. Blum & Associates, L.P. is investment manager. Mr. Blum
is a controlling person and Chairman of Richard C. Blum & Associates,
Inc., the general partner of Richard C. Blum & Associates, L.P. and he is
also a limited partner of Richard C. Blum & Associates, L.P. Mr. Blum
disclaims beneficial ownership of these securities except to the extent
of his pecuniary interest therein.
(7) Does not include shares of Common Stock issued in the name of the Company
in respect of Common Stock units credited to the following persons in the
following amounts under the Company's Deferred Compensation Plan but
which are not beneficially owned by such persons: Didion--121,970; and
Uttenhove--826. The foregoing amounts do not include any Common Stock
units credited in respect of the deferred portion, if any, of bonuses
payable for 1998.
(8) Includes 7,000 shares held by a trust for the benefit of three members of
Mr. Didion's immediate family.
(9) Represents number of shares of Common Stock held by The Koll Holding
Company, which is wholly owned by The Koll Company, which in turn is
wholly owned by The Koll Company Stock Trust, of which Mr. Koll is the
trustee and co-beneficiary. Does not include 84,988 warrants to purchase
Common Stock. Includes shares that are subject to the options held by Mr.
Wirta (521,589 shares).
(10) Includes 1,000 shares held in the Paul C. Leach and Co. Defined Benefit
Pension Plan Trust.
(11) Mr. Lind is not currently serving as a Director but is a nominee for
Director.
(12) Includes 98,000 shares owned by a trust for which Mr. Malek is the
trustee.
(13) Mr. Ueberroth will serve on the Board of Directors until the Annual
Meeting.
(14) Includes 103 shares for which Ms. Uttenhove shares investment and voting
power with her husband.
(15) Includes 1,025,810 shares of Common Stock subject to outstanding options
exercisable on or before April 29, 1999 (not including Mr. Wirta's option
to purchase 521,589 shares).

7
<PAGE>

Committees and Meetings of the Board of Directors

The Board of Directors held seven meetings during calendar year 1998.

The Executive Committee is composed of four members and met eight times in
1998. The members of the Executive Committee are Messrs. Didion, Wirta,
Haeckel and Stafford; however, only two members of such Committee vote,
Messrs. Didion and Wirta. Through November 1998, Mr. W. Brett White, Mr. Gary
Beban, Mr. Donald Newell and Mr. Barry White also served as members of the
Committee, of which Mr. Beban and Mr. W. Brett White were voting members. The
Executive Committee acts on behalf of the Board of Directors when the Board of
Directors is not in session. The Executive Committee has no authority with
respect to any matter as to which any other board committee has authority.

The Compensation Committee is composed of four members and met four times in
1998. The members of the Compensation Committee are Messrs. Blum, Freeman,
Koll and Ueberroth. The Compensation Committee is authorized to determine the
salaries of the Company's Chairman and Chief Executive Officer and, upon the
recommendation of the Chief Executive Officer, the salaries and incentive
compensation of the President and Chief Financial Officer. The Compensation
Committee also authorizes the adoption of employee benefit plans (other than
plans which involve more than 250,000 shares of Common Stock) and makes grants
of stock options, restricted stock awards and all other stock related
incentive compensation awards to employees and Directors pursuant to plans
adopted by the Company. Outside Directors comprise all of the members of the
Compensation Committee.

The Audit Committee is composed of three members and met four times in 1998.
The members of the Audit Committee are Messrs. Anderson, Malek, and Leach, all
of whom are outside Directors of the Company. The purpose of the Audit
Committee is to recommend a firm of independent public accountants to be
appointed by the Board of Directors subject to stockholder ratification,
review the Company's annual consolidated financial statements and consult with
the representatives of the independent public accountants, the Company's
internal auditors and the Chief Financial Officer and Principal Accounting
Officer with regard to the adequacy of internal controls.

The Acquisition/Investment Committee is composed of five members and met
twice in 1998. The members of the Acquisition/Investment Committee are Messrs.
Blum, Didion, Malek, Ueberroth and Wilson. The purpose of the
Acquisition/Investment Committee is to authorize the undertaking by the
Company of definitive negotiations with respect to any acquisition or
investment that contemplates the issuance of any class of the Company's stock
up to $25 million or the aggregate cost of which is likely to exceed $10
million but not more than $25 million. Acquisitions with a cost of over $25
million require approval of the Board of Directors. Cost includes the purchase
price of the acquisition plus any indebtedness (other than payables) assumed.

The Corporate Governance Committee is composed of three members and met
twice in 1998. The members of the Corporate Governance Committee are Messrs.
Anderson, Leach and Malek. The purpose of the Corporate Governance Committee
is to oversee matters related to corporate governance, including the process
of nominating Directors for election, and to nominate Directors for election.
The Corporate Governance Committee considers nominees recommended by
stockholders and recommends nominees to the Board of Directors.

Messrs. Blum, Ueberroth and Wilson attended fewer than 75% of the aggregate
of the total number of meetings of the Board of Directors during fiscal 1998.

Directors Fees

Each of the Directors of the Company who is not also an employee officer is
entitled to receive a fee of $2,000 for attendance at each meeting of the
Board of Directors and at each meeting of a board committee, and an annual
retainer of $20,000. A Director may elect to receive all or any portion of his
or her fees and retainer as options to purchase shares of Common Stock with an
exercise price of $1. Beginning in 1999, each Director who is not also an
employee will receive 5,000 shares of Common Stock in his or her first year
serving on the

8
<PAGE>

Board of Directors and 1,000 shares per year thereafter. However, each
Director serving as of January 1, 1999, who was not also an employee received
5,000 shares of Common Stock, regardless of whether such Director was in his
or her first year serving on the Board of Directors. No Director received
compensation from the Company for services as a Director in 1998 in excess of
$35,000. Non-employee Directors are reimbursed for their expenses for each
meeting attended.

Executive Compensation

Summary Compensation Table. The following table sets forth information
concerning the compensation of the Company's Chief Executive Officer and the
Company's four most highly compensated executive officers for the three years
ended December 31, 1998.

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------ ----------------------
Securities
Other Restricted Underlying
Annual Stock Stock All Other
Name and Principal Position Year Salary Bonus(1) Compensation(2) Awards Options Compensation(3)
- --------------------------- ---- -------- -------- --------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James J. Didion......... 1998 $500,000 $537,500 $131,718 -- -- $--
Chairman of the Board 1997 500,000 800,000 131,718 -- 200,000 1,846
and Chief Executive
Officer 1996 400,000 574,678 58,224 (4) -- 1,262
Raymond E. Wirta........ 1998 $384,387 $395,920 $12,000 -- 80,000(5) --
President--Financial
Services 1997 108,429 50,000 4,000 -- 100,000(5) --
1996 -- -- -- -- -- --
W. Brett White.......... 1998 $281,250 $318,908 $45,341 (6) 48,000(5) 2,138
Chief Operating Officer 1997 178,125 432,167 12,000 -- 60,000 1,846
1996 150,000 156,251 12,000 -- -- 1,262
John C. Haeckel......... 1998 $300,000 $260,580 $67,908 -- -- --
Senior Executive Vice
President 1997(7) 206,250 450,749(8) 40,991 (9) 40,000 --
and Chief Financial
Officer 1996 -- -- -- -- --
Gary J. Beban........... 1998 $325,000 $318,908 $48,874 -- 48,000(5) --
President--Corporate
Services 1997 325,000 739,273 48,874 -- 60,000 1,846
1996 325,000 503,156 26,237 -- -- 1,262
</TABLE>
- --------
(1) Bonus for each year is paid pursuant to the Annual Management Bonus Plan
in the first quarter of the following year. (See "Proposal No. 3--Approval
and Adoption of the Amended and Restated Annual Management Bonus Plan").
(2) With respect to Other Annual Compensation paid in 1996, 1997 and 1998, the
amounts listed include $12,000 automobile allowance (with the exception of
Mr. Wirta, who in 1997 received a $4,000 automobile allowance) and the
interest accrued in 1996 and forgiven in 1997, the interest accrued in
1997 and forgiven in 1998, and the interest accrued in 1998 and forgiven
in 1999, under the promissory notes delivered by Messrs. Didion and Beban
pursuant to the Company's Equity Incentive Plan (the "EIP"). Includes
interest accrued in 1997 and forgiven in 1998 and interest accrued in 1998
and forgiven in 1999 under the promissory note delivered by Mr. Haeckel
pursuant to the EIP, and also includes interest accrued in 1998 and
forgiven in 1999 under the promissory note delivered by Mr. White pursuant
to the EIP. (See notes 4, 6 and 9.)
(3) Consists of each individual's allocable share of profit sharing
contributions in the form of shares of Common Stock made by the Company to
the Company's Cap Plan, based on the value of the stock at the time of
contribution based on the appraised or market value of Common Stock.
(4) Pursuant to the Company's Equity Incentive Plan, shares of Common Stock
were purchased by such individual in 1996 for a purchase price of $10 per
share (the appraised value of the Common Stock at the time of such
purchase), which was paid by delivery of a full recourse promissory note.
The notes bear interest at the rate of 6.84% per annum which may be
forgiven if the executive's performance produces a high enough level of
bonus (approximately $7,500 in interest is forgiven for each $10,000
bonus). The aggregate number and value of such shares held by the
individuals named above as of December 31, 1998 and net of the purchase
price of such shares was as follows: Mr. Didion--175,027 ($1,422,094); and

9
<PAGE>

Mr. Beban--53,910 ($438,019). The shares vest at the rate of 5 percent per
quarter commencing December 31, 1995. As a result of bonuses paid in 1997,
1998 and in 1999 all interest on the various promissory notes for 1996,
1997 and 1998, respectively, were forgiven.
(5) In 1998, Mr. Wirta received options to purchase 100,000 shares of Common
Stock, which were amended on December 15, 1998. Pursuant to the amendment,
the options were repriced and the number of shares underlying such options
was reduced by 20% to 80,000 shares. Mr. Wirta also had an options for
100,000 shares, granted in 1997, amended on December 15, 1998 and reduced
to options to purchase 80,000 shares of Common Stock. Messrs. White and
Beban did not receive any new option grants in 1998, but Messrs. White and
Beban each had options to purchase 60,000 shares of Common Stock amended
and repriced on December 15, 1998, pursuant to which the shares underlying
such options were reduced to 48,000 shares of Common Stock each. See the
"Option Grants Table" and accompanying footnotes for additional
information.
(6) Pursuant to the Company's Equity Incentive Plan, in 1998 Mr. White
purchased 25,000 shares of Common Stock for a purchase price of $38.50 per
share (the fair market value of the Common Stock at the time of the
purchase) which was paid by a full recourse promissory note. The note
bears interest at a rate of 5.94% per annum which may be forgiven if the
executive's performance produces a high enough level of bonus
(approximately $7,500 in interest is forgiven for each $10,000 bonus). Mr.
White held a total of 25,000 shares as of December 31, 1998, which, net of
the purchase price, had a negative value. A First Amendment to the
Promissory Note dated June 1, 1998 provides that the portion of the then
outstanding principal in excess of the fair market value of the shares
shall be forgiven in the event that Mr. White is an employee of the
Company or its subsidiaries on November 16, 2002 and the fair market value
of a share of the Company's Common Stock is less than $38.50 on November
16, 2002. In the event of any such principal forgiveness the Company shall
pay to Mr. White an amount equal to any federal, state or local income tax
liability resulting from such principal forgiveness.
(7) Mr. Haeckel's employment by the Company commenced in April 1997.
(8) Includes a bonus of $75,000 paid in the second quarter of 1997.
(9) Pursuant to the Company's Equity Incentive Plan, Mr. Haeckel purchased
35,000 shares of Common Stock for a purchase price of $23.50 per share
(the market value of the Common Stock at the time of such purchase), which
was paid by delivery of a full recourse promissory note. The note bears
interest at a rate of 6.8% per annum which may be forgiven if the
executive's performance produces a high enough level of bonus
(approximately $7,500 in interest is forgiven for each $10,000 bonus). Mr.
Haeckel held a total of 35,000 shares as of December 31, 1998, which, net
of the purchase price, had a negative value. A First Amendment to the
Promissory Note effective as of November 17, 1998 provides that the
portion of the then outstanding principal in excess of the fair market
value of the shares shall be forgiven in the event that Mr. Haeckel is an
employee of the Company or its subsidiaries on November 16, 2002 and the
fair market value of a share of the Company's Common Stock is less than
$23.50 on November 16, 2002. In the event of any such principal
forgiveness the Company shall pay to Mr. Haeckel an amount equal to any
federal, state or local income tax liability resulting from such principal
forgiveness.

As part of the senior management succession planning which began in early
1998, upon election by the Board of Directors at the Annual Meeting Ray Wirta
will succeed James Didion as the Company's CEO. Mr. Didion will continue as
Chairman. As part of this change, the Company and Mr. Didion have entered into
an amended and restated ten-year employment agreement which provides for an
annual salary of $500,000 with no incentive compensation or bonus anticipated
after 1999. Mr. Didion will act as a Senior Adviser to the Company during the
term of his employment. For so long as he is employed, the Company will
provide Mr. Didion with medical and other benefits generally made available to
senior officers and an office, a secretary and clerical help. The amended
agreement is terminable by the Company for cause. Cause includes conviction of
a felony, fraud and willful and substantial failure to render services. If the
agreement is terminated without cause or in the event of his death or total
disability, Mr. Didion (or his estate) will continue to be entitled to the
salary and will be fully vested in any unvested stock options or stock
purchase rights.

10
<PAGE>

Option Grants Table. The following table sets forth information concerning
grants of stock options during the year ended December 31, 1998 to the persons
named in the preceding table.

<TABLE>
<CAPTION>
Potential
Realizable Value at
Number of Percentage Assumed Annual
Securities of Total Rates of Stock
Underlying Number of Options Price Appreciation
Options Canceled Securities Granted to Exercise for Option Term
Pursuant to Underlying Employees Price Expiration ----------------------
Name Repricing Option Granted in 1997 Per Share Date 5% ($) 10% ($)
---- ---------------- -------------- ---------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Raymond E. Wirta -- 100,000 (4) $38.50 3/08/08 -- (4) -- (4)
20,000 80,000(2) 6.8% $20.00 4/22/07 $316,264 $1,225,969
20,000 80,000(3) 6.8% $20.00 3/08/08 $400,277 $1,473,055
W. Brett White 12,000 48,000(3) 4.0% $20.00 9/22/07 $213,515 $ 804,694
Gary J. Beban 12,000 48,000(3) 4.1% $20.00 9/22/07 $213,515 $ 804,694
</TABLE>
- --------
(1) Pursuant to an option amendment on December 15, 1998, Messrs. Wirta, White
and Beban repriced options to purchase 60,000, 60,000, and 200,000 shares,
respectively. Pursuant to the repricing, the number of shares underlying
the options was reduced by 20% resulting in 48,000, 48,000 and 160,000
shares underlying the repriced options for Messrs. Wirta, White and Beban,
respectively.
(2) The options vest 33-1/3% per year beginning December 15, 2001.
(3) The options vest 20% per year beginning December 15, 1999.
(4) These options were amended on December 15, 1998 and pursuant to such
amendment the number of shares underlying the options was reduced to
80,000. Such repriced options are reflected in the second succeeding entry
in the table.

Aggregated Options Table. The following table sets forth information
concerning unexercised options held as of December 31, 1998 by the persons
named in the table under "Summary Compensation Table" above. As of February
28, 1998, no options had been exercised by any of such persons.

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Value December 31, 1998 December 31, 1998
Shares Acquired Realized ------------------------- -------------------------
Name on Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James J. Didion 75,000 $262,500 122,588 77,412 $-- $--
Raymond E. Wirta -- -- -- 160,000 $-- $--
W. Brett White 12,500 $ 36,750 -- 48,000 $-- $--
John C. Haeckel -- 12,000 28,000 $-- $--
Gary J. Beban 70,000 $220,500 -- 48,000 $-- $--
</TABLE>

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions. The members of the Compensation Committee of the Board of
Directors, who are appointed by the Board of Directors, are Messrs. Blum,
Freeman, Koll and Ueberroth.

Compensation Committee Report on Executive Compensation.

The Company's policies relating to compensation of its executive officers
and other senior executives are intended to provide incentives to attract,
retain and reward executives in order to enhance the Company's profitability
and performance. This goal is achieved in part by materially linking each
individual executive's compensation with the results achieved by such
executive.

Compensation of each of the named executive officers as well as other senior
executives consists of a base salary and annual incentive compensation
pursuant to the Annual Management Bonus Plan. (See "Proposal No. 3--Approval
and Adoption of the Amended and Restated Annual Management Bonus Plan"). Base
salaries are below the levels for a number of the Company's competitors as the
Company relies significantly on annual and longer term incentive compensation
to attract, retain and motivate senior managers.

11
<PAGE>

Annual incentive compensation, which generally is paid in cash, is tied to
the Company's financial performance, the performance of certain units within
the Company and the results achieved by each individual executive in the
preceding fiscal year. The annual incentive compensation actually paid to each
executive is based on the Company's level of financial performance, the level
of performance of the business unit for which the executive is responsible and
the executive's achievement of individual performance goals established at the
beginning of the year. Performance goals range from specific financial goals
(such as sales growth, margin improvement or cost reductions) to strategic
goals (such as increased market share, new product development and innovation
and cross-selling) to management goals (such as productivity and quality
improvement and personnel matters). Specific weighting is assigned to each
identified goal. At the end of the year, performance of these goals is
determined on an arithmetic scale with the pre-established weighting.

The Chief Executive Officer's annual incentive compensation, like that of
other executives, is tied to the Company's financial performance and the
results achieved by the Chief Executive Officer as evaluated by the
Compensation Committee. The Chief Executive Officer's lower annual incentive
compensation for 1998 was based in part on the Company's operating results in
1998 compared to 1997.

Executive officers and other senior officers are also provided longer term
incentive compensation through grants of restricted stock awards and stock
options which vest over time. The Compensation Committee believes that stock
option grants provide an incentive to senior management to view the Company
from the perspective of equity shareholders because such options provide value
to the recipient only when the value of the Company's stock increases above
the grant price of the options. Grants of restricted stock provide a similar
incentive. In determining recommendations of grants of restricted stock and
stock options to individual executives (other than to the Chief Executive
Officer), the Chief Executive Officer considers, among other things, the level
of responsibility and contribution and anticipated performance requirements of
each individual.

In 1996 the Compensation Committee of the Board of Directors adopted the
1996 Equity Incentive Plan (the "Equity Incentive Plan") and the Board of
Directors reserved 550,000 shares of Common Stock for issuance thereunder. The
purpose of the plan is to offer selected senior executives an opportunity to
acquire a proprietary interest in the success of the Company, or to increase
such interest, by purchasing at fair market value shares of the Company's
Common Stock. In 1997, 35,000 shares were sold to a senior executive for a
purchase price of $23.50 and in 1998, 25,000 shares were sold to a senior
executive for a purchase price of $38.50 per share. See Notes 4, 6 and 9 to
"Executive Compensation--Summary Compensation Table" above.

In 1993 the Code was amended to eliminate the deduction for compensation in
excess of $1 million per year paid to the chief executive officer and the four
top-paid executive officers of public reporting companies. The Company
currently does not intend to limit compensation to its executive officers
because of limits on deductions under the Code. (See "Proposal No. 3--Approval
and Adoption of the Amended and Restated Annual Management Bonus Plan").

On November 19, 1998, the Committee approved a stock option repricing
program pursuant to which any employees having options with an exercise price
above $20.00 per share were entitled to elect to amend such options for
options having: (i) an exercise price of $20.00 (the closing price of the
Company's Common Stock on December 15, 1998, the effective date of the amended
options, was $15.94); (ii) a 20% reduction in the number of option shares and
(iii) generally the same terms and conditions, except that the amended options
vesting schedule restarted on December 15, 1998. Options to purchase 1,292,676
shares of Common Stock were amended pursuant to the program, resulting in
amended options to purchase 1,034,152 shares of Common Stock.

The Committee believes that stock options are a critical component of the
compensation offered by the Company to promote long-term retention of key
employees, motivate high levels of performance and recognize employee
contributions to the success of the Company. Prior to the repricing, the
exercise price of a options held by employees eligible to participate in the
program was in excess of the market price at a level that the Committee
believed rendered such options no longer an effective tool to encourage
employee retention or to motivate high levels of performance.

12
<PAGE>

The following table sets forth certain information concerning the repricing
of stock options held by executive officers of the Company from December 1996
(when the Company became a reporting company pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended) through December 1998.

Ten-Year Option Repricings

<TABLE>
<CAPTION>
Number of Number of
Securities Securities Market Price Exercise Length of
Underlying Underlying of Stock at Price at Original Option
Options/SARs Options/SARs Time of Time of New Term Remaining
Repriced or Repriced or Repricing or Repricing or Exercise at Date of
Name Date Amendment Amended Amendment Amendment Price Repricing
- ---- -------- ------------ ------------ ------------ ------------ -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Raymond Wirta 12/15/98 100,000 80,000 $15.94 $38.50 $20.00 9 years 3 months
President--Financial
Services 12/15/98 100,000 80,000 $15.94 $22.75 $20.00 8 years 4 months
W. Brett White 12/15/98 60,000 48,000 $15.94 $31.00 $20.00 8 years 9 months
President--Brokerage
Services
Gary Beban 12/15/98 60,000 48,000 $15.94 $31.00 $20.00 8 Years 9 months
President--Corporate
Services
</TABLE>

The Compensation Committee believes that its actions are, and have been,
consistent with the Company's policies as noted above and in the best
interests of the Company's stockholders.

The foregoing report has been furnished by Messrs. Blum, Freeman, Koll, and
Ueberroth. The Compensation Committee is appointed by the Board of Directors
and consists of outside, independent Directors.

13
<PAGE>

Stock Performance Graph. Set forth below is a graph comparing the yearly
percentage change in the cumulative total stockholder return on the Company's
Common Stock with the cumulative total stockholder return of (i) the NASDAQ
Market Index; (ii) the NYSE Market Index (the Company moved to, and commenced
trading on, the New York Stock Exchange on November 7, 1997); and (iii) a peer
group index consisting of the common stock of Grubb & Ellis Co., a commercial
real estate brokerage company traded on the New York Stock Exchange, for the
period from December 31, 1993 through December 31, 1998. Cumulative total
stockholder return consists of change in stock price and cumulative dividends,
assuming dividend reinvestment. The amount used for the stock price of the
Company's Common Stock for periods prior to November 26, 1996 (when the Common
Stock commenced trading on The Nasdaq National Market) is the appraised value
for purposes of the Company's Capital Accumulation Plan of the Company's Class
B-2 Common Stock (which converted into Common Stock on a one-for-one basis on
December 2, 1996). The appraised value reflected a discount applied by the
outside appraisal firm due to the Company's stock not being publicly traded
and being subject to numerous restrictions on transfer. The comparisons in
this table are required by the Securities and Exchange Commission and are not
intended to forecast or be indicative of possible future performance of the
Company's stock.

STOCK PRICE PERFORMANCE GRAPH

[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period CB Richard Ellis Nasdaq NYSE Peer
(Fiscal year covered) Services, Inc. Market Index Market Index Group
--------------------- ---------------- ------------ ------------ -------
<S> <C> <C> <C> <C>
Measurement Pt-
12/31/1993............. $100.00 $100.00 $100.00 $100.00
FYE 12/30/1994.......... $128.46 $104.99 $ 98.06 $ 64.00
FYE 12/29/1995.......... $153.08 $136.18 $127.15 $ 64.00
FYE 12/31/1996.......... $307.69 $169.23 $153.16 $144.00
FYE 12/31/1997.......... $495.23 $207.00 $201.50 $438.00
FYE 12/31/1998.......... $278.92 $291.96 $239.77 $258.00
</TABLE>

14
<PAGE>

Management

In addition to Messrs. Didion, Beban, White and Wirta, whose biographical
information is included under "Directors and Nominees for Directors," the
following persons are executive officers of the Company. All executive
officers hold their office at the pleasure of the Board of Directors:

John C. Haeckel, age 40. On April 1, 1997, Mr. Haeckel joined the Company as
Chief Financial Officer and Senior Executive Vice President. From January 1996
to March 1997, Mr. Haeckel was President of Perdix Group, LLC, a management
consulting firm that he founded. From October 1993 to November 1995, he was
Chief Financial Officer and from April 1994 to November 1995 he was Executive
Vice President of Broadway Stores, Inc. From 1987 to 1994 he was a General
Partner and from 1984 to 1986 he was an Associate with Chilmark Partners, a
merchant banking firm. Mr. Haeckel holds a B.A. degree and a Masters of
Business and Public Management degree from Rice University.

Walter V. Stafford, age 58. Mr. Stafford has served as Senior Executive Vice
President and General Counsel of the Company since 1995. Mr. Stafford was a
partner at the law firm Pillsbury Madison & Sutro LLP from 1988 to 1995 and
from 1973 to 1982. From 1982 to 1988 he was Senior Vice President and General
Counsel at Diasonics, Inc., a medical device manufacturer, and from 1982 to
1994 he was a Director of that company. Mr. Stafford holds a B.A. degree from
the University of California, Berkeley and an L.L.B. degree from Boalt Hall.

Certain Relationships and Related Transactions

In February 1995 the Company retained the law firm of McDermott, Will &
Emery, to which Mr. Anderson is counsel, to provide services to the Company
consisting of legal counsel in connection with the Company's activities with
certain Federal agencies.

In connection with the Company's acquisition of Koll Real Estate Services
through a merger on August 28, 1997, the Company entered into an employment
agreement, dated May 14, 1997, with Mr. Rothe (the "Rothe Employment
Agreement"), and into a consulting agreement, dated July 16, 1997, with Mr.
Koll (the "Koll Consulting Agreement"), both which became effective as of
August 28, 1997. Pursuant to the Rothe Employment Agreement, the Company
agreed to employ Mr. Rothe as Senior Executive Vice President of the Company.
Pursuant to such employment agreement, Mr. Rothe is entitled to receive (i) a
base annual salary in the amount of $325,000 which will be reviewed from time
to time by the Company but will not be made less than $325,000, (ii)
participation in the Annual Management Bonus Plan which may entitle him to an
annual bonus equal to, less than or greater than one hundred percent of his
salary and (iii) a grant of a ten year stock option for 100,000 shares of
Common Stock at an exercise price of $22.75 per share. The option vests as to
one-third of the shares on August 28, 2000, as to two-thirds on August 28,
2001, and as to all of the shares on August 28, 2002. Upon any termination of
employment, Mr. Rothe will forfeit all unvested shares. Mr. Rothe's employment
agreement expires August 27, 1999. In addition options on identical terms to
Mr. Rothe's were granted to Mr. Wirta (100,000 shares) and to Mr. Richard S.
Abraham (50,000 shares) in connection with their

15
<PAGE>

retention as employees of the Company. Mr. Abraham has resigned from the
Company effective March 31, 1998 and has forfeited such option.

Pursuant to the Koll Consulting Agreement, Mr. Koll agreed to serve as a
consultant to the Company as an independent contractor. Mr. Koll is entitled
to receive (i) a base salary of $12,500 per month and (ii) the grant of a
stock option to purchase 250,000 shares of Common Stock for an exercise price
of $36.75 per share which is fully vested but will terminate one year after
such consulting agreement is terminated. The Koll Consulting Agreement had a
term of one year which ended on August 27, 1998.

Pursuant to the Company's Equity Incentive Plan, a restricted stock purchase
plan, shares of Common Stock were purchased in 1996 by the executive officers
and Directors named below for a purchase price of $10 per share (the appraised
value of the Common Stock at the time of such purchase), which was paid by
delivery of a full recourse promissory note. The notes bear interest at the
rate of 6.84% per annum which may be forgiven if the executive's performance
produces a high enough level of bonus (approximately $7,500 in interest is
forgiven for each $10,000 bonus). The aggregate number and value of such
shares held by the individuals named above as of December 31, 1998 and net of
the purchase price of such shares was as follows: Mr. Didion--175,027
($1,422,094) and Mr. Beban--53,910 ($438,019). The shares vest at the rate of
5 percent per quarter commencing December 31, 1996. As a result of bonuses
paid in 1999, all interest on the various promissory notes for 1998 were
forgiven. In 1997, Mr. Haeckel purchased 35,000 shares of Common Stock for a
purchase price of $23.50 per share (the market value of the Common Stock on
the date of the purchase), which was paid by the delivery of a promissory
note. The note bears interest at a rate of 6.8% per annum, which may be
forgiven as previously described. As of December 31, 1998, Mr. Haeckel held
35,000 shares which, net of the purchase price, had a negative value. The
shares vest at a rate of 5% per quarter commencing June 30, 1997. As a result
of the bonus paid in 1999, interest on the promissory note for 1998 was
forgiven. A First Amendment to the Promissory Note effective as of November
17, 1998 provides that the portion of the then outstanding principal in excess
of the fair market value of the shares shall be forgiven in the event that Mr.
Haeckel is an employee of the Company or its subsidiaries on November 16, 2002
and the fair market value of a share of the Company's Common Stock is less
than $23.50 on November 16, 2002. In the event of any such principal
forgiveness the Company shall pay to Mr. Haeckel an amount equal to any
federal, state or local income tax liability resulting from such principal
forgiveness. In 1998, Brett White purchased 25,000 shares of Common Stock for
a purchase price of $38.50 per shares (the market value of the Common Stock on
the date of purchase), which was paid for by the delivery of a promissory
note. The note bears interest at a rate of 5.94% per annum, which may be
forgiven as previously described. As of December 31, 1998, Mr. White held
25,000 shares which, net of the purchase price, had a negative value. The
shares are subject to a right of repurchase by the Company, which terminates
with respect to 5% of the total number of shares each quarter commencing March
31, 1998. A First Amendment to the Promissory Note dated June 1, 1998 provides
that the portion of the then outstanding principal in excess of the fair
market value of the shares shall be forgiven in the event that Mr. White is an
employee of the Company or its subsidiaries on November 16, 2002 and the fair
market value of a share of the Company's Common Stock is less than $38.50 on
November 16, 2002. In the event of any such principal forgiveness the Company
shall pay to Mr. White an amount equal to any federal, state or local income
tax liability resulting from such principal forgiveness.

Richard C. Blum & Associates, L.P., of which Mr. Blum is President, proposed
to enter into a joint venture with the Company and Westmark Realty Advisors
L.L.C., a wholly owned subsidiary of the Company, to propose to acquire the
assets or stock of Triad Park, L.L.C., Richard C. Blum & Associates, L.P. and
Westmark Realty Advisors L.L.C. agreed not to proceed with the proposed joint
venture in February 1998.

The Company and CBRE have entered into Indemnity Agreements with each of
their present Directors, some of whom are also officers of the Company.

16
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 and the regulations of
the Securities and Exchange Commission (the "Commission") thereunder require
the Company's executive officers and Directors to file reports of ownership
and changes in ownership of the Company's securities with the Commission and
to furnish the Company with copies of all such reports they file. Based on its
review of such reports received by it and written representations from certain
reporting persons, the Company believes that during 1998 all filing
requirements applicable to its executive officers and Directors were met.

PROPOSAL NO. 2

PROPOSAL TO APPROVE AND ADOPT THE CB RICHARD ELLIS SERVICES, INC.
1999 EMPLOYEE STOCK OPTION PLAN

On February 23, 1999, the Board of Directors approved adoption of the
Company's 1999 Employee Stock Option Plan (the "Stock Plan"), subject to the
approval of the Company's stockholders at the Annual Meeting. The following
summary of the principal features of the Stock Plan is qualified by reference
to the terms of the Stock Plan, a copy of which is attached hereto as Appendix
A. Stockholders are urged to read the Stock Plan in its entirety.

Stock Plan

The Stock Plan provides for the grant of options or awards to purchase of an
aggregate of 1,000,000 shares of Common Stock, including both incentive stock
options ("ISO") to purchase Common Stock intended to qualify for preferential
tax treatment under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and nonstatutory stock options ("NSO") to purchase
Common Stock that do not qualify for such treatment under the Code. All
employees (including officers and Directors) of the Company or any subsidiary
and any independent contractor who performs services for the Company or a
subsidiary are eligible to receive grants of NSOs or ISOs; provided, however,
that such employee or independent contractor must be identified by the Chief
Executive Officer of the Company as a key employee.

The purpose of the Stock Plan is to assist the Company in the recruitment,
retention and motivation of employees and of independent contractors who are
in a position to make material contributions to the Company's progress. The
Stock Plan offers a significant incentive to the employees and independent
contractors of the Company by enabling such individuals to acquire the Common
Stock, thereby increasing their proprietary interest in the growth and success
of the Company. The Company believes that the granting of options is necessary
to attract the highest quality personnel as well as to reward and thereby
retain existing key personnel. Moreover, the attraction and retention of such
personnel is essential to the continued progress of the Company which
ultimately is in the interests of the Company's stockholders.

Administration

Administration of the Stock Plan has been delegated to the Compensation
Committee, which consists of two or more disinterested members of the Board of
Directors. Subject to the limitations set forth in the Stock Plan, the
Compensation Committee has the authority to determine, among other things, to
whom options will be granted, the number of shares, the term during which an
option may be exercised and the rate at which the options may be exercised and
the shares may vest. All questions of interpretation or application of the
Stock Plan are determined by the Compensation Committee, whose decisions are
final and binding upon all participants.

Terms of Options and Awards

The maximum term of each option that may be granted under the Stock Plan is
10 years. An option may, if so determined by the Compensation Committee,
constitute an ISO to the extent that the aggregate fair market

17
<PAGE>

value (determined at the time the option is granted) of Common Stock with
respect to which ISOs are exercisable for the first time by any optionee
during any calendar year (under the Stock Plan and all other stock option
plans of the Company or its subsidiaries) does not exceed $100,000. No options
may be granted under the Stock Plan to the extent such grant would cause the
total number of shares of Common Stock subject to stock options granted by the
Company (excluding only stock options granted pursuant to the 1998 Stock
Purchase Plan) pursuant to any compensatory stock option plan to exceed 15
percent of the outstanding shares of Common Stock of the Company.

The exercise price under each option shall be the fair market value of
Company's common stock on the date the option is granted. The exercise price
may be paid by (i) cashier's check or wire transfer, (ii) with the consent of
the Compensation Committee, through the tender to the Company of shares of
Common Stock, which shares shall be valued, for purposes of determining the
extent to which the exercise price has been paid thereby, at their fair market
value on the date of exercise or (iii) with the consent of the Compensation
Committee, through the exercise of a full recourse promissory note on terms
satisfactory to the Compensation Committee. The Company shall have the right,
as a condition to the exercise of any option, to withhold from any amount
payable to the optionee, or require the optionee to remit to the Company (or a
subsidiary) an amount sufficient to satisfy any federal, state, local or
foreign withholding tax requirements imposed with respect to the exercise of
the option or the issuance of shares of Common Stock pursuant to the option.

Amendment and Termination

The Board of Directors or the Compensation Committee may, at any time and
from time to time, amend, suspend or terminate the Stock Plan as to any shares
of Common Stock as to which options have not been granted. No amendment shall,
without the approval of the Company's stockholders, (a) materially change the
requirements as to the eligibility to receive options, (b) increase the
maximum number of shares subject to the Stock Plan (with certain exceptions
described below in "Effect of Certain Corporate Events"), (c) change the
minimum option price (with certain exceptions described below in "Effect of
Certain Corporate Events"), (d) increase the maximum period during which
options may be exercised, (e) extend the term of the Stock Plan or (f)
materially increase the benefits accruing to any optionee under the Stock
Plan.

Effect of Certain Corporate Events

If the outstanding shares of Common Stock are increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company, by reason of any recapitalization, stock split-up,
combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase affecting such
outstanding shares generally that is effected without receipt of consideration
by the Company, occurring after the effective date of the Stock Plan, the
number and kinds of shares for which options may be granted under the Stock
Plan shall be adjusted proportionately and accordingly by the Compensation
Committee.

Except as provided in the next paragraph, in the event of a merger or other
reorganization pursuant to which the Company is the surviving company, any
option previously granted pursuant to the Stock Plan shall be proportionately
adjusted, and the exercise price will be adjusted such that the aggregate
option price will be the same as the aggregate option price of the shares
subject to the option immediately prior to such reorganization, merger or
consolidation.

Upon the dissolution or liquidation of the Company, or upon a merger, or
reorganization (whether or not the Company is the surviving company) or sale
of substantially all of the assets of the Company to another company in any
transaction not approved by the Board of Directors which results in any person
or entity owning twenty-five percent or more of the combined voting power of
all classes of the Company's stock, the Stock Plan and options thereunder
shall terminate, except to the extent that provision is made in writing in
connection with such transaction for the continuation of the Stock Plan and/or
the assumption of the options granted under the Stock Plan. In the event of
any such termination of the Stock Plan, each individual holding an option
shall have the right immediately prior to such termination, as the
Compensation Committee in its sole discretion shall determine and designate,
to exercise such option in whole or in part, whether or not such option was
exercisable at the time such termination occurs.

18
<PAGE>

Certain Federal Income Tax Consequences of Options Under the Stock Plan

Neither the optionee nor the Company will incur any federal tax consequences
as a result of the grant of an option. The optionee will have no taxable
income upon exercising an ISO (except the alternative minimum tax may apply),
and the Company will receive no deduction when an ISO is exercised. Upon
exercising a NSO, the optionee generally must recognize ordinary income equal
to the "spread" between the exercise price and the fair market value of Common
Stock on the date of exercise; the Company will be entitled to a deduction for
the same amount. In the case of an employee, the option spread at the time a
NSO is exercised is subject to income tax withholding, but the optionee
generally may elect to satisfy the withholding tax obligation by having shares
of Common Stock withheld from those purchased under the NSO. The tax treatment
of a disposition of option shares acquired under the Stock Plan depends on how
long the shares have been held and on whether such shares were acquired by
exercising an ISO or by exercising a NSO. The Company will not be entitled to
a deduction in connection with a disposition of option shares, except in the
case of a disposition of shares acquired under an ISO before the applicable
ISO holding periods have been satisfied.

The above description of tax consequences is based upon federal tax laws and
regulations and does not purport to be a complete description of the federal
income tax aspects of the Stock Plan.

The Board of Directors recommends a vote "FOR" approval and adoption of the
Company's
1999 Employee Stock Option Plan.

PROPOSAL NO. 3

APPROVAL AND ADOPTION OF THE AMENDED AND RESTATED
ANNUAL MANAGEMENT BONUS PLAN

The following summary of the principal features of the Amended and Restated
Annual Management Bonus Plan (the "Plan") is qualified by reference to the
terms of the Plan, a copy of which is attached hereto as Appendix B.
Stockholders are urged to read the Plan in its entirety.

The Plan has been in operation since 1989. It is the bonus plan for most of
the senior officers of CB Richard Ellis, Inc. as well as the chairmen of the
Europe, Middle East and Africa, Asia Pacific and Latin American Regions. In
1998 for the first time two executive officers had the potential to have the
sum of their salary and bonus pursuant to the Plan exceed the $1,000,000
threshold of Internal Revenue Code Section 162(m). If that had occurred, any
amount in excess of $1,000,000 would have been non-deductible. The Company
believes that with stockholder approval the Plan will qualify as a performance
based plan so that bonuses paid to executive officers under the Plan will not
be subject to Section 162(m). Under the Plan each participant is given a
"reference point award," or RPA, which is the amount of bonus that will be
paid if the participant scores 100 per cent on each of three criteria. A
participant's RPA is generally 50% to 100% of his or her salary but can be a
higher or lower percentage. The first criteria involves the Company achieving
a level of consolidated earnings before taxes, amortization and depreciation
set each year by the Compensation Committee. For executive officers this
Company performance goal will generally be the major, if not the sole,
criteria for bonus. The second criteria involves meeting performance goals
with respect to a particular line of business for which the participant is
responsible. In the case of executive officers, these goals will be set by the
Compensation Committee. For other participants they will be set by the Chief
Executive Officer or his delegatee. The third criteria involves individual
goals for the participant. For executive officers these goals will generally
not apply, but if they do they will be set by the Compensation Committee. For
all other participants, individual goals will be set by the Chief Executive
Officer or his delegatee. The Plan may be amended at any time by the Board of
Directors. If the Plan is not approved by stockholders it will continue in
operation subject to the risk that some portion of the bonuses paid thereunder
will not be deductible.

The Board of Directors recommends a vote "FOR" approval and adoption of the
Amended and Restated Annual Management Bonus Plan.

19
<PAGE>

PROPOSAL NO. 4

RATIFICATION OF INDEPENDENT ACCOUNTANTS

The Board of Directors has appointed the firm of Arthur Andersen LLP,
Certified Public Accountants ("AA"), who examined the Company's consolidated
financial statements for calendar year 1998, as independent accountants to
examine the consolidated financial statements of the Company for calendar year
1999. The selection is being presented to the stockholders for ratification at
this meeting. If the stockholders do not ratify the employment of AA, the
selection of independent accountants will be reconsidered by the Board of
Directors. Representatives from the firm of AA will be present at the Annual
Meeting. They will be provided the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.

The Board of Directors recommends a vote "FOR" the ratification of Arthur
Andersen LLP as the Company's Independent Auditors

OTHER MATTERS

Management knows of no other business to be presented at the meeting. If
other matters do properly come before the meeting, persons acting pursuant to
the proxy will vote on them in their discretion.

STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

Proposals to be submitted for the 2000 Annual Meeting of Stockholders must
be received by the Company no later than December 1, 1999 in order that they
may be included in the Company's proxy statement and form of proxy relating to
that meeting.

A stockholder proposal not included in the Company's proxy statement for the
2000 Annual Meeting will be ineligible for presentation at the meeting unless
the stockholder gives timely notice of the proposal in writing to the
Secretary of the Company at the principal executive offices of the Company and
otherwise complies with the provisions of the Company's Bylaws. To be timely,
the Company's Bylaws provide that the Company must have received the
stockholder's notice not less than 50 days nor more than 75 days prior to the
scheduled date of such meeting. However, if notice or prior public disclosure
of the date of the annual meeting is given or made to stockholders less than
65 days prior to the meeting date, the Company must receive the stockholder's
notice by the earlier of (i) the close of business on the 15th day after the
earlier of the day the Company mailed notice of the annual meeting date or
provided such public disclosure of the meeting date and (ii) two days prior to
the scheduled date of the annual meeting.

Annual Report

The 1998 Annual Report to Stockholders, including consolidated financial
statements for the fiscal year ended December 31, 1998, which includes the
Company's annual report on Form 10-K (without exhibits thereto), has been
mailed with this Proxy Statement. The Company will provide copies of exhibits
to the Annual Report on Form 10-K, but will charge a reasonable fee per page
to any requesting stockholder. Stockholders may make such request in writing
to Investor Relations, 533 South Fremont Avenue, Los Angeles, California
90071-1712.

20
<PAGE>

Incorporation by Reference

To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any other filing by the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, the sections of this Proxy Statement entitled "Compensation Committee
Report on Executive Compensation" and "Stock Performance Graph" shall not be
deemed to be so incorporated, unless specifically otherwise provided in such
filing.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ James J. Didion
JAMES J. DIDION
Chairman of the Board

Los Angeles, California
March 31, 1999

21
<PAGE>

APPENDIX A

CB RICHARD ELLIS SERVICES, INC.
1999 EMPLOYEE STOCK OPTION PLAN

CB Richard Ellis Services, Inc., a Delaware corporation ("CBRE") sets forth
herein the terms of this CB Richard Ellis Services, Inc. 1999 Employee Stock
Option Plan (the "Plan") as follows:

1. Purpose

The Plan is intended to advance the interests of CBRE by providing Optionees
selected by the Committee pursuant to Section 7 with an opportunity to develop
a proprietary interest in CBRE, which will create strong performance
incentives for such Optionees to maximize the growth and success of CBRE and
its Subsidiaries, and will encourage them to remain in the employ or service
of CBRE or one or more of its Subsidiaries. An Option granted under the Plan
may be (i) an "incentive stock option" within the meaning of Section 422 of
the Code or (ii) an Option that is not an incentive stock option.

2. Definitions

"Board of Directors" means the Board of Directors of CBRE.

"CBRE" means CB Richard Ellis Services, Inc., a Delaware corporation.

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

"Committee" means the Compensation Committee of the Board of Directors of
CBRE.

"Eligible Employee" means any employee or independent contractor described
in Section 5 of the Plan as being eligible for the grant of an Option.

"Option" means an option to purchase Stock granted by the Committee pursuant
to the Plan.

"Option Agreement" means an agreement between CBRE and an Optionee which
reflects the terms of the Option granted to the Optionee and conforms to the
provisions of Section 10 of the Plan.

"Optionee" means an Eligible Employee to whom the Committee has granted an
Option.

"Option Price" means the price determined pursuant to Section 11.

"Plan" means the CB Richard Ellis Services, Inc. 1999 Employee Stock Option
Plan as set forth herein.

"Stock" means shares of Common Stock of CBRE, par value $0.01 per share.

"Subsidiary" means any entity which is treated as a subsidiary of CBRE
pursuant to Section 422(d)(1) of the Code.

3. Administration

(a) Compensation Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of CBRE (the "Committee"),
which shall have the full power and authority to take all actions, and to make
all determinations required or provided for under the Plan or any Option
granted or Option Agreement entered into hereunder, and all such other actions
and determinations not inconsistent with the specific terms and provisions of
the Plan deemed by the Committee to be necessary or appropriate to the
administration of the Plan or any Option granted or Option Agreement entered
into hereunder. The interpretation and construction by the Committee of any
provision of the Plan or of any Option granted or Option Agreement entered
into hereunder shall be final and conclusive.

A-1
<PAGE>

(b) No Liability. No member of the Committee shall be liable for and CBRE
shall indemnify and hold each such member harmless with respect to any action
or determination made in good faith with respect to the Plan or any Option
granted or Option Agreement entered into hereunder.

(c) Action by the Board. The Board of Directors may act under the Plan other
than through the Committee, only if all of the members of the Board are "non-
employee directors" as defined in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934.

4. Stock

The shares of Stock issued pursuant to Options granted under the Plan may be
treasury shares or authorized but unissued shares. The number of shares of
Stock that may be issued pursuant to the exercise of Options granted under the
Plan shall not exceed in the aggregate 1,000,000 shares, which number of
shares is subject to adjustment as hereinafter provided in Section 18. If any
Option expires or terminates, for any reason prior to exercise in full, the
shares of Stock that were subject to the unexercised portion of such Option
shall be available for the grant of future Options under the Plan.

5. Eligibility

Options may be granted under the Plan to any employee or independent
contractor (including a director) of CBRE or a Subsidiary.

6. Effective Date and Term of the Plan

(a) Effective Date. The effective date of the Plan shall be the date the
Plan is approved by the holders of a majority of the shares of Common Stock
voting at a duly held meeting of the stockholders of CBRE.

(b) Term. No Options maybe granted under the Plan more than 10 years after
its effective date.

7. Grant of Options

Subject to the terms and conditions of the Plan, the Committee may, at any
time and from time to time, prior to the date of the Plan's expiration or
termination, grant Options in its sole and absolute discretion to any Eligible
Employee selected in writing by the Committee, on such terms and conditions as
the Committee may determine, including any terms or conditions which may be
necessary and appropriate to qualify such Options as "incentive stock options"
under Section 422 of the Code provided that no Eligible Employee may be
selected as an Optionee who is not identified as a key employee by CBRE's
Chief Executive Officer. The date on which the Committee approves the grant of
an Option shall be considered the date on which such Option is granted unless
the Committee determines otherwise provided the Optionee executes an option
agreement in the form approved by the Committee within 90 days after notice of
the grant. Options may be granted but not exercised prior to stockholder
approval and in the event stockholder approval is not obtained on or before
June 30, 1999, all such options shall be null and void.

8. Limitation on Grant of Options

No Option may be granted under this Plan to the extent such grant would
cause the total number of shares of Stock subject to stock options granted by
CBRE (excluding only stock options granted pursuant to the 1998 Stock Purchase
Plan) pursuant to compensatory stock option plans to exceed 15 percent of the
outstanding shares of Stock of CBRE.

9. Limitations on Incentive Stock Options

An Option may, if so determined by the Committee, constitute an incentive
stock option to the extent that the aggregate fair market value (determined at
the time the option is granted) of the Stock with respect to which

A-2
<PAGE>

incentive stock options are exercisable for the first time by any Optionee
during any calendar year (under the Plan and all other stock option plans of
CBRE or any Subsidiary) does not exceed $100,000.

10. Option Agreements

All Options granted pursuant to the Plan shall be evidenced by written
agreements ("Option Agreements"), to be executed by CBRE and by the Optionee,
in such form or forms and with such terms as the Committee shall from time to
time determine. Option Agreements covering Options granted from time to time
or at the same time need not contain similar provisions; provided however,
that no Option Agreements shall be inconsistent with any term of this Plan.

11. Option Price

The purchase price of each share of Stock subject to an Option (the "Option
Price") shall be its fair market value on the date the Option is granted. In
the event that the Stock is listed on an established national or regional
stock exchange, is admitted to quotation on The Nasdaq Stock Market, or is
publicly traded in an established securities market, in determining the fair
market value of the Stock, the Committee shall use: the closing price of the
Stock on such exchange or System or in such market (the highest such closing
price if there is more than one such exchange or market) on the trading date
when the Option is granted; or, if there is no such closing price, then the
Committee shall use the mean between the highest bid and lowest asked prices
or between the high and low prices on such date; or, if no sale of the Stock
has been made on such day, on the next preceding day on which any such sale
shall have been made; or such other method as the Committee may determine.

12. Term and Exercise of Options

(a) Term. Each Option granted under the Plan shall terminate and all rights
to purchase shares thereunder shall cease upon a date fixed by the Committee
and stated in the Option Agreement. All options granted under the Plan shall
terminate no later than ten (10) years from the date of grant.

(b) Option Period and Limitations on Exercise. Each Option shall be
exercisable, in whole or in part, at any time and from time to time during the
term of the Option, at such times, and with such conditions, as the Committee
shall determine and set forth in the related Option Agreement. Without
limiting the foregoing, the Committee, subject to the terms and conditions of
the Plan, may in its sole discretion provide that an Option may not be
exercised in whole or in part for any period or periods of time during which
such Option is outstanding; provided, however, that any such time limitation
on the exercise of an Option contained in any Option Agreement may be
rescinded, modified or waived by the Committee, in its sole discretion, at any
time and from time to time after the date of grant of such Option.

(c) Method of Exercise and Payment. An Option may be exercised under such
rules as the Committee may establish from time-to-time by delivery to CBRE of
a written notice of exercise on any business day, at the location specified
from time-to-time by CBRE, which notice shall specify the number of shares
with respect to which the Option is being exercised, and shall be accompanied
by payment in full of the Option Price of the shares for which the Option is
being exercised. The minimum number of shares of Stock with respect to which
an Option may be exercised at any time shall be the lesser of 100 shares or
the maximum number of shares available for purchase under the Option at the
time of exercise. Payment of the Option Price for the shares of Stock
purchased pursuant to the exercise of an Option shall be made (i) by cashier's
check drawn on a major national bank or a wire transfer; (ii) with the consent
of the Committee, through the tender to CBRE of shares of Stock, which shares
shall be valued, for purposes of determining the extent to which the Option
Price has been paid thereby, at their fair market value (determined by the
Committee in the manner described in Section 11 above) on the date of
exercise; (iii) with the consent of the Committee, by delivery of a full
recourse promissory note on terms satisfactory to the Committee; or (iv) by a
combination of the methods described in (i), (ii) and (iii). If shares of
Stock are surrendered by an officer of CBRE who is subject to Section 16(b) of
the Securities Exchange Act of 1934 as payment of the Option Price and the
Stock surrendered was acquired pursuant to an

A-3
<PAGE>

option to acquire CBRE common stock and such acquisition was not an exempt
transaction under Section 16 of the Securities Exchange Act of 1934, then six
(6) months must have elapsed since the date of grant of such option. The
payment in full of the Option Price shall be deemed to have been made with the
written notice of exercise provided the notice of exercise directs that the
stock certificate or certificates for the shares of Stock for which the Option
is exercised be delivered to a licensed broker acceptable to CBRE as the agent
for the individual exercising the Option and, at the time such stock
certificate or certificates are delivered, the broker tenders to CBRE cash (or
cash equivalents acceptable to CBRE) equal to the Option Price for the shares
of Stock purchased plus the amount (if any) of federal and/or other taxes
which CBRE in its discretion, requires to be withheld with respect to the
exercise of the Option. An attempt to exercise any Option granted hereunder
other than as set forth above shall be invalid and of no force and effect.
Promptly after the exercise of an Option and the payment or deemed payment in
full of the Option Price therefor and any applicable withholding taxes, the
individual exercising the Option shall be entitled to the issuance of a Stock
certificate or certificates evidencing his or her ownership of such shares. A
separate Stock certificate or certificates shall be issued for any shares
purchased pursuant to the exercise of an Option which is an incentive stock
option, which certificate or certificates shall not include any shares which
were purchased pursuant to the exercise of an Option which is not an incentive
stock option. An individual holding or exercising an Option shall have none of
the rights of a stockholder until the shares of Stock covered thereby are
fully paid and issued, and except as provided in Section 19 below, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the date of such issuance.

(d) Withholding Taxes. CBRE (or a Subsidiary) shall have the right, as a
condition to the exercise of any Option, to withhold from any amount payable
to the Optionee, or require the Optionee to remit to CBRE (or a Subsidiary) an
amount (in the form of a cashier's check or wire transfer) sufficient to
satisfy any federal, state, local or foreign withholding tax requirements
imposed with respect to the exercise of the Option or the issuance of shares
of Stock pursuant to the option as determined by the Committee in its
discretion.

13. Transferability of Options

During the lifetime of an Optionee, only such Optionee (or, in the event of
legal incapacity or incompetency, the Optionee's guardian or legal
representative) may exercise the Option. No Option shall be assignable or
transferable by the Optionee to whom it is granted, other than by will, the
laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined in Section 414 of the Code, and no Option shall be
pledged or hypothecated (by operation of law or otherwise), or subject to
execution, attachment or similar process.

14. Termination of Service or Employment

If an Optionee ceases to be an employee or independent contractor of CBRE or
any Subsidiary for any reason other than death or "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code), any Option
granted to such Optionee pursuant to the Plan shall terminate 30 days after
the date of such cessation unless earlier terminated pursuant to Section 12(a)
above, and such Optionee shall have no further right to purchase shares of
Stock pursuant to such Option; provided, however, that the Committee may
provide, by inclusion of appropriate language in any Option Agreement, that an
Optionee may (subject to the general limitations on exercise set forth in
Section 12(b)), in the event he or she ceases to be an employee or independent
contractor, exercise an Option, in whole or in part, at a time subsequent to
such cessation and prior to termination of the Option as provided in Section
12(a) above, either subject to or without regard to any installment limitation
on exercise imposed pursuant to Section 12(b) above. Whether a leave of
absence or leave on military or government service shall cause an Optionee to
cease to be an employee or independent contractor shall be determined by the
Committee, which determination shall be final and conclusive. For purposes of
the Plan, an Optionee shall not cease to be an employee or independent
contractor if his or her employment or service terminates, but the Optionee is
immediately thereafter employed by CBRE or a Subsidiary as an employee or
independent contractor.

A-4
<PAGE>

15. Rights in the Event of Death or Disability

(a) Death. If the Optionee dies while employed by or in the service of CBRE
or a Subsidiary, except as is otherwise provided in the Option Agreement
relating to such Option, the executors, administrators, heirs, legatees or
distributees (as applicable) of such Optionee's estate shall have the right
(subject to the general limitations on exercise set forth in Section 12(b)
above), prior to termination of the Option as provided in Section 12(a) above,
to exercise any Option held by such Optionee at the date of such Optionee's
death to the extent the Option was exercisable on such date, on such terms as
the Committee may provide in the Option Agreement.

(b) Disability. If the Optionee ceases to be an employee or independent
contractor of CBRE or its Subsidiaries by reason of "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code), then such
Optionee shall have the right (subject to the general limitations on exercise
set forth in Section 12(b) above), within the earlier of (i) one year after
such cessation, or (ii) the termination of the Option as provided in Section
12(a) above, to exercise, in whole or in part, any Option held by such
Optionee at the date of such cessation to the extent the Option was
exercisable on such date on such terms as the Committee may provide in the
Option Agreement, provided, however, that the Committee may provide, by
inclusion of appropriate language in the Option Agreement, that the Optionee
may (subject to the general limitations on exercise set forth in Section 12(b)
above), in the event he or she ceases to be an employee or independent
contractor by reason of "permanent and total disability" (within the meaning
of Section 22(e)(3) of the Code), exercise an Option, in whole or in part, at
any time subsequent to such termination and prior to termination of the Option
as provided in Section 12(a) above, either subject to or without regard to any
installment limitation on exercise imposed pursuant to Section 12(b) above.
Whether an Optionee has suffered "permanent and total disability" for purposes
of this Plan shall be determined by the Committee, which determination shall
be final and conclusive.

16. Use of Proceeds

The proceeds received by CBRE from the sale of Stock pursuant to Options
granted under the Plan shall constitute general funds of CBRE.

17. Requirements of Law

(a) Violations of Law. CBRE shall not be required to sell or issue any
shares of Stock under any Option if the sale or issuance of such shares would
constitute a violation by the individual exercising the Option or CBRE of any
provisions of any law or regulation of any governmental authority including
without limitation any federal or state securities laws or regulations.
Specifically in connection with the Securities Act of 1933 (as now in effect
or as hereafter amended), upon exercise of any Option, unless a registration
statement under such Act is in effect with respect to the shares of Stock
covered by such Option, CBRE shall not be required to sell or issue such
Shares unless the Committee has received evidence satisfactory to it that the
holder of such Option may acquire such shares pursuant to an exemption from
registration under such Act. Any determination in this connection by the
Committee shall be final, binding, and conclusive. CBRE may, but shall in no
event be obligated to, register any securities covered hereby pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended). CBRE shall
not be obligated to take any affirmative action in order to cause the exercise
of an Option or the issuance of shares pursuant thereto to comply with any law
or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable
unless and until the shares of stock covered by such Option are registered or
are subject to an available exemption from registration, the exercise of such
Option (under circumstances in which the laws of such jurisdiction apply)
shall be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.

(b) Compliance with Rule 16b-3. The Plan is intended to comply with Rule
16b-3 or its successor rule, promulgated under the Securities Exchange Act of
1934. With respect to persons subject to Section 16 of the Securities Exchange
Act of 1934, any provision of the Plan or action of the Committee that is
inconsistent with such Rule shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.

A-5
<PAGE>

18. Amendment and Termination of the Plan

The Board or the Committee may, at any time and from time to time, amend,
suspend or terminate the Plan as to any shares of Stock as to which Options
have not been granted. The foregoing notwithstanding no amendment shall,
without the approval of the stockholders of CBRE, (a) materially change the
requirements as to the eligibility to receive options, (b) increase the
maximum number of shares subject to the Plan (except as provided in Section
l9), (c) change the minimum Option Price (except as provided in Section 19),
(d) increase the maximum period during which options may be exercised, (e)
extend the term of the Plan, or (f) materially increase the benefits accruing
to any Optionee under the Plan. Except as permitted under Section 19 hereof,
no amendment, suspension or termination of the Plan shall, without the consent
of the holder of the Option, materially alter or materially impair rights or
obligations under any Option theretofore granted under the Plan.

19. Effect of Changes in Capitalization

(a) Changes in Stock. If the outstanding shares of Stock are increased or
decreased or changed into or exchanged for a different number or kind of
shares or other securities of CBRE by reason of any recapitalization,
reclassification, stock split-up, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or other
increase affecting such outstanding shares generally that is effected without
receipt of consideration by CBRE, occurring after the effective date of the
Plan, the number and kinds of shares for the purchase of which Options may be
granted under the Plan shall be adjusted proportionately and accordingly by
the Committee. In addition, the number and kind of shares for which Options
are outstanding shall be adjusted proportionately and accordingly so that the
proportionate ownership interest of the holder of the Option immediately
following such event shall, to the extent practicable, be the same as
immediately prior to such event. Any such adjustment in outstanding Options
shall not change the aggregate Option Price payable with respect to shares
subject to the unexercised portion of the Option outstanding but shall include
a corresponding proportionate adjustment in the Option Price per share. If
there is a distribution payable in the capital stock of a Subsidiary ("Spin-
off Shares"), to the extent consistent with Treasury Regulation Section 1.425-
1(a)(6) or the corresponding provision of any subsequent regulation, each
outstanding Option shall thereafter additionally pertain to the number of
Spin-off Shares which would have been received if the Optionee had been the
holder on the distribution date of the number of shares that are subject to
the Option at the time of such distribution, and the aggregate Option Price of
the Option shall be allocated between the Spin-off Shares and the Stock in
proportion to the relative fair market values of a Spin-off Share and a share
of Stock immediately after the distribution of Spin-off Shares.

(b) Reorganization in Which CBRE Is the Surviving Company. Subject to
Section 19(c), if CBRE shall be the surviving company in any reorganization,
merger, or consolidation of CBRE with one or more other companies, any Option
theretofore granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to such
Option would have been entitled immediately following such reorganization,
merger, or consolidation, with a corresponding proportionate adjustment of the
Option Price per share so that the aggregate Option Price thereafter shall be
the same as the aggregate Option Price of the shares subject to the Option
immediately prior to such reorganization, merger, or consolidation.

(c) Dissolution; Reorganization Not Approved by the Board. Upon the
dissolution or liquidation of CBRE, or upon a merger, consolidation or
reorganization of CBRE with one or more other companies in which CBRE is not
the surviving corporation or upon a sale of substantially all of the assets of
CBRE to another company or upon any transaction (including, without
limitation, a merger or reorganization in which CBRE is the surviving company)
not approved by the Board of Directors which results in any person or entity
owning twenty-five percent (25%) or more of the combined voting power of all
classes of stock of CBRE, the Plan and all Options outstanding hereunder shall
terminate, except to the extent provision is made in writing in connection
with such transaction for the continuation of the Plan and/or the assumption
of the Options theretofore granted, or for the substitution for such Options
of new options covering the stock of a successor company, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kinds of
shares and exercise prices, in which event the Plan and Options theretofore
granted shall continue in the manner and under the terms so provided. In the
event of any such termination of the Plan, each individual holding an Option
shall have the

A-6
<PAGE>

right immediately prior to the occurrence of such termination and during such
period occurring prior to such termination as the Committee in its sole
discretion shall determine and designate, to exercise such Option in whole or
in part, whether or not such Option was otherwise exercisable at the time such
termination occurs and without regard to any installment limitation on
exercise imposed pursuant to Section l2(b) above. The Committee shall send
written notice of an event that will result in such a termination to all
individuals who hold Options not later than the time at which CBRE gives
notice thereof to its stockholders.

(d) Adjustments. Adjustments under this Section 19 related to stock or
securities of CBRE, shall be made by the Committee, whose determination in
that respect shall be final, binding, and conclusive. No fractional shares of
Stock or units of other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or
unit.

(e) No Limitations on CBRE. The grant of an Option pursuant to the Plan
shall not affect or limit in any way the right or power of CBRE to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.

20. Disclaimer of Rights

No provision in the Plan or in any Option granted or Option Agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ or service of CBRE or any
Subsidiary, or to interfere in any way with the right and authority of any
Subsidiary either to increase or decrease the compensation of any individual
at any time, or to terminate any employment or other relations between any
individual and CBRE or any Subsidiary with or without cause and with or
without due process.

21. Non-Exclusivity of the Plan

The adoption of the Plan shall not be construed as creating any limitations
upon the right and authority of the Committee to adopt such other incentive
compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Committee in its discretion determines
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan.

22. Governing the Law

The validity, interpretation and effect of this Plan, and the rights of all
persons hereunder, shall be governed by and determined in accordance with the
laws of Delaware, other than the choice of law rules thereof.

23. Gender and Number

Except as otherwise indicated by the context, words in the masculine gender
when used in this Plan shall include the feminine gender, the singular shall
include the plural, and the plural shall include the singular.

24. Headings

The headings herein are for convenience only and shall not be used in
interpreting the Plan.

IN WITNESS WHEREOF, CB Richard Ellis Services, Inc. has caused this Plan to
be adopted this day of , 1999.

By: _________________________________

Name: _______________________________
Chief Executive Officer

A-7
<PAGE>

APPENDIX B

AMENDED AND RESTATED
CB RICHARD ELLIS ANNUAL MANAGEMENT BONUS PLAN
EFFECTIVE JANUARY 1, 1999

1. REWARDS FOR COMPANY PRODUCTIVITY

The CB Richard Ellis Annual Management Bonus Plan (the "Plan") was amended
and restated effective January 1, 1999 to read as set forth herein. The Plan
has been designed to reward and stimulate Participant effort toward successful
attainment of the CBRE Group's goals by directly tying the Participant's
compensation to CBRE Group and individual results achieved. The "CBRE Group"
consists of those entities which are directly or indirectly controlled by or
in control of or under common control with CB Richard Ellis Services, Inc.
CB Richard Ellis, Inc. administers the plan for the CBRE Group.

2. WHO IS ELIGIBLE?

Participants in the Plan will be selected by the Chief Executive Officer of
CB Richard Ellis Services, Inc. or his delegatee (the "CEO") except that the
Compensation Committee of the Board of Directors (the "Compensation
Committee") will select which, if any, executive officers for purposes of the
Securities Exchange Act of 1934, will participate. Eligibility for
participation will be limited to those employees of the CBRE Group whose
position affords the opportunity to materially affect the CBRE Group's overall
profitability. Participation begins on the first day of the month following
selection as a Participant.

3. HOW THE PLAN WORKS

A Participant is eligible for a bonus each year, based on the weighting of
three factors: (1) the consolidated "Earnings Before Taxes, Depreciation and
Amortization" or "EBTDA" of CB Richard Ellis Services, Inc., (2) performance
of the Participant's line of business or operating unit, and (3) the
Participant's individual performance.

The following is a general overview of the Plan:

a. In the beginning of each calendar year (or such other date as
participation commences), each Participant receives a Reference Point Award
(RPA). The RPA is the target bonus amount which is annually established based
on a Participant's position and the position's potential contribution to the
CBRE Group. For executive officers the RPA will be established by the
Compensation Committee of the Board of Directors.

b. EBTDA targets for the CBRE Group performance targets for each line of
business, and individual performance priorities are established at the
beginning of a calendar year (or such other date as participation commences)
for each Participant in order to measure his or her performance at the end of
a year. Each of the three factors (consolidated EBTDA, line of business
performance and personal performance) is weighted based on the Participant's
position with the total of the weightings equaling 100%. For example, for a
senior corporate executive in charge of a line of business the weighting might
be 40% CBRE Group performance, 40% line of business performance and 20%
individual performance. For executive officers all targets will be set by the
Compensation Committee of the Board of Directors. The Compensation Committee
sets the EBTDA targets for all Participants.

c. At the end of the calendar year each of the three factors is calculated
as follows:

(i) CB Richard Ellis Services, Inc. performance is measured against the
consolidated EBTDA target set by the Board's Compensation Committee at the
start of the year, with the factor established as follows:

<TABLE>
<CAPTION>
Factor Example
------ -------
<S> <C> <C>
0-70% of target.............. 0 = 0% factor
70%-100% of target.......... 0%-100% pro rata 90% of target = 67% factor
100%-200% of target.......... 100%-300% pro rata 120% of target = 140% factor
</TABLE>

B-1
<PAGE>

(ii) Line of business performance is measured against the target set by
the Chief Executive Officer (by the Compensation Committee in the case of
executive officers) at the start of the year with the same adjustments as
set out in 3(c) above.

(iii) Personal performance is measured against the written objectives
established at the start of the year by the CEO for everyone except
executive officers and by the Compensation Committee for executive
officers. This factor is capped at 100%.

d. The actual bonus payment is determined by multiplying each performance
factor, as adjusted in Section 3(c)(i) above, by the percentage weighting
assigned to it for the individual involved and then adding the three
percentages together. The total percentage is then multiplied by the
individual's RPA to get the bonus payable for the year.

Total bonuses are limited to 25% of CB Richard Ellis Services, Inc.'s
consolidated pre-tax, pre-bonus profitability after taking account of such
other senior management incentive payments as may be determined by the CEO. If
the total bonuses and incentives estimated to be paid are greater than 25%,
then bonuses will be adjusted as determined by the CEO (by the Compensation
Committee in the case of executive officers) so that actual bonuses paid meet
the 25% limit.

4. LINE OF BUSINESS PERFORMANCE

Line of business performance goals will vary with the nature of the business
and the objectives of the CBRE Group with respect to that business.

5. INDIVIDUAL PERFORMANCE PRIORITIES

Performance priorities for each individual will be established annually and
reviewed periodically. These will express important CBRE Group objectives in
each Participant's area of responsibility and will take into account such
considerations as the difficulty of achieving the task and the potential for
significantly exceeding or falling short of the performance priority due to
economic conditions. Individual performance priorities will be established so
that 100% achievement would be a truly outstanding performance which, while
potentially achievable, represents an appreciable challenge.

Each Participant will have a minimum of three and a maximum of six personal
performance priorities. The performance priorities will be in writing and each
will be individually weighted through agreement with the individual's manager
subject to approval by the CEO (by the Compensation Committee in the case of
executive officers).

At the end of the year, the extent to which the Participant has met his/her
individual performance priorities will be determined by the CEO or, in the
case of executive officers, the Compensation Committee. The result will be
utilized as one of the factors for determining the amount of bonus earned.
Achievement ratings on individual Performance Priorities may range from zero
to 100%.

B-2
<PAGE>

6. BONUS DETERMINATION PROCESS

The actual bonus payment earned by a Participant will be determined by
formula as described below:

Example:

<TABLE>
<S> <C> <C>
Assume: RPA = $50,000 Factor Weighting: Company = 10%
L.O.B. = 50%
Individual Performance Priority = 40%
Company EBTDA target = $150 mill
Actual = $155 mill or 103%
L.O.B. target = $15 mill
Actual = $14 mill or 93%
Individual Performance Priorities actual = 90%
Calculations:
<CAPTION>
Company Target Factor
-------------- ------
<S> <C> <C>
(100% to 200% Adj. Factor)
$155 mill = 3% X 2 = 6%. 106% X 10% = 10.6%
$150 mill
<CAPTION>
L.O.B. Target
-------------
<S> <C> <C>
(70% to 100% Adj. Factor) (weight)
$14 mill = .93-.70 = .23 X 3.3 = .77 X 50% = 38.5%
$15 mill
<CAPTION>
Individual Target
-----------------
<S> <C> <C>
(weight)
.90 X .40 = 36.0%
-----
RAP Adjustment = 85.1%
Bonus = $50,000 X 85.1% = $42,550
</TABLE>

7. CEO AWARDS

Additionally, exceptional achievement by a Participant may be rewarded with
a supplemental discretionary award, referred to as a "CEO Award." Such awards
may be authorized by the CEO in cases of exceptional and exceedingly deserving
circumstances. These supplemental awards will generally be made to recognize a
unique contribution to improved profitability (present or future) of the
Company. In any particular year, CEO Awards may, or may not, be granted
depending upon actual occurrences and the judgement of the CEO.

The CEO's Awards will not exceed $40,000 for any single individual or more
than an aggregate of $750,000 in any year for all Participants. Executive
officers are not eligible for CEO awards.

8. HOW BONUSES ARE PAID

It is CB Richard Ellis' intent that all bonuses earned will be paid in cash.
However, CB Richard Ellis reserves the right to distribute common stock in CB
Richard Ellis Services, Inc. or other non-cash forms of compensation in lieu
of cash in the event economic circumstances dictate such action. Subject to
management's final approval of bonus awards, bonuses will be distributed after
the end of the fiscal year and the completion of the Company's audit, usually
in late February. Federal and state income taxes and other required taxes will
be deducted from bonuses.

B-3
<PAGE>

9. EMPLOYEE TRANSFERS

If an employee transfers to a new position, he or she is eligible for a
bonus as follows:

. If the transfer is to a position that is not currently eligible for
participation in the Plan, the Participant will receive a prorated bonus
based on the number of full calendar months worked in the eligible
position.

. If the transfer (which could be in the form of a promotion) is to another
position which is eligible for the Executive Bonus Plan, the Participant
will receive a prorated bonus for each position based on the number of
full months worked in each position, and his or her ratings for each
position.

10. IF EMPLOYMENT STATUS CHANGES

If employment terminates during the year, eligibility for a bonus will
depend on the reason for the termination:

(a) General. If the termination is for any reason other than total and
permanent disability, retirement or death all rights to a bonus are forfeited
without regard to whether the Participant quits or is terminated with or
without cause.

(b) Retirement. If an employee retires at age 55 or older with at least 15
years of service with the CBRE Group or at age 65 or older regardless of years
of service and has participated in the Plan for at least six months of the
year, the bonus will be prorated based on the number of full months of
participation in the Plan. The prorated bonus will be paid at the time bonuses
are paid to all Participants. If participation in the Plan is for less than
six months during the year of retirement, the Participant is not eligible for
a bonus for that year.

(c) Death or total disability If a Participant dies during a year or is
totally and permanently disabled as defined in the CB Richard Ellis, Inc. Long
Term Disability Plan, the bonus will be prorated based on the number of full
months of participation in the Plan. The prorated bonus will be paid at the
time bonuses are paid to all Participants. In the case of death, payment will
be made to the beneficiary designated for group term life insurance or if
there is no such beneficiary to the Participant's estate.

11. AMENDMENT, TERMINATION AND INTERPRETATION

CB Richard Ellis Services, Inc. reserves the right at any time prior to
payment of the awards to review, interpret, alter, amend, or terminate
(discontinue) the Amended and Restated Annual Management Bonus Plan,
including, without limitation, the calculation and method of and eligibility
for award payments. This Plan does not constitute a contract of employment
(express or implied) or any other form of contract and cannot be relied upon
as such. This Plan does not alter the right of any member of the CBRE Group to
terminate an employee's employment with or without cause and regardless of due
process. The CEO's decision with respect to the interpretation of the Plan and
its application to any individual shall be conclusive and binding on all
persons involved, except that all such decisions with respect to executive
officers shall be made by the Compensation Committee.

12. MISCELLANEOUS

(a) Governing Law. The Plan and each option granted hereunder shall be
subject to and construed under the laws of the State of Delaware as though all
parties were residents of Delaware.

(b) Arbitration. Any and all disputes with respect to the Plan or any Option
granted hereunder shall be resolved by arbitration in Los Angeles, California
under the Commercial Arbitration Rules of the American Arbitration Association
using a single arbitrator. The arbitrator's award shall be conclusive, final
and binding with respect to the parties thereto. The fees of the arbitrator
shall be borne by CBRE and each party shall bear its own costs including
attorney fees.

B-4
<PAGE>

CB RICHARD ELLIS SERVICES, INC.
Common Stock Proxy

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints James J. Didion and Walter V. Stafford as
proxies (each with the power to appoint his substitute and with power to act
alone) of the undersigned to vote all the shares of Common Stock of CB Richard
Ellis Services, Inc. (the "Company") which the undersigned would be entitled to
vote as designated on the reverse side of the Annual meeting of Stockholders of
the Company, to be held on May 18, 1999, and any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS LISTED IN PROPOSAL 1 AND
FOR PROPOSALS 2,3,4 AND 5.

If you are a participant in the Capital Accumulation Plan this proxy
constitutes your authorization and direction to Vanguard Fiduciary Trust
Company, the trustee of the CAP Plan, to vote all shares held on your behalf
pursuant to the CAP Plan as specified herein. IF YOU FAIL TO PROVIDE
AUTHORIZATION AND DIRECTION THIS PROXY
WILL BE VOTED IN THE SAME PROPORTION
AS SHARES OF COMMON STOCK FOR WHICH
THE TRUSTEE DID RECEIVE DIRECTIONS CB RICHARD ELLIS SERVICES, INC.
FOR PROPOSALS 1,2,3,4 AND 5. P.O. BOX 11277
NEW YORK, N.Y. 10203-0277

(Continued, and to be dated and signed, on other side)

<PAGE>

PLEASE DETACH PROXY CARD HERE

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

[ ]
<S> <C> <C> <C>
1. To Elect Directors-Thirteen FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
listed below for all nominees listed below

Nominees: Stanton D. Anderson, Gary J. Beban, Richard C. Blum, James J. Didion, Bradford M. Freeman, Donald M. Koll, Paul C.
Leah, David R. Lind, Frederic V. Malek, Ray Elizabeth Ultenhove, Gary L. Wilson, W. Brett White, Raymond E. Wirta.
(INSTRUCTIONS: To withholding authority to vote for any individual nominee, mark the "Exceptions" box and write that nominee's
name in the space provided below).
*Exceptions___________________________________________________________________________________________________________

2. To approve and adopt the Company's 1999 Employee Stock Option Plan. 3. To approve and adopt the Amended and
Restated Annual Management Bonus Plan.

FOR [ ] AGAINST [ ] ABSTAIN [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To ratify the appointment of Arthur Andersen LLP as the Independent 5. To consider and act upon such other matters
Accountants for the Company. as may properly come before the meeting.

FOR [ ] AGAINST [ ] ABSTAIN [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ]

Change of Address and
or Comments Mark Here [ ]

Please sign exactly as name(s) appear on this proxy. If signing
for estates, trusts or corporations, your title and capacity
should be stated. If shares are held jointly, each holder should
sign.

Dated ____________________________________, 1999
________________________________________________
Signature
________________________________________________
Signature if held jointly

Votes must be indicated
PLEASE MAKE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. (x) in Black or Blue ink. [X]
</TABLE>

Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning it in the Enclosed Envelope