Exhibit 10.1

 

AMENDMENT NO. 3

TO

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

KITE REALTY GROUP, L.P.

 

This Amendment No. 3 to the Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P. (this “ Amendment ”) is made as of July 28, 2014 by Kite Realty Group Trust, a Maryland real estate investment trust, as sole general partner (the “ Company ”) of Kite Realty Group, L.P., a Delaware limited partnership (the “ Partnership ”), pursuant to the authority granted to the Company in the Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of August 16, 2004, as amended by Amendment No. 1, dated as of December 7, 2010, and as further amended by Amendment No. 2, dated as of March 12, 2012 (the “ Partnership Agreement ”), for the purpose of issuing additional Partnership Units in the form of LTIP Units.  Capitalized terms used and not defined herein shall have the meanings set forth in the Partnership Agreement.

 

WHEREAS, the Company and the Partnership desire to provide for equity incentives to certain persons who provide services to or for the benefit of the Partnership in the form of Partnership Units which shall be designated “LTIP Units”; and

 

WHEREAS, the Company and the Partnership desire to amend the Partnership Agreement, in accordance Section 4.2 of the Partnership Agreement, to issue the LTIP Units, having the designations, preferences and other rights as described herein.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Partnership Agreement is hereby amended as follows:

 

1.                                       Amendments to the Partnership Agreement .  The Company and the Partnership hereby amend the Partnership Agreement as follows:

 

A.                                     Article I of the Partnership Agreement is hereby amended to add the following definitions:

 

“ Adjustment Event ” has the meaning set forth in Section 4.6.A .

 

“ Aggregate Special LTIP Unit Distribution Amount ” has the meaning set forth in Section 5.1.F .

 

“ Capital Account Limitation ” has the meaning set forth in Section 4.7.B .

 

“ Class A Unit Economic Balance ” has the meaning set forth in Section 6.1.E .

 

“ Class A Unit Transaction ” has the meaning set forth in Section 4.7.F .

 

 

“ Constituent Person ” has the meaning set forth in Section 4.7.F .

 

“ Conversion Date ” has the meaning set forth in Section 4.7.B .

 

“ Conversion Notice ” has the meaning set forth in Section 4.7.B .

 

“ Conversion Right ” has the meaning set forth in Section 4.7.A .

 

“ Distribution Measurement Date ” has the meaning set forth in Section 5.1.F .

 

“ Distribution Payment Date ” has the meaning set forth in Section 5.1.E .

 

“ Distribution Participation Date ” means, with respect to LTIP Units, such date as may be specified in the Vesting Agreement or other documentation pursuant to which such LTIP Units are issued.

 

“ Economic Capital Account Balances ” has the meaning set forth in Section 6.1.E .

 

“ Equity Incentive Plan ” means any equity incentive or compensation plan hereafter adopted by the Partnership or the General Partner, including, without limitation, the Kite Realty Group Trust 2013 Equity Incentive Plan.

 

“ Forced Conversion ” has the meaning set forth in Section 4.7.C .

 

“ Forced Conversion Notice ” has the meaning set forth in Section 4.7.C .

 

“ Forced Redemption Amount ” has the meaning set forth in Section 8.6.F .

 

“ Forced Redemption Right ” has the meaning set forth in Section 8.6.F .

 

“ Liquidating Gains ” has the meaning set forth in Section 6.1.E .

 

“ Liquidating Losses ” has the meaning set forth in Section 6.1.E .

 

“ LTIP Distribution Amount ” has the meaning set forth in Section 5.1.E .

 

“ LTIP Unitholder ” means a Partner that holds LTIP Units.

 

“ LTIP Units ” means a Partnership Unit which is designated as an LTIP Unit and which has the rights, preferences and other privileges designated in Sections 4.6 and 4.7 and elsewhere in this Agreement in respect of holders of LTIP Units. The allocation of LTIP Units among the Partners shall be set forth on Exhibit A , as it may be amended or restated from time to time.

 

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“ LTIP Unit Sharing Percentage ” means, for an LTIP Unit, the percentage that is specified as the LTIP Unit Sharing Percentage in the Vesting Agreement or other documentation pursuant to which such LTIP Unit is issued or, if no such percentage is specified, 10%.

 

“ Notice of Forced Redemption ” means a Notice of Forced Redemption substantially in the form of Exhibit I.

 

“ Same Award ” has the meaning set forth in Section 5.1.F .

 

“ Special LTIP Unit Distribution ” has the meaning set forth in Section 5.1.F .

 

“ Specified Forced Redemption Date ” means the tenth Business Day after receipt by the holder of Class A Units of a Notice of Forced Redemption or such shorter period as the General Partner, in its sole and absolute discretion may determine; provided that, if the Shares are not Publicly Traded, the Specified Forced Redemption Date means the thirtieth Business Day after receipt by the holder of such Class A Units of a Notice of Forced Redemption.

 

“ Unvested LTIP Units ” has the meaning set forth in Section 4.6.C .

 

“ Vested LTIP Units ” has the meaning set forth in Section 4.6.C .

 

“ Vesting Agreement ” means each or any, as the context implies, agreement or instrument entered into by a holder of LTIP Units upon acceptance of an award of LTIP Units under an Equity Incentive Plan.

 

B.                                     The definition of “ Partnership Interest ” in Article I of the Partnership Agreement is hereby amended and restated in its entirety as follows:

 

“ Partnership Interest ” means a Limited Partnership Interest, a General Partnership Interest or LTIP Units and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units.

 

C.                                     Section 4.2.B of the Partnership Agreement is hereby amended and restated in its entirety as follows :

 

B.             Classes of Partnership Units .  From and after the date of the Agreement, the Partnership shall have three classes of Partnership Units entitled “Class A Units,” “Class B Units,” and “LTIP Units,” and such additional classes of Partnership Units as may be created by the General Partner pursuant to Section 4.2.A .  Class A Units, Class B Units, LTIP Units, or a class of Partnership Interests created pursuant to Section 4.2.A , at the election of the General Partner, in its sole and absolute discretion, may be issued to newly admitted Partners in exchange for the contribution by such Partners of cash, real

 

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estate partnership interests, stock, notes or other assets or consideration; provided , however , that any Partnership Unit that is not specifically designated by the General Partner as being of a particular class shall be deemed to be a Class A Unit.  Each Class B Unit shall be converted automatically into a corresponding series of Class A Unit on the day immediately following the Partnership Record Date for the Distribution Period in which such Class B Unit was issued, without the requirement for any action by the General Partner, the Partnership or the Partner holding the Class B Unit.  The terms of the LTIP Units shall be in accordance with Sections 4.6 and 4.7 .

 

D.                                     Article IV of the Partnership Agreement is hereby amended to add the following new Sections 4.6 and 4.7:

 

Section 4.6             LTIP Units

 

A.             Issuance of LTIP Units .  The General Partner may from time to time issue LTIP Units to Persons who provide services to the Partnership or the General Partner, for such consideration as the General Partner may determine to be appropriate, and admit such Persons as Limited Partners.  Subject to the following provisions of this Section 4.6 and the special provisions of Sections 4.7 , 5.1.E , 5.1.F , 5.1.G and 6.1.E , LTIP Units shall be treated as Class A Units, with all of the rights, privileges and obligations attendant thereto (or, if so designated by the General Partner in connection with the issuance thereof, as Class B Units for the quarter in which such LTIP Units are issued).  For purposes of computing the Partners’ Percentage Interests, holders of LTIP Units shall be treated as Class A Unit holders and LTIP Units shall be treated as Class A Units.  In particular, the Partnership shall maintain at all times a one-to-one correspondence between LTIP Units and Class A Units for conversion, distribution and other purposes, including, without limitation, complying with the following procedures.

 

If an Adjustment Event (as defined below) occurs, then the General Partner shall make a corresponding adjustment to the LTIP Units to maintain a one-for-one conversion and economic equivalence ratio between Class A Units and LTIP Units. The following shall be “ Adjustment Events ”: (A) the Partnership makes a distribution on all outstanding Class A Units in Partnership Units, (B) the Partnership subdivides the outstanding Class A Units into a greater number of units or combines the outstanding Class A Units into a smaller number of units, or (C) the Partnership issues any Partnership Units in exchange for its outstanding Class A Units by way of a reclassification or recapitalization of its Class A Units.  If more than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously.  For the avoidance of doubt, the following shall not be Adjustment Events: (x) the issuance of Partnership Units in a financing, reorganization, acquisition or other similar business Class A Unit Transaction, (y) the issuance of Partnership Units pursuant to any employee benefit or compensation plan or distribution reinvestment plan or (z) the issuance of any Partnership Units to the General Partner in respect of a capital contribution to the Partnership.  If the Partnership takes an action affecting the Class A Units other than actions specifically described above as

 

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“Adjustment Events” and in the opinion of the General Partner such action would require an adjustment to the LTIP Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the LTIP Units, to the extent permitted by law and by any Equity Incentive Plan, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances. If an adjustment is made to the LTIP Units, as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting forth such adjustment and a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error.  Promptly after filing of such certificate, the Partnership shall mail a notice to each LTIP Unitholder setting forth the adjustment to his or her LTIP Units and the effective date of such adjustment.

 

B.             Priority .  Subject to the provisions of this Section 4.6 and the special provisions of Sections 4.7 , 5.1.E, 5.1.F , and 5.1.G , the LTIP Units shall rank pari passu with the Class A Units and Class B Units as to the payment of regular and special periodic or other distributions and distribution of assets upon liquidation, dissolution or winding up.  As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Partnership Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Class A Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the LTIP Units.  Subject to the terms of any Vesting Agreement, an LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the same extent, and subject to the same restrictions as holders of Class A Units are entitled to transfer their Class A Units pursuant to Article XI.

 

C.             Special Provisions . LTIP Units shall be subject to the following special provisions:

 

(i)             Vesting Agreements .  LTIP Units may, in the sole discretion of the General Partner, be issued subject to vesting, forfeiture and additional restrictions on transfer pursuant to the terms of a Vesting Agreement.  The terms of any Vesting Agreement may be modified by the General Partner from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Vesting Agreement or by the Equity Incentive Plan, if applicable. LTIP Units that have vested under the terms of a Vesting Agreement are referred to as “ Vested LTIP Units ”; all other LTIP Units shall be treated as “ Unvested LTIP Units .”

 

(ii)            Forfeiture .  Unless otherwise specified in the Vesting Agreement, upon the occurrence of any event specified in a Vesting Agreement as resulting in either the right of the Partnership or the General Partner to repurchase LTIP Units at a specified purchase price or some other forfeiture of any LTIP Units, then if the Partnership or the General Partner exercises such right to repurchase or forfeiture in accordance with the applicable Vesting Agreement, the relevant LTIP Units shall immediately, and without any further action, be treated as

 

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cancelled and no longer outstanding for any purpose.  Unless otherwise specified in the Vesting Agreement, no consideration or other payment shall be due with respect to any LTIP Units that have been forfeited, other than any distributions declared with respect to a Partnership Record Date prior to the effective date of the forfeiture.  In connection with any repurchase or forfeiture of LTIP Units, the balance of the portion of the Capital Account of the LTIP Unitholder that is attributable to all of his or her LTIP Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by Section 6.1.E , calculated with respect to the LTIP Unitholder’s remaining LTIP Units, if any.

 

(iii)           Allocations .  LTIP Unitholders shall be entitled to certain special allocations of gain under Section 6.1.E .  LTIP Units shall be allocated Net Income and Net Loss, for any taxable year or portion of a taxable year occurring after such issuance and prior to the Distribution Participation Date for such LTIP Units, in amounts per LTIP Unit equal to the amounts allocated per Class A Unit for the same period multiplied by the LTIP Unit Sharing Percentage for such LTIP Units.  Commencing with the portion of the taxable year of the Partnership that begins on the Distribution Participation Date established for any LTIP Units, such LTIP Units shall be allocated Net Income and Net Loss in amounts per LTIP Unit equal to the amounts allocated per Class A Unit.  The allocations provided by the preceding sentence shall be subject to Section 6.1.B of the Agreement. The General Partner is authorized in its discretion to delay or accelerate the participation of the LTIP Units in allocations of Net Income and Net Loss, or to adjust the allocations made after the Distribution Participation Date, so that the ratio of (i) the total amount of Net Income or Net Loss allocated with respect to each LTIP Unit in the taxable year in which that LTIP Unit’s Distribution Participation Date falls, to (ii) the total amount distributed to that LTIP Unit with respect to such period, is equal to such ratio as computed for the Class A Units held by the General Partner.

 

(iv)             Redemption .  The Redemption Right provided to the holders of Class A Units under Section 8.6 shall not apply with respect to LTIP Units unless and until they are converted to Class A Units as provided in clause (v) below and Section 4.7 .

 

(v)            Conversion to Class A Units .  Vested LTIP Units are eligible to be converted into Class A Units in accordance with Section 4.7 .

 

D.             Voting .  LTIP Unitholders shall (a) have the same voting rights as the Limited Partners, with the LTIP Units voting as a single class with the Class A Units and having one vote per LTIP Unit; and (b) have the additional voting rights that are expressly set forth below.  So long as any LTIP Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of a majority of the LTIP Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to LTIP Units so as to materially

 

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and adversely affect any right, privilege or voting power of the LTIP Units or the LTIP Unitholders as such, unless such amendment, alteration, or repeal affects equally, ratably and proportionately the rights, privileges and voting powers of all of Class A Units (including the Class A Units held by the General Partner); but subject, in any event, to the following provisions:

 

(i)             With respect to any Class A Unit Transaction (as defined in Section 4.7.F ), so long as the LTIP Units are treated in accordance with Section 4.7.F , the consummation of such Class A Unit Transaction shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such; and

 

(ii)            Any creation or issuance of any Partnership Units or of any class or series of Partnership Interest in accordance with the terms of this Agreement, including, without limitation, additional Class A Units or LTIP Units, whether ranking senior to, junior to, or on a parity with the LTIP Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such.

 

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding LTIP Units shall have been converted into Class A Units.

 

Section 4.7             Conversion of LTIP Units

 

A.             Conversion Right .  An LTIP Unitholder shall have the right (the “ Conversion Right ”), at his or her option, at any time to convert all or a portion of his or her Vested LTIP Units into fully paid and non-assessable Class A Units; provided , however , that a holder may not exercise the Conversion Right for less than one thousand (1,000) Vested LTIP Units or, if such holder holds less than one thousand Vested LTIP Units, all of the Vested LTIP Units held by such holder.  LTIP Unitholders shall not have the right to convert Unvested LTIP Units into Class A Units until they become Vested LTIP Units; provided , however , that when an LTIP Unitholder is notified of the expected occurrence of an event that will cause his or her Unvested LTIP Units to become Vested LTIP Units, such LTIP Unitholder may give the Partnership a Conversion Notice conditioned upon and effective as of the time of vesting and such Conversion Notice, unless subsequently revoked by the LTIP Unitholder, shall be accepted by the Partnership subject to such condition.  The General Partner shall have the right at any time to cause a conversion of Vested LTIP Units into Class A Units, provided , however , that any Special LTIP Unit Distribution payable with respect to such Vested LTIP Units is paid prior to such conversion.  In all cases, the conversion of any LTIP Units into Class A Units shall be subject to the conditions and procedures set forth in this Section 4.7 .

 

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B.             Exercise by an LTIP Unitholder .  A holder of Vested LTIP Units may convert such LTIP Units into an equal number of fully paid and non-assessable Class A Units, giving effect to all adjustments (if any) made pursuant to Section 4.6 .  Notwithstanding the foregoing, in no event may a holder of Vested LTIP Units convert a number of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such Limited Partner, to the extent attributable to its ownership of LTIP Units, divided by (y) the Class A Unit Economic Balance, in each case as determined as of the effective date of conversion (the “ Capital Account Limitation ”).  In order to exercise his or her Conversion Right, an LTIP Unitholder shall deliver a notice (a “ Conversion Notice ”) in the form attached as Exhibit G to this Agreement to the Partnership (with a copy to the General Partner) not less than ten nor more than 60 days prior to a date (the “ Conversion Date ”) specified in such Conversion Notice; provided , however , that if the General Partner has not given to the LTIP Unitholders notice of a proposed or upcoming Class A Unit Transaction (as defined in Section 4.7.F ) at least 30 days prior to the effective date of such Class A Unit Transaction, then LTIP Unitholders shall have the right to deliver a Conversion Notice until the earlier of (x) the tenth day after such notice from the General Partner of a Class A Unit Transaction or (y) the third business day immediately preceding the effective date of such Class A Unit Transaction.  A Conversion Notice shall be provided in the manner provided in Section 15.1 .  Each LTIP Unitholder covenants and agrees with the Partnership that all Vested LTIP Units to be converted pursuant to this Section 4.7.B shall be free and clear of all liens and encumbrances.  Notwithstanding anything herein to the contrary, a holder of LTIP Units may deliver a Notice of Redemption pursuant to Section 8.6 relating to those Class A Units that will be issued to such holder upon conversion of such LTIP Units into Class A Units in advance of the Conversion Date; provided , however , that the redemption of such Class A Units by the Partnership shall in no event take place until after the Conversion Date.  For clarity, it is noted that the objective of this paragraph is to put an LTIP Unitholder in a position where, if he or she so wishes, the Class A Units into which his or her Vested LTIP Units will be converted can be redeemed by the Partnership simultaneously with such conversion, with the further consequence that, if the General Partner elects to assume and perform the Partnership’s redemption obligation with respect to such Class A Units under Section 8.6 by delivering to such holder Shares rather than cash, then such holder can have such Shares issued to him or her simultaneously with the conversion of his or her Vested LTIP Units into Class A Units.  The General Partner and LTIP Unitholder shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.

 

C.             Forced Conversion .  The Partnership, at any time at the election of the General Partner, may cause any number of Vested LTIP Units held by an LTIP Unitholder to be converted (a “ Forced Conversion ”) into an equal number of fully paid and non-assessable Class A Units, giving effect to all adjustments (if any) made pursuant to Section 4.6 ; provided , however , that the Partnership may not cause Forced Conversion of any LTIP Units that would not at the time be eligible for conversion at the option of such LTIP Unitholder pursuant to Section 4.7.B or with respect to which a Special LTIP Unit Distribution is payable and has not been paid.  In order to exercise its right of Forced Conversion, the Partnership shall deliver a notice (a “ Forced Conversion Notice ”) in the

 

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form attached as Exhibit H to this Agreement to the applicable LTIP Unitholder not less than ten nor more than 60 days prior to the Conversion Date specified in such Forced Conversion Notice.  A Forced Conversion Notice shall be provided in the manner provided in Section 15.1 .

 

D.             Completion of Conversion .  A conversion of Vested LTIP Units for which the holder thereof has given a Conversion Notice or the Partnership has given a Forced Conversion Notice shall occur automatically after the close of business on the applicable Conversion Date without any action on the part of such LTIP Unitholder, as of which time such LTIP Unitholder shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of Class A Units issuable upon such conversion.  After the conversion of LTIP Units as aforesaid, the Partnership shall deliver to such LTIP Unitholder, upon his or her written request, a certificate of the General Partner certifying the number of Class A Units and remaining LTIP Units, if any, held by such person immediately after such conversion.  The Assignee of any Limited Partner pursuant to Article XI may exercise the rights of such Limited Partner pursuant to this Section 4.7 and such Limited Partner shall be bound by the exercise of such rights by the Assignee.

 

E.             Impact of Conversions for Purposes of Section 6.1.E.   For purposes of making future allocations under Section 6.1.E and applying the Capital Account Limitation, the portion of the Economic Capital Account Balance of the applicable LTIP Unitholder that is treated as attributable to his or her LTIP Units shall be reduced, as of the date of conversion, by the product of the number of LTIP Units converted and the Class A Unit Economic Balance.

 

F.              Class A Unit Transactions .  If the Partnership or the General Partner Entity shall be a party to any Class A Unit Transaction, as defined below (including without limitation a merger, consolidation, unit exchange, self tender offer for all or substantially all Class A Units or other business combination or reorganization, or sale of all or substantially all of the Partnership’s assets, but excluding any Class A Unit Transaction which constitutes an Adjustment Event) in each case as a result of which Class A Units shall be exchanged for or converted into the right, or the holders of such Class A Units shall otherwise be entitled, to receive cash, securities or other property or any combination thereof (each of the foregoing being referred to herein as a “ Class A Unit Transaction ”), then the General Partner shall, immediately prior to the Class A Unit Transaction, exercise its right to cause a Forced Conversion with respect to the maximum number of LTIP Units then eligible for conversion, taking into account any allocations that occur in connection with the Class A Unit Transaction or that would occur in connection with the Class A Unit Transaction if the assets of the Partnership were sold at the Class A Unit Transaction price or, if applicable, at a value determined by the General Partner in good faith using the value attributed to the Partnership Units in the context of the Class A Unit Transaction (in which case the Conversion Date shall be the effective date of the Class A Unit Transaction).  In anticipation of such Forced Conversion and the consummation of the Class A Unit Transaction, the Partnership shall use commercially reasonable efforts to cause each LTIP Unitholder to be afforded the

 

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right to receive in connection with such Class A Unit Transaction in consideration for the Class A Units into which his or her LTIP Units will be converted the same kind and amount of cash, securities and other property (or any combination thereof) receivable upon the consummation of such Class A Unit Transaction by a holder of the same number of Class A Units, assuming such holder of Class A Units is not a Person with which the Partnership consolidated or into which the Partnership merged or which merged into the Partnership or to which such sale or transfer was made, as the case may be (a “ Constituent Person ”), or an affiliate of a Constituent Person.  In the event that holders of Class A Units have the opportunity to elect the form or type of consideration to be received upon consummation of the Class A Unit Transaction, prior to such Class A Unit Transaction the General Partner shall give prompt written notice to each LTIP Unitholder of such election, and shall use commercially reasonable efforts to afford the LTIP Unitholders the right to elect, by written notice to the General Partner, the form or type of consideration to be received upon conversion of each LTIP Unit held by such holder into Class A Units in connection with such Class A Unit Transaction.  If an LTIP Unitholder fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each LTIP Unit held him or her (or by any of his or her transferees) the same kind and amount of consideration that a holder of a Class A Unit would receive if such Class A Unit holder failed to make such an election.  Subject to the rights of the Partnership and the General Partner under any Vesting Agreement and any Equity Incentive Plan, the Partnership shall use commercially reasonable effort to cause the terms of any Class A Unit Transaction to be consistent with the provisions of this Section 4.7.F and to enter into an agreement with the successor or purchasing entity, as the case may be, for the benefit of any LTIP Unitholders whose LTIP Units will not be converted into Class A Units in connection with the Class A Unit Transaction that will (i) contain provisions enabling the holders of LTIP Units that remain outstanding after such Class A Unit Transaction to convert their LTIP Units into securities as comparable as reasonably possible under the circumstances to the Class A Units and (ii) preserve as far as reasonably possible under the circumstances the distribution, special allocation, conversion, and other rights set forth in this Agreement for the benefit of the LTIP Unitholders.

 

E.                                     Sections 5.1.C. and 5.1.D. of the Partnership Agreement are hereby amended by appending the following sentence to the end of each such Section:

 

For purposes of the foregoing calculations, LTIP Units with an associated Distribution Participation Date that falls on or before the date of the relevant distribution shall be treated as outstanding Class A Units.

 

F.                                      Section 5.1 of the Partnership Agreement is hereby amended to add the following new Subsections 5.1.E, 5.1.F, and 5.1.G:

 

E.             Distributions With Respect to LTIP Units .  Commencing from the Distribution Participation Date established for any LTIP Units, for any quarterly or other period holders of such LTIP Units shall be entitled to receive, if, when and as authorized by the General Partner out of funds legally available for the payment of distributions,

 

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regular cash distributions in an amount per unit equal to the distribution payable on each Class A Unit for the corresponding quarterly or other period (the “ LTIP Distribution Amount ”).  In addition, from and after the Distribution Participation Date, LTIP Units shall be entitled to receive, if, when and as authorized by the General Partner out of funds or other property legally available for the payment of distributions, non-liquidating special, extraordinary or other distributions in an amount per unit equal to the amount of any non-liquidating special, extraordinary or other distributions payable on the Class A Units which may be made from time to time.  LTIP Units shall also be entitled to receive, if, when and as authorized by the General Partner out of funds or other property legally available for the payment of distributions, distributions representing proceeds of a sale or other disposition of all or substantially all of the assets of the Partnership in an amount per unit equal to the amount of any such distributions payable on the Class A Units, whether made prior to, on or after the Distribution Participation Date, provided that the amount of such distributions shall not exceed the positive balances of the Capital Accounts of the holders of such LTIP Units to the extent attributable to the ownership of such LTIP Units.  Distributions on the LTIP Units, if authorized, shall be payable on such dates and in such manner as may be authorized by the General Partner (any such date, a “ Distribution Payment Date ”); provided that the Distribution Payment Date and the record date for determining which holders of LTIP Units are entitled to receive a distribution shall be the same as the corresponding dates relating to the corresponding distribution on the Class A Units .

 

F.              Special LTIP Unit Distribution .  As of the Distribution Participation Date for an LTIP Unit that is not forfeited on or prior to such Distribution Participation Date, the holder of such LTIP Unit will be entitled to receive a special distribution (the “ Special LTIP Unit Distribution ”) with respect to such unit, equal to the Aggregate Special LTIP Unit Distribution Amount with respect to such LTIP Unit, divided by the total number of such holder’s LTIP Units that (A) have the same Distribution Participation Date, (B) were issued as part of the same award or program for purposes of Section 4.6 as specified in the Vesting Agreement or other documentation pursuant to which such LTIP Units are issued (the “ Same Award ” with respect to such LTIP Unit), and (C) are not forfeited on or prior to such Distribution Participation Date; provided , however , that such amount shall not exceed either (x) the amount of non-liquidating cash distributions per unit that were paid on the Class A Units on or after the date of the issuance of such LTIP Unit (or such other date as is specified as the Distribution Measurement Date in the Vesting Agreement or other documentation pursuant to which such LTIP Unit is issued) (such date being referred to as the “ Distribution Measurement Date ” with respect to such LTIP Unit) and prior to such Distribution Participation Date or (y) an amount that, together with all other Special LTIP Unit Distributions made to such holder on the same date with respect to such holder’s other LTIP Units issued as part of the Same Award as such LTIP Unit, exceeds the positive balance of the Capital Account of such holder to the extent attributable to such LTIP Units.  The “ Aggregate Special LTIP Unit Distribution Amount ” with respect to a holder’s LTIP Unit equals the aggregate amount determined by totaling, for each of such holder’s LTIP Units that were issued as part of the Same Award, (x) the amount of non-liquidating cash distributions per unit that were paid on the Class A Units on or after the

 

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Distribution Measurement Date with respect to such LTIP Unit and prior to the earlier of the Distribution Participation Date for such  LTIP Unit or the Distribution Participation Date for the LTIP Unit with respect to which the Aggregate Special LTIP Unit Distribution Amount is being calculated, multiplied by (y) the LTIP Unit Sharing Percentage for such LTIP Unit, and subtracting from such total aggregate amount all Special LTIP Unit Distributions previously made with respect to LTIP Units that were issued as part of the Same Award.  The Special LTIP Unit Distribution for an LTIP Unit will be payable on the first Distribution Payment Date on or after the Distribution Participation Date for such LTIP Unit if and when authorized by the General Partner out of funds legally available for the payment of distributions; provided that, to the extent not otherwise prohibited by the terms of class of Partnership Interests entitled to any preference in distribution and authorized by the General Partner out of funds legally available for the payment of distributions, such Special LTIP Unit Distribution may be paid prior to such Distribution Payment Date.  On or after the Distribution Participation Date with respect to an LTIP Unit, if such LTIP Unit is outstanding, no distributions (other than in Class A Units, Class B Units, LTIP Units or other Partnership Interests ranking on par with or junior to such units as to distributions and upon liquidation, dissolution or winding up of the affairs of the Partnership) shall be declared or paid or set apart for payment upon the Class A Units, the Class B Units, the LTIP Units or any other Partnership Interests ranking junior to or on a parity with the LTIP Unit as to distributions for any period (other than Special LTIP Unit Distributions with respect to LTIP Units that had an earlier Distribution Participation Date) unless the full amount of any Special LTIP Unit Distributions due with respect to such LTIP Unit have been or contemporaneously are declared and paid.

 

G.             LTIP Units Intended to Qualify as Profits Interests .  Distributions made pursuant to this Section 5.1 shall be adjusted as necessary to ensure that the amount apportioned to each LTIP Unit does not exceed the amount attributable to items of Partnership income or gain realized after the date such LTIP Unit was issued by the Partnership.  The intent of this Section 5.1.G is to ensure that any LTIP Units issued after the date of this Agreement qualify as “profits interests” under Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001), and this Section 5.1 shall be interpreted and applied consistently therewith. The General Partner at its discretion may amend this Section 5.1.G to ensure that any LTIP Units granted after the date of this Agreement will qualify as “profits interests” under Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001) (and any other similar rulings or regulations that may be in effect at such time).

 

G.                                    Section 6.1 of the Partnership Agreement is hereby amended to add the following new Subsection 6.1.E:

 

E.             Special Allocations Regarding LTIP Units .  Notwithstanding the provisions of Section 6.1.A , Liquidating Gains shall first be allocated to the LTIP Unitholders until their Economic Capital Account Balances, to the extent attributable to their ownership of LTIP Units, are equal to (i) the Class A Unit Economic Balance,

 

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multiplied by (ii) the number of their LTIP Units, plus the aggregate net amount of Net Income and Net Loss allocated to such LTIP Units prior to the Distribution Participation Date with respect to such LTIP Units less the amount of any Special LTIP Unit Distributions with respect to such LTIP Units, provided , however , that no such Liquidating Gains will be allocated with respect to any particular LTIP Unit unless and to the extent that such Liquidating Gains, when aggregated with other Liquidating Gains realized since the issuance of such LTIP Unit, exceed Liquidating Losses realized since the issuance of such LTIP Unit.  After giving effect to the special allocations set forth in Section 1 of Exhibit C hereto, and notwithstanding the provisions of Sections 6.1.A and 6.1.B above, in the event that, due to distributions with respect to Class A Units in which the LTIP Units do not participate or otherwise, the Economic Capital Account Balances of any present or former holder of LTIP Units, to the extent attributable to the holder’s ownership of LTIP Units, exceed the target balance specified above, then Liquidating Losses shall be allocated to such holder to the extent necessary to reduce or eliminate the disparity.  In the event that Liquidating Gains or Liquidating Losses are allocated under this Section 6.1.E , Net Income allocable under clause 6.1.A(6)  and any Net Losses shall be recomputed without regard to the Liquidating Gains or Liquidating Losses so allocated.  For this purpose, “ Liquidating Gains ” means net gains that are or would be realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Partnership, including but not limited to net capital gain realized in connection with an adjustment to the value of Partnership assets under Section 704(b) of the Code made pursuant to Section 1.D of Exhibit B of the Partnership Agreement.  “ Liquidating Losses ” means any net capital loss realized in connection with any such event.  The “ Economic Capital Account Balances ” of the LTIP Unitholders will be equal to their Capital Account balances to the extent attributable to their ownership of LTIP Units.  Similarly, the “ Class A Unit Economic Balance ” shall mean (i) the Capital Account balance of the General Partner, plus the amount of the General Partner’s share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the General Partner’s ownership of Class A Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this Section 6.1.E , but prior to the realization of any Liquidating Gains, divided by (ii) the number of the General Partner’s Class A Units.  Any such allocations shall be made among the LTIP Unitholders in proportion to the amounts required to be allocated to each under this Section 6.1.E .  The parties agree that the intent of this Section 6.1.E is to make the Capital Account balance associated with each LTIP Unit to be economically equivalent to the Capital Account balance associated with the General Partner’s Class A Units (on a per-Unit basis, other than differences resulting from the allocation of Net Income and Net Loss allocated to such LTIP Units prior to the Distribution Participation Date with respect to such LTIP Units in excess of the amount of Special LTIP Unit Distributions paid with respect to such LTIP Units), provided that Liquidating Gains are of a sufficient magnitude to do so upon a sale of all or substantially all of the assets of the Partnership, or upon an adjustment to the Partners’ Capital Accounts pursuant to Section 1.D of Exhibit B .  To the extent the LTIP Unitholders receive a distribution in excess of their Capital Accounts, such distribution will be a guaranteed payment under Section 707(c) of the Code.

 

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H.                                    Section 8.6 of the Partnership Agreement is hereby amended to add the following new Subsection 8.6.F:

 

F.              Forced Redemption of Class A Units Converted from LTIP Units .

 

(i)             With respect to any Class A Units that were issued in connection with the conversion of Vested LTIP Units into Class A Units pursuant to Section 4.7.A or 4.7.C, the Partnership, at any time after the service of the grantee of such LTIP Units to the General Partner or the Partnership is terminated, shall have the right (the “Forced Redemption Right”) to redeem such Class A Units.  Any such Forced Redemption Right shall be exercised pursuant to a Notice of Forced Redemption delivered to the holder of such Class A Units by the Partnership.  Such redemption shall occur on the Specified Forced Redemption Date and at a redemption price equal to either the Cash Amount or the Shares Amount, as determined by the General Partner, in its sole and absolute discretion (the “Forced Redemption Amount”).  If Shares Amount are issued, the General Partner shall issue such Shares directly to the holder of Class A Units being redeemed and the transaction shall be treated, for federal income tax purposes, as a sale of the Class A Units to the General Partner.  Payment of the Forced Redemption Amount in the form of Shares shall be in Shares registered for resale under Section 12 of the Exchange Act and listed for trading on the exchange or national market on which the Shares are Publicly Traded and the issuance of Shares upon redemption shall be registered under the Securities Act or, at the election of the General Partner, resale of the Shares issued upon redemption shall be registered (so long as the holder of the Class A Units being redeemed provides all information required for such registration), and, provided further that, if the Shares are not Publicly Traded at the time the Partnership exercises its Forced Redemption Right, the Forced Redemption Amount shall be paid only in the form of the Cash Amount unless the holder of the Class A Units being redeemed, in its sole and absolute discretion, consents to payment of the Forced Redemption Amount in the form of the Shares Amount.

 

(ii)            If the General Partner pays the holder of the Class A Units being redeemed the Forced Redemption Amount in the form of Shares, the total number of Shares to be paid to such holder in exchange for the such holder’s Class A Units shall be the applicable Shares Amount. If this amount is not a whole number of Shares, such holder shall be paid (i) that number of Shares which equals the nearest whole number less than such amount plus (ii) an amount of cash which the General Partner determines, in its reasonable discretion, to represent the fair value of the remaining fractional Share which would otherwise be payable to such holder.

 

(iii)           The holder of Class A Units being redeemed shall have no right with respect to any Class A Units so redeemed to receive any distributions paid in respect of a Partnership Record Date for distributions in respect of Class A Units after the Specified Forced Redemption Date with respect to such Class A Units.

 

(iv)           The holder of Class A Units being redeemed shall represent, warrant, and certify that such holder (a) has marketable and unencumbered title to the

 

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Class A Units being redeemed, free and clear of all liens and the rights of or interests of any other person or entity, (b) has the full right, power and authority to redeem and surrender such Class A Units as provided herein, and (c) has obtained the consent or approval of all persons or entities, if any, having the right to consult or approve such redemption and surrender.  Each holder of Class A Units being redeemed agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of Shares upon exercise of the Forced Redemption Right.

 

I.                                         Section 10.2 of the Partnership Agreement is amended by designating the existing text of Section 10.2 as Subsection A, and by appending the following new Subsection B:

 

B.             To the extent provided for in Treasury Regulations, revenue rulings, revenue procedures and/or other IRS guidance issued after the date hereof, the Partnership is hereby authorized to, and at the direction of the General Partner shall, elect a safe harbor under which the fair market value of any Partnership Interests issued after the effective date of such Treasury Regulations (or other guidance) will be treated as equal to the liquidation value of such Partnership Interests (i.e., a value equal to the total amount that would be distributed with respect to such interests if the Partnership sold all of its assets for their fair market value immediately after the issuance of such Partnership Interests, satisfied its liabilities (excluding any non-recourse liabilities to the extent the balance of such liabilities exceeds the fair market value of the assets that secure them) and distributed the net proceeds to the Partners under the terms of this Agreement). In the event that the Partnership makes a safe harbor election as described in the preceding sentence, each Partner hereby agrees to comply with all safe harbor requirements with respect to transfers of such Partnership Interests while the safe harbor election remains effective.

 

J.                                       Clause 1.D.(2) of Exhibit B — Capital Account Maintenance of the Partnership Agreement is hereby amended and restated in its entirety as follows:

 

(2)            Such adjustments shall be made as of the following times: (a) immediately prior to the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (b) immediately prior to the distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for an interest in the Partnership; (c) immediately prior to the liquidation of the Partnership within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g); and (d) immediately prior to the issuance of any LTIP Units, provided , however , that adjustments pursuant to clauses (a), (b) and (d) above shall be made only if the General Partner determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership.

 

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K.                                    Section 1 of Exhibit C to the Partnership Agreement is hereby amended by appending the following new Subsection H:

 

H.             Forfeiture Allocations .  Upon a forfeiture of any unvested Partnership Interest by any Partner, gross items of income, gain, loss or deduction shall be allocated to such Partner if and to the extent required by final Treasury Regulations promulgated after the date of the Amendment No. 3 to the Partnership Agreement to ensure that allocations made with respect to all unvested Partnership Interests are recognized under Code Section 704(b).

 

L.                                     New Exhibit G — Notice of Election by Partner to Convert LTIP Units into Class A Units, attached, is hereby added to the Partnership Agreement.

 

M.                                  New Exhibit H — Notice of Election by Partnership to Force Conversion of LTIP Units into Class A Units, attached, is hereby added to the Partnership Agreement.

 

2.                                       Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the Company hereby ratifies and confirms.

 

3.                                       This Amendment shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to conflicts of law.

 

4.                                       If any provision of this Amendment is or becomes invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not be affected thereby.

 

 

[ Signature Page to Amendment No. 3 to the Amended and Restated Agreement

of Limited Partnership of Kite Realty Group, L.P., follows ]

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first set forth above.

 

		KITE REALTY GROUP TRUST
		As sole general partner of Kite Realty Group, L.P.
		By:	/s/ Daniel R. Sink
			Daniel R. Sink
			Executive Vice President, Chief Financial Officer and Treasurer

 

 

[ Signature Page to Amendment No. 3 to the Amended and Restated Agreement

of Limited Partnership of Kite Realty Group, L.P. ]

 

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EXHIBIT G

 

NOTICE OF ELECTION BY PARTNER TO CONVERT

LTIP UNITS INTO CLASS A UNITS

 

The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert                  LTIP Units in Kite Realty Group, L.P. (the “Partnership”) into Class A Units in accordance with the terms of the Agreement of Limited Partnership of the Partnership, as amended; and (ii) directs that any cash in lieu of Class A Units that may be deliverable upon such conversion be delivered to the address specified below. The undersigned hereby represents, warrants, and certifies that the undersigned (a) has title to such LTIP Units, free and clear of the rights or interests of any other person or entity other than the Partnership; (b) has the full right, power, and authority to cause the conversion of such LTIP Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent or approve such conversion.

 

 

Dated:			Name of Limited Partner:
			(Signature of Limited Partner)
			(Street Address)
			(City)	(State)		(Zip Code)
			Signature Guaranteed by:

 

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EXHIBIT H

 

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF

LTIP UNITS INTO CLASS A UNITS

 

Kite Realty Group, L.P. (the “Partnership”) hereby irrevocably elects to cause the number of LTIP Units held by the holder of LTIP Units set forth below to be converted into Class A Units in accordance with the terms of the Agreement of Limited Partnership of the Partnership, as amended.

 

Name of Holder:

 

Date of this Notice:

 

Number of LTIP Units to be Converted:

 

Please Print: Exact Name as Registered

with Partnership

 

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EXHIBIT I

 

NOTICE OF FORCED REDEMPTION

 

Kite Realty Group, L.P. (the “Partnership”) hereby redeems Class A Units in Kite Realty Group, L.P. in accordance with the terms of the Agreement of Limited Partnership of Kite Realty Group, L.P., as amended, and the Forced Redemption Right referred to therein.  If the Shares Amount is delivered upon the exercise of the Forced Redemption Right, the General Partner shall deliver the number of Shares set forth below.  If the Cash Amount is delivered upon the exercise of the Forced Redemption Right, the Partnership shall deliver the Cash Amount set forth below.

 

Name of Holder:

 

Social Security or tax identifying number of Holder:

 

Address of Holder:

 

Number of Shares to be Delivered by the General Partner:

 

Cash Amount to be Delivered by the Partnership:

 

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Exhibit 10.2

 

Execution Copy

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into as of July 28, 2014, by and between Kite Realty Group Trust, a Maryland real estate investment trust (the “ Company ”), and John A. Kite (the “ Executive ”) and shall be effective as of July 1, 2014.

 

WHEREAS, the Executive has been employed by the Company as its Chief Executive Officer since 2004 pursuant to an employment agreement, dated as of August 16, 2004, and a Noncompetition Agreement, entered into as of August 16, 2004 (together, the “ 2004 Agreements ”) ;

 

WHEREAS, the Company and the Executive desire to continue that relationship on the revised terms set forth in this Agreement, which shall supersede and replace the 2004 Agreements and any amendments thereto;

 

WHEREAS, the Executive shall not be entitled to any future payment contemplated under prior agreements except as specifically provided herein; and

 

WHEREAS, the Board of Trustees of the Company (the “ Board ”) has approved and authorized the entry into this Agreement with the Executive.

 

NOW, THEREFORE, it is AGREED as follows:

 

1.                                       Positions, Duties and Term.   The Company hereby agrees to continue the employment of the Executive as its Chief Executive Officer, and the Executive hereby accepts such continuation of his employment, on the terms and conditions set forth below.

 

1.1                                Term.   The Executive’s employment hereunder shall be for a term commencing as of July 1, 2014 and ending as of the earlier of (i) June 30, 2017 or such later date to which the term of this Agreement may be extended pursuant to Section 1.1(a) or (ii) the Termination Date determined in accordance with Section 12.9.

 

(a)                                  Extension of Term.   Unless the Executive’s employment with the Company terminates earlier in accordance with Subsections (c) or (d), or the parties pursuant to Subsection (b) elect not to extend the term, the term of this Agreement automatically shall be extended as of July 1, 2017, and each July 1st thereafter, such that on each such date the term of employment under this Agreement shall be for a one-year period.

 

(b)                                  Election Not to Extend Term.   The Executive or the Board, by written notice delivered to the other, may at any time elect to terminate the automatic extension provision of Subsection (a).  Any such election may be made at any time until the ninety (90) days prior to the date as of which the term would otherwise be extended for an additional one year.  The parties agree that the expiration of this Agreement resulting from the Executive’s notice to the Company in accordance with this Subsection (b) shall not be considered a termination by the Executive for Good Reason or by the Company without Cause under this Agreement; however, the expiration of this Agreement resulting

 

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from the Company’s notice to the Executive in accordance with this Subsection (b) shall be treated as a termination by the Company without Cause under this Agreement.

 

(c)                                   Early Termination.   The Company may terminate the Executive’s employment with or without Cause or on account of Disability, with written notice delivered to the Executive from the Board; provided, that, the Company shall have no right to terminate the Executive’s employment on account of Disability if, in the opinion of a qualified physician reasonably acceptable to the Company, it is reasonably certain that the Executive will be able to resume the Executive’s duties on a regular full-time basis within ninety (90) days of the date the Executive receives notice of such termination on account of Disability.  Any termination in accordance with this Section 1.1(c) shall not be, nor shall it be deemed to be, a breach of this Agreement.

 

(d)                                  Early Resignation.   The Executive may resign from the Company for any reason, including Good Reason.  The Executive shall effect a Good Reason termination by providing at least thirty (30) days’ written notice to the Board of the applicable Good Reason criteria; provided that the Executive provided written notice of the existence of the condition that is the basis for such Good Reason within ninety (90) days of the first occurrence of such condition; and further provided that if the basis for such Good Reason is correctible and the Company corrects the basis for such Good Reason within thirty (30) days after receipt of such notice of the occurrence of the condition, the Good Reason defect shall be cured, and Executive shall not then have the right to terminate his employment for Good Reason with respect to the occurrence addressed in the written notice.  Notwithstanding the prior sentence, in no event may the Executive effect a Good Reason termination for a condition that is the basis for such Good Reason more than one year after the first occurrence of such condition.

 

(e)                                   Termination and Offices Held.   At the time that the Executive ceases to be an employee of the Company, the Executive agrees that he shall resign from any offices he holds with the Company and any affiliate, including any boards of directors or boards of trustees other than the Board.

 

1.2                                Duties.   The Executive shall faithfully perform for the Company the duties incident to the office of Chief Executive Officer and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board (including the performance of services for, and serving on the board of directors of, any affiliate of the Company without any additional compensation).  The Executive shall devote substantially all of the Executive’s business time and effort to the performance of the Executive’s duties hereunder, provided that in no event shall this sentence prohibit the Executive from performing personal and charitable activities and any other activities approved by the Board, so long as such activities do not materially interfere with the Executive’s duties for the Company.  The Board may delegate its authority to take any action under this Agreement to the Compensation Committee of the Board (the “ Committee ”).

 

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2.                                       Compensation .

 

2.1                                Salary.   During the term of his employment under this Agreement, the Company shall pay the Executive at an annual rate of $700,000 (the “ Base Salary ”).  The Base Salary shall be reviewed no less frequently than annually and may be increased at the discretion of the Board or the Committee, as applicable.  Except as otherwise agreed in writing by the Executive, the Base Salary shall not be reduced from the amount previously in effect.  Upon any such increase, the increased amount shall thereafter be deemed to be the Base Salary for purposes of this Agreement.  The Base Salary shall be payable in such installments as shall be consistent with the Company’s payroll procedures for senior executives generally.  Notwithstanding the employment of the Executive by the Company, the Company shall be entitled to pay the Executive from the payroll of any subsidiary of the Company.

 

2.2                                Annual Cash Incentive.   The Executive shall be eligible to receive an annual cash bonus for the Company’s fiscal years ending December 31, 2015 and each December 31 thereafter based on performance objectives established by the Committee each such fiscal year (the “ Annual Cash Incentive ”).  The Executive’s target Annual Cash Incentive amount for such fiscal years will be the percentage of Base Salary designated as the target by the Committee, which amount shall be at least 125% of the Base Salary then in effect for each applicable year (the “ Full-Year Target ”).  Notwithstanding the preceding, the Executive’s Annual Cash Incentive, if any, may be below (including zero), at, or above, the target based upon the achievement of the performance objectives, and payment of any such Annual Cash Incentive shall be in accordance with the terms of such program.  Except as otherwise provided in this Agreement, no Annual Cash Incentive will be payable following the Executive’s Termination Date.

 

2.3                                Equity Awards.   The Executive shall be entitled to participate in the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, and to receive awards of equity (the “ Equity Awards ”) pursuant thereto.  Except as provided in Section 4 and Section 5, all other terms of the equity awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted.

 

2.4                                Benefits.   During the term of his employment under this Agreement, the Executive shall be permitted to participate in any group life, hospitalization or disability insurance plans, health programs, pension and profit sharing plans and similar benefits that may be available to other senior executives of the Company generally, on the same terms as may be applicable to such other executives, in each case to the extent that the Executive is eligible under the terms of such plans or programs.  During the term of his employment under this Agreement, the Company shall maintain customary liability insurance for trustees and officers and list the Executive as a covered officer.

 

2.5                                Vacation.   During the term of his employment under this Agreement, the Executive shall be entitled to vacation in accordance with the Company’s policy.

 

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2.6                                Expenses.   The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of pocket expenses actually incurred (and, in the case of reimbursement, paid) by the Executive during the term of the Executive’s employment under this Agreement, provided that the Executive submits such expenses in accordance with the policies applicable to senior executives of the Company generally.

 

3.                                       Termination for Cause, Executive’s Election Not to Extend Term, or Resignation by the Executive Other than for Good Reason.   In the event of the Executive’s resignation other than for Good Reason, his termination of employment due to his election not to extend the term in accordance with Section 1.1(b), or his termination by the Company for Cause, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.

 

4.                                       Termination On Account of Death or Disability.   In the event of the Executive’s termination of employment with the Company on account of death or Disability, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this termination, (a) within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive (or, in the case of the Executive’s death, the Executive’s beneficiary or, if none has been designated in accordance with Section 10.3, the Executive’s estate), (i) the amount of the Executive’s Compensation Accrued at Termination and (ii) a single sum cash payment equal to the Partial Year Bonus; (b) all Equity Awards held by the Executive, other than any Performance-Based Award (defined in Section 5.3(b)) that is designated an “out-performance” award and that references and proclaims to supersede this Agreement and as to which the provisions of such Equity Award shall control, shall become fully vested and exercisable; (c) the benefits described in Section 5.2; and (d) the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  A Performance-Based Award becoming vested under this Section 4 (rather than pursuant to the Equity Award agreement) shall vest at the target level.

 

5.                                       Termination Without Cause or for Good Reason.   If during the term of his employment under this Agreement, the Executive is terminated by the Company without Cause (which includes the Company’s election not to extend the term of this Agreement in accordance with Section 1.1(b)) or resigns from the Company for Good Reason, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  In addition, in connection with a resignation or termination described in this Section 5, subject to the

 

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requirements of Section 5.4, the Executive shall be entitled to the benefits described in Section 5.1, Section 5.2, and to the extent applicable, Section 5.3.

 

5.1                                Severance and Bonus.   With respect to a termination of employment under this Section 5 only, the benefits under this Section 5.1 shall consist of the following:

 

(a)                                  A single sum severance cash payment equal to three (3) times the sum of: (i) the Executive’s Base Salary in effect on the Termination Date and (ii) the average Annual Cash Incentive actually paid to the Executive with respect to the prior three (3) fiscal years, which shall be paid to the Executive within sixty (60) days of the Executive’s Termination Date; and

 

(b)                                  A single sum cash payment equal to the Partial Year Bonus; provided, that, no amount may be paid under this Section 5.1(b) unless the Company performance criteria for payment of an Annual Cash Incentive are achieved at the level required for a payout at the Full-Year Target level or above as of the close of the fiscal year in which the Termination Date occurs; and provided, further, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control and occurs during the performance year that includes the Change in Control, the Partial Year Bonus shall be payable without regard to achievement of the performance criteria.

 

5.2                                Medical, Prescription, and Dental Benefits.   With respect to a termination of employment under Section 4 and this Section 5 only, the benefits under this Section 5.2 shall consist of continued medical, prescription, and dental benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the welfare benefit plans, practices, policies, and programs provided by the Company to the extent applicable generally to other peer employees of the Company and its affiliated companies, as if the Executive’s employment had not been terminated, for eighteen (18) months after the Executive’s Termination Date; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical, prescription, and dental benefits under another employer-provided plan, the medical, prescription, and dental benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility.

 

5.3                                Accelerated Vesting of Equity Awards.   With respect to a termination of employment under this Section 5 and as otherwise provided in this Employment Agreement, the benefits under this Section 5.3 shall consist of the following:

 

(a)                                  All equity or equity-based awards held by the Executive at termination of employment, including but not limited to, stock options, restricted stock, and restricted stock units, whether or not granted as performance-based awards, and which at the time of termination of employment are subject only to time-vesting based on service (the “ Time Vested Awards ”), shall become fully vested and non-forfeitable to the extent not already so vested;

 

(b)                                  Subject to Section 5.3(c) and the clarification described in the next sentence, with respect to all equity and equity-based awards held by the Executive at termination of employment

 

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which are subject to cancellation in the event the stated performance objectives are not satisfied, including but not limited to, stock options, restricted stock, and restricted stock units, and for which at the time of the Executive’s termination of employment, the performance objectives have not been satisfied (the “ Performance-Based Awards ”), the Performance-Based Awards shall become vested and non-forfeitable on a Pro-Rata Basis, but only if at the end of the performance period, the performance objectives are achieved; provided, however, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control, the Performance-Based Awards outstanding as of such Change in Control and remaining outstanding as of the Executive’s resignation or termination under this Section 5 shall become fully vested and non-forfeitable.  With respect to the provision for vesting and non-forfeiture of an award on a Pro-Rata Basis as described herein, only the performance periods under the award that have already commenced as of the Termination Date shall be taken into account to determine whether the performance objectives ultimately are achieved, and any performance period that has not commenced as of the Termination Date shall be disregarded for purposes of determining whether the award becomes vested and non-forfeitable on a Pro-Rata Basis; and

 

(c)                                   The amount of Performance-Based Awards eligible to become vested under Section 5.3(b) shall be determined by the level of achievement of the performance objectives; provided, however, that if the Performance-Based Award is becoming fully vested and non-forfeitable under Section 5.3(b) on account of a Change in Control, the earnings level shall not be conditioned on awaiting the end of the performance period and achievement of the performance objectives, and instead the performance objectives upon which the earning of the Performance-Based Award is conditioned shall be deemed to have been met at the greater of (i) target level at the Termination Date, or (ii) actual performance at the Termination Date.

 

To the extent that any Performance-Based Award references and proclaims to supersede this Agreement, the provisions of such Equity Awards shall control and supersede this Section 5.3.

 

5.4                                Waiver and Release Agreement.   The Executive agrees to execute at the time of the Executive’s termination of employment a Waiver and Release Agreement in a form provided to the Executive by the Company (the “ Waiver and Release Agreement ”), consistent with the form attached hereto as Exhibit C , the terms and conditions of which are specifically incorporated herein by reference.  The execution and delivery of the Waiver and Release Agreement shall be made within forty-five (45) days of delivery to the Executive of the Waiver and Release Agreement, and the Company shall (a) pay the benefits under Section 5.1(a) and, the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive and (b) in the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, pay the benefits under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive or, if later, at the same time as payment is made to all other participants under the Annual Cash Incentive program following the close of the fiscal year in which the Termination Date occurs.  If the Waiver and Release

 

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Agreement is not executed within the forty-five (45)-day period post-delivery, the Executive will forfeit all benefits provided pursuant to Section 5.1, Section 5.2, and Section 5.3.   If the Waiver and Release Agreement is not received by the Executive within five (5) days of the Executive’s Termination Date it shall not be required and this Section 5.4 shall be null and void.

 

6.                                       Nature of Payments.   For the avoidance of doubt, the Executive acknowledges and agrees that the payments set forth in Section 3, Section 4, and Section 5 constitute liquidated damages for termination of his employment during the term of this Agreement (including any extensions thereof).

 

7.                                       Golden Parachute Excise Tax Provisions.   In the event it is determined that any payment or benefit (within the meaning of Section 280G(B)(2) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), to the Executive or for his or her benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his or her employment (“ Payments ”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “ Excise Tax ”), then the total Payments shall be reduced to the extent the payment of such amounts would cause the Executive’s total termination benefits to constitute an “excess parachute payment” under Section 280G of the Code and by reason of such excess parachute payment the Executive would be subject to an excise tax under Section 4999(a) of the Code, but only if the Executive (or the Executive’s tax advisor) determines that the after-tax value of the termination benefits calculated with the foregoing restriction exceed those calculated without the foregoing restriction.  In that event, the Executive shall designate those rights, payments, or benefits under this Agreement, any other agreements, and any benefit arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Executive under this Agreement be deemed to be an excess parachute payment; provided, however, that in order to comply with Section 409A of the Code, the reduction or elimination will be performed in the order in which each dollar of value subject to a right, payment, or benefit reduces the parachute payment to the greatest extent.  Except as otherwise expressly provided herein, all determinations under this Section 7 shall be made at the expense of the Company by a nationally recognized public accounting or consulting firm selected by the Company and subject to the approval of the Executive, which approval shall not be unreasonably withheld.  Such determination shall be binding upon the Executive and the Company.

 

7.1                                Company Withholding.   Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the determinations in the paragraph above, an Excise Tax will be imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

 

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8.                                       Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement.

 

8.1                                Confidential Information.   The Executive acknowledges that, during the course of his employment with the Company, the Executive has been given or has become acquainted with Confidential Information (as hereinafter defined) of the Company and may continue to be given or become acquainted with Confidential Information.  As used in this Section 8.1, “ Confidential Information ” of the Company means all confidential information, knowledge, or data relating to the Company or any of its affiliates, or to the Company’s or any such affiliate’s respective businesses and investments (including confidential information of others that has come into the possession of the Company or any such affiliate), learned by the Executive heretofore or hereafter directly or indirectly from the Company or any of its affiliates and which is not generally available lawfully and without breach of confidential or other fiduciary obligation to the general public without restriction, except with the Company’s express written consent or as may otherwise be required by law or any legal process.

 

The Executive acknowledges that the Confidential Information of the Company, as such may exist from time to time, is a valuable, confidential, special, and unique asset of the Company and its affiliates, expensive to produce and maintain, and essential for the profitable operation of their respective businesses.  The Executive agrees that, during the course of his employment with the Company, or at any time thereafter, he shall not, directly or indirectly, communicate, disclose, or divulge to any Person (as such term is hereinafter defined), or use for his benefit or the benefit of any Person, in any manner, any Confidential Information of the Company or its affiliates, acquired during his employment with the Company or any other confidential information concerning the conduct and details of the businesses of the Company and its affiliates, except as required in the course of his employment with the Company or as otherwise may be required by law.  For the purposes of this Agreement, “ Person ” shall mean any individual, partnership, corporation, trust, unincorporated association, joint venture, limited liability company, or other entity or any government, governmental agency, or political subdivision.

 

All documents relating to the businesses of the Company and its affiliates including, without limitation, Confidential Information of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, are the exclusive property of the Company and such respective affiliates and must not be removed from the premises of the Company, except as required in the course of the Executive’s employment with the Company.  The Executive shall return all such documents (including any copies thereof) to the Company when the Executive ceases to be employed by the Company or upon the earlier request of the Company or the Board.

 

8.2                                Noncompetition.   During the term of this Agreement (including any extensions thereof) and, subject to the penultimate sentence of this Section 8.2, for a period of eighteen (18) months following the termination of the Executive’s employment under this Agreement for any reason (the “ Restricted Period ”), the Executive shall not, except with the Company’s express prior written consent, (a) directly or indirectly, engage in any business involving real property development, construction, acquisition, ownership, or operation, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, director, trustee, officer, employee, or independent

 

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contractor of any Person or (b) own any interests in real property which are competitive, directly or indirectly, with any business carried on by the Company; provided, however, that this Section 8.2 shall not be deemed to prohibit any of the following: (i) any of the real estate (and real estate-related) activities listed on Exhibit A hereto, the Executive’s ownership, marketing, sale, transfer, or exchange of any of the Executive’s interests in any of the properties or entities listed on Exhibit A hereto, or any other permitted activities listed on Exhibit A hereto; and (ii) the direct or indirect ownership by the Executive of up to five percent (5%) of the outstanding equity interests of any public company.  Notwithstanding the foregoing, during the eighteen (18)-month “tail” period included in the Restricted Period, the restrictions set forth in this Section 8.2 shall apply only (i) with respect to any Person that has been designated as being part of the Company’s peer group, as determined by the Committee and set forth in the most recent proxy statement filed by the Company, or (ii) with respect to any other Person that owns neighborhood or community shopping centers and with respect to (i) and (ii) only within the following “ Restricted Areas ”: (A) the states of Indiana, Florida, and Texas; (B) the area within a ten (10)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date; (C) each county in each state in which the Company owns or leases property as of the Executive’s Termination Date; and (D) in any state in which the Company owns or leases at least five (5) properties as of the Executive’s Termination Date, the area within a fifty (50)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date.  Notwithstanding anything to the contrary in this Section 8.2, during the period beginning twelve (12) months following a Change in Control consummated on or after the date of signing this Agreement (the “ Effective Time ”), and ending twelve (12) months after such Effective Time, the Executive may resign without Good Reason, and this Section 8.2 shall not apply.  For the avoidance of doubt, this Section 8.2 shall apply in all events if the Executive’s resignation is on account of Good Reason or if the Executive is terminated by the Company for any reason whether before or following a Change in Control.

 

8.3                                Non-Solicitation.   During the term of this Agreement (including any extensions thereof) and for a period of two (2) years following the termination of the Executive’s employment under this Agreement for any reason, the Executive shall not, except with the Company’s express prior written consent, for the benefit of any entity or Person (including the Executive) (a) solicit, induce, or encourage any employee of the Company, or any of its affiliates, to leave the employment of the Company, or solicit, induce, or encourage any customer, client, or independent contractor of the Company, or any of its affiliates, to cease or reduce its business with or services rendered to the Company or its affiliates or (b) hire (on behalf of the Executive or any other person or entity) any employee or independent contractor who has left the employment or other service of the Company (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with the Company.

 

8.4                                Cooperation With Regard to Litigation.   The Executive agrees to cooperate with the Company, during the term and thereafter (including following the Executive’s termination of employment for any reason), by making himself available to testify on behalf of the Company or any affiliate of the Company, in any action, suit, or proceeding, whether civil, criminal, administrative, or

 

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investigative, and to assist the Company, or any affiliate of the Company, in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to the Company or any affiliate of the Company, as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations.  The Company agrees to reimburse the Executive, on an after-tax basis, for all reasonable expenses actually incurred in connection with his provision of testimony or assistance.

 

8.5                                Non-Disparagement.   The Executive shall not, at any time during the term of his employment and thereafter disparage the Company, its affiliates or their respective officers, directors or trustees, nor shall the Company, its affiliates or their respective officers, directors or trustees disparage Executive.  Notwithstanding the foregoing, nothing in this Agreement shall preclude the Executive or his successor or members of the Board from making truthful statements that are required by applicable law, regulation or legal process.

 

8.6                                Survival.   The provisions of this Section 8 shall survive any termination or expiration of this Agreement.

 

8.7                                Remedies.   The Executive agrees that any breach of the terms of this Section 8 would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; the Executive therefore also agrees that, in the event of said breach or any threat of breach and notwithstanding Section 9, the Company shall be entitled to an immediate injunction and restraining order from a court of competent jurisdiction to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to prove damages.  The availability of injunctive relief shall be in addition to any other remedies to which the Company may be entitled at law or in equity, but remedies other than injunctive relief may only be pursued in an arbitration brought in accordance with Section 9.  The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach of this Section 8, including but not limited to the recovery of damages from the Executive.

 

9.                                       Governing Law; Disputes; Arbitration.

 

9.1                                Governing Law.   This Agreement is governed by and is to be construed, administered, and enforced in accordance with the laws of the State of Indiana, without regard to conflicts of law principles.  If under the governing law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law, such portion shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is not possible, to be omitted from this Agreement.  The invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion hereof.  If any court determines that any provision of Section 8 is unenforceable because of the duration or geographic scope of such provision, it is the parties’ intent that such court shall have the power to modify the duration or geographic scope of such provision, as the case may be, to the extent necessary to render the provision enforceable, and in its

 

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modified form, such provision shall be enforced.  If the courts of any one or more of jurisdictions hold Section 8 to be wholly unenforceable by reason of breadth of scope or otherwise, it is the intention of the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided above in the courts of any other jurisdiction within the geographical scope of the provisions of Section 8, as to breaches of such provisions in such other respective jurisdictions, such provisions as they relate to each jurisdiction’s being, for this purpose, severable, diverse, and independent covenants, subject, where appropriate, to the doctrine of res judicata.

 

9.2                                Arbitration.   Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Indianapolis, Indiana by three (3) arbitrators.  The Executive and the Company shall each select one arbitrator and those two designated arbitrators shall select a third arbitrator.  The arbitration shall not be administered by the American Arbitration Association; however, the arbitration shall be conducted by the three selected arbitrators using the procedural rules of the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, the Company and the Executive hereby consent to the jurisdiction of any or all of the following courts:  (i) the United States District Court for the Southern District of Indiana, (ii) any of the courts of the State of Indiana, or (iii) any other court having jurisdiction.  The Company and the Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  The Company and the Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 9.  Notwithstanding any provision in this Section 9, the Executive shall be paid compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

9.3                                WAIVER OF JURY TRIAL.   TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

10.                                Miscellaneous.

 

10.1                         Integration.   This Agreement cancels and supersedes any and all prior agreements and understandings between the parties hereto with respect to the employment of the Executive by the Company, any parent or predecessor company, and the Company’s affiliates during the term, but

 

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excluding existing contracts relating to compensation under executive compensation and employment benefit plans of the Company and its affiliates.  This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto.  The Executive shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by the Executive under such prior agreements and understandings or under any benefit or compensation plan of the Company.

 

10.2                         Successors; Transferability.   The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not the corporate existence of the Company continues) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “ Company ” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise, and in the case of an acquisition of the Company in which the corporate existence of the Company continues, the ultimate parent company following such acquisition.  Subject to the foregoing, the Company may transfer and assign this Agreement and the Company’s rights and obligations hereunder to another entity that is substantially comparable to the Company in its financial strength and ability to perform the Company’s obligations under this Agreement.  Neither this Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or assignable by the Executive, except in accordance with the laws of the descent and distribution or as specified in Section 10.3.

 

10.3                         Beneficiaries.   The Executive shall be entitled to designate (and change, to the extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or benefits provided hereunder following the Executive’s death.

 

10.4                         No Duty to Mitigate.   The Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor will any payments or benefits hereunder be subject to offset in the event the Executive does mitigate, except as provided in Section 5.2.

 

10.5                         Notices.   Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express or other similar overnight service or by certified or registered mail, return receipt requested, postage prepaid and addressed to such party at the address set forth below or at such address as may be designated by such party by like notice:

 

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If to the Company or the Board:

 

Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

Attn: Compensation Committee of the Board of Trustees, Chairperson

 

With a copy to:

 

Hogan Lovells US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Attn: David Bonser, Esq.

 

If to Executive, to the address set forth in the records of the Company.

 

If the parties by mutual agreement supply each other with fax numbers for the purpose of providing notice by facsimile, such notice shall also be proper notice under this Agreement.  Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered (i) two (2) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, (ii) when received if it is sent by fax communication during normal business hours on a business day or one business day after it is sent by fax and received if sent other than during business hours on a business day, (iii) one business day after it is sent via a reputable overnight courier service, charges prepaid, or (iv) when received if it is delivered by hand.

 

10.6                         Headings.   The headings of this Agreement are for convenience of reference only and do not constitute a part hereof.

 

10.7                         Attorneys’ Fees.   In the event of any legal proceeding relating to this Agreement or any term or provision thereof, the losing party shall be responsible to pay or reimburse the prevailing party for all reasonable attorneys’ fees incurred by the prevailing party in connection with such proceeding; provided, however, the Executive shall not be required to pay or reimburse the Company unless the claim or defense asserted by the Executive was unreasonable.

 

10.8                         No General Waivers.   The failure of any party at any time to require performance by any other party of any provision hereof or to resort to any remedy provided herein or at law or in equity shall in no way affect the right of such party to require such performance or to resort to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the provisions hereof be deemed to be a waiver of any subsequent breach of such provisions.  No such waiver shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.

 

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10.9                         Offsets; Withholding.   The amounts required to be paid by the Company to the Executive pursuant to this Agreement shall not be subject to offset.  The foregoing and other provisions of this Agreement notwithstanding, all payments to be made to Executive under this Agreement, including under Section 3, Section 4, and Section 5, or otherwise by the Company, will be subject to withholding to satisfy required withholding taxes and other required deductions.

 

10.10                  Counterparts.   This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

10.11                  Representations of the Executive.   The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which prevents him from entering into this Agreement or performing all of his obligations hereunder.

 

10.12                  Conflicting Terms.   Except as provided in Section 4 and Section 5.3, in the event of any conflict between the terms of this Agreement and the terms of any other compensation plan, agreement or award (including, without limitation, any annual or long term bonus and any equity based award), the terms and conditions of this Agreement shall govern and control.

 

11.                                Section 409A Savings Provisions.   It is intended that the payments and benefits provided under this Agreement shall be exempt from the application of the requirements of Section 409A of the Code and the regulations and other guidance issued thereunder (collectively, “ Section 409A ”). Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible.

 

11.1                         Separation from Service.   The Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A.

 

11.2                         Specified Employee Provisions.   Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “ Delay Period ”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such Delay Period (or upon the

 

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Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.  To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

 

11.3                         Expense Reimbursements.   (a) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred; (b) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit; and (c) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

 

12.                                Definitions Relating to Termination Events.

 

12.1                         Affiliate.   For purposes of this Agreement, an “ affiliate ” of any person means another person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person, and includes subsidiaries.  Notwithstanding the foregoing, the persons listed on Exhibit B , as such Exhibit B is updated from time to time by the mutual agreement of the parties, shall not be affiliates of the Company.

 

12.2                         Cause.   For purposes of this Agreement, “ Cause ” shall mean Executive’s:

 

(a)                                  Conviction for (or pleading nolo contendere to) any felony;

 

(b)                                  Commission of any act of fraud, theft, or dishonesty related to the business of the Company or its affiliates or the performance of the Executive’s duties hereunder;

 

(c)                                   Willful and continuing failure or habitual neglect by the Executive to perform the Executive’s duties hereunder;

 

(d)                                  Material violation of the covenants contained in Section 8; or

 

(e)                                   Willful and continuing material breach of this Agreement.

 

For purposes of this Section 12.2, no act, or failure to act, by the Executive shall be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company or its affiliates.

 

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12.3                         Change in Control.   For purposes of this Agreement, “ Change in Control ” shall mean:

 

(a)                                  The dissolution or liquidation of the Company;

 

(b)                                  The merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity or immediately following which the persons or entities who were beneficial owners (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of voting securities of the Company immediately prior thereto cease to beneficially own more than fifty percent (50%) of the voting securities of the surviving entity immediately thereafter;

 

(c)                                   A sale of all or substantially all of the assets of the Company to another person or entity;

 

(d)                                  Any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) that results in any person or entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than persons who are shareholders or affiliates immediately prior to the transaction) owning thirty percent (30%) or more of the combined voting power of all classes of shares of the Company; or

 

(e)                                   Individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a trustee subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for trustee, without written objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or contests by or on behalf of a person other than the Board.

 

12.4                         Compensation Accrued at Termination.   For purposes of this Agreement, “ Compensation Accrued at Termination ” means the following:

 

(a)                                  The unpaid portion of annual Base Salary at the rate payable, in accordance with Section 2.1 hereof, at the Executive’s Termination Date, pro-rated through such Termination Date, payable in accordance with the Company’s regular pay schedule;

 

(b)                                  Payment for vacation accrued under this Agreement but unused as of the Executive’s Termination Date;

 

(c)                                   Except in the event the Executive’s employment is terminated for Cause (except to the extent otherwise required by law), all earned and unpaid and/or vested, nonforfeitable amounts

 

16

 

owing or accrued at the Executive’s Termination Date under any compensation and benefit plans, programs, and arrangements set forth or referred to in Sections 2.2 and 2.3 hereof (including any earned and vested Annual Cash Incentive which the Company agrees is earned for purposes of this definition as of the close of business on the last day of the fiscal year) in which the Executive theretofore participated, payable (except as otherwise provided in Section 3, Section 4 and Section 5 of this Agreement) in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued; and

 

(d)                                  Reasonable business expenses and disbursements incurred by the Executive prior to the Executive’s termination of employment, to be reimbursed to the Executive, as authorized under Section 2.6, in accordance with the Company’s reimbursement policies as in effect at the Executive’s Termination Date.

 

12.5                         Disability.   For purposes of this Agreement, “ Disability ” means the Executive becomes eligible for disability benefits under the Company’s long-term disability plans and arrangements (or, if none apply, would have been so eligible under the most recent plan or arrangement).  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, Section 409A of the Code, and other applicable law.

 

12.6                         Good Reason.   For purposes of this Agreement, “ Good Reason ” shall mean, without the Executive’s express written consent, the occurrence of any of the following circumstances:

 

(a)                                  The material reduction of the Executive’s authority, duties, and responsibilities, or the assignment to the Executive of duties materially and adversely inconsistent with the Executive’s position or positions with the Company and its affiliates;

 

(b)                                  A material reduction in Base Salary of the Executive except in connection with a reduction in compensation generally applicable to senior management employees of the Company;

 

(c)                                   The Company requiring the Executive to relocate his principal place of business for the Company to a location more than fifty (50) miles from the Company’s principal place of business in Indianapolis, Indiana;

 

(d)                                  The failure by the Company to obtain an agreement in form and substance reasonably satisfactory to the Executive from any successor to the business of the Company to assume and agree to perform this Agreement; or

 

(e)                                   The Company’s material breach of this Agreement.

 

12.7                         Partial Year Bonus.   For purposes of this Agreement, “ Partial Year Bonus ” shall mean an amount equal to the product of (a) the Executive’s Full-Year Target Annual Cash Incentive for the fiscal year in which the Executive’s employment terminates and (b) a fraction, the numerator of which is the

 

17

 

number of days in the current fiscal year through the Executive’s Termination Date, and the denominator of which is 365.

 

12.8                         Pro-Rata Basis.   For purposes of this Agreement, vesting on a “ Pro-Rata Basis ” shall mean vesting in an amount equal to a fraction not to exceed one (1), the numerator of which is the number of days the Executive was employed by the Company from the grant date for such award to the Termination Date, and the denominator of which is the number of total days from the grant date to the date that otherwise would have resulted in full vesting of the award.

 

12.9                         Termination Date.   For purposes of this Agreement, “ Termination Date ” shall mean:

 

(a)                                  The date that the Board delivers written notice to the Executive of his termination of employment for Cause or on account of Disability;

 

(b)                                  The date set forth in a written notice delivered to the Executive of his termination of employment without Cause, which shall not be less than thirty (30) days after the date of such notice or more than sixty (60) days after the date of such notice;

 

(c)                                   The date set forth in a written notice delivered to the Board of the Executive’s resignation, with or without Good Reason, which shall not be less than thirty (30) days after the date of such notice, except as otherwise mutually agreed to by the Company and the Executive;

 

(d)                                  The June 30 th  following the date that the Executive or the Board provides the other party with notice of an election to terminate the automatic extension provision of Section 1.1(a), except as otherwise mutually agreed to by the Company and the Executive; or

 

(e)                                   The date of the Executive’s death.

 

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IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first written above.

 

	KITE REALTY GROUP TRUST
	By:	/s/ Daniel R. Sink
	Name:	DANIEL R. SINK
	Title:	EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
	EXECUTIVE
	/s/ John A. Kite
	JOHN A. KITE

 

19

 

EXHIBIT A

 

EXCLUDED ACTIVITIES, PROPERTIES, AND INTERESTS

 

A-1

 

EXHIBIT B

 

EXCLUSION FROM AFFILIATES

 

B-1

 

EXHIBIT C

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT is entered into as of [ TO BE DETERMINATED AT TERMINATION OF EMPLOYMENT ] , by John A. Kite (the “ Executive ”) in consideration of the severance pay and severance benefits to be provided to the Executive by Kite Realty Group Trust (the “ Company ”) pursuant to Section 5 of the Executive Employment Agreement (the “ Employment Agreement ”) by and between the Company and the Executive (the “ Severance Payment ”).

 

1.                                       Waiver and Release.

 

(a)                                  Subject to Section 1(b) of this Waiver and Release Agreement, the Executive, on his or her own behalf and on behalf of his or her heirs, executors, administrators, attorneys, and assigns, hereby unconditionally and irrevocably releases, waives, and forever discharges the Company and each of its affiliates, parents, successors, predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “ Employer ”), from any and all causes of action, claims, and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of his or her signing of the Waiver and Release Agreement, concerning his or her employment or separation from employment.  Subject to Section 1(b) of this Waiver and Release Agreement, this release includes, but is not limited to, any payments, benefits, or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended); any claim arising under any state or local laws, ordinances, or regulations (including, but not limited to, any state or local laws, ordinances, or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy, or loss of consortium.

 

(b)                                  Notwithstanding any other provision of this Waiver and Release Agreement to the contrary, this Waiver and Release Agreement does not encompass, and Executive does not release, waive or discharge, the obligations of the Company (i) to make the payments and provide the other benefits contemplated by the Employment Agreement or any other agreement with Executive, (ii) under any award agreement entered into with the Executive pursuant to the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, (iii) under any indemnification or similar agreement with Executive, or (iv) under this Waiver and Release Agreement.

 

(c)                                   The Executive understands that by signing this Waiver and Release Agreement that he or she is not waiving any claims or administrative charges which cannot be waived by law.  He or she is

 

C-1

 

waiving, however, any right to monetary recovery or individual relief should any federal, state, or local agency (including the Equal Employment Opportunity Commission) pursue any claim on his or her behalf arising out of or related to his or her employment with and/or separation from employment with the Company (other than with respect to those matters described in Section 1(b) of this Waiver and Release Agreement ).

 

(d)                                  The Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Waiver and Release Agreement.

 

2.                                       Acknowledgments.   The Executive is signing this Waiver and Release Agreement knowingly and voluntarily.  He or she acknowledges that:

 

(a)                                  He or she is hereby advised in writing to consult an attorney before signing this Waiver and Release Agreement;

 

(b)                                  He or she has relied solely on his or her own judgment and/or that of his or her attorney regarding the consideration for and the terms of the Waiver and Release Agreement and is signing this Waiver and Release Agreement knowingly and voluntarily of his or her own free will;

 

(c)                                   He or she is not entitled to the Severance Payment unless he or she agrees to and honors the terms of this Waiver and Release Agreement and continues to honor the surviving terms of the Employment Agreement, including, but not limited to, Section 8 (Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement) of the Employment Agreement;

 

(d)                                  He or she has been given at least forty-five (45) calendar days to consider this Waiver and Release Agreement, or he or she expressly waives his or her right to have at least forty-five (45) days to consider this Waiver and Release Agreement;

 

(e)                                   He or she may revoke this Waiver and Release Agreement within seven (7) calendar days after signing it by submitting a written notice of revocation to the Company.  He or she further understands that this Waiver and Release Agreement is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if he or she revokes this Waiver and Release Agreement within the seven (7) day revocation period, he or she will not receive the Severance Payment;

 

(f)                                    He or she has read and understands the Waiver and Release Agreement and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen and unforeseen claims presently asserted or otherwise arising through the date of his or her signing of this Waiver and Release Agreement that he or she may have against the Employer; and

 

C-2

 

(g)                                   No statements made or conduct by the Employer has in any way coerced or unduly influenced him or her to execute this Waiver and Release Agreement.

 

3.                                       No Admission of Liability.   This Waiver and Release Agreement does not constitute an admission of liability or wrongdoing on the part of the Employer; the Employer does not admit there has been any wrongdoing whatsoever against the Executive; and the Employer expressly denies that any wrongdoing has occurred.

 

4.                                       Entire Agreement.   There are no other agreements of any nature between the Employer and the Executive with respect to the matters discussed in this Waiver and Release Agreement, except as expressly stated herein, and in signing this Waiver and Release Agreement, the Executive is not relying on any agreements or representations, except those expressly contained in this Waiver and Release Agreement.

 

5.                                       Execution.   It is not necessary that the Employer sign this Waiver and Release Agreement following the Executive’s full and complete execution of it for it to become fully effective and enforceable.

 

6.                                       Severability.   If any provision of this Waiver and Release Agreement is found, held, or deemed by a court of competent jurisdiction to be void, unlawful, or unenforceable under any applicable statute or controlling law, the remainder of this Waiver and Release Agreement shall continue in full force and effect.

 

7.                                       Governing Law.   This Waiver and Release Agreement shall be governed by the laws of the State of Indiana, excluding the choice of law rules thereof.

 

8.                                       Headings.   Section and subsection headings contained in this Waiver and Release Agreement are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Waiver and Release Agreement for any purpose, and they shall not in any way define or affect the meaning, construction, or scope of any of the provisions hereof.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Waiver and Release Agreement as of the day and year first herein above written.

 

	EXECUTIVE

 

C-3

Exhibit 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into as of July 28, 2014, by and between Kite Realty Group Trust, a Maryland real estate investment trust (the “ Company ”), and Thomas K. McGowan (the “ Executive ”) and shall be effective as of July 1, 2014.

 

WHEREAS, the Executive has been employed by the Company as an executive officer since 2004 pursuant to an employment agreement, dated as of August 16, 2004, and a Noncompetition Agreement, entered into as of August 16, 2004 (together, the “ 2004 Agreements ”) ;

 

WHEREAS, the Company and the Executive desire to continue that relationship on the revised terms set forth in this Agreement, which shall supersede and replace the 2004 Agreements and any amendments thereto;

 

WHEREAS, the Executive shall not be entitled to any future payment contemplated under prior agreements except as specifically provided herein; and

 

WHEREAS, the Board of Trustees of the Company (the “ Board ”) has approved and authorized the entry into this Agreement with the Executive.

 

NOW, THEREFORE, it is AGREED as follows:

 

1.                                       Positions, Duties and Term.   The Company hereby agrees to continue the employment of the Executive as its President and Chief Operating Officer, and the Executive hereby accepts such continuation of his employment, on the terms and conditions set forth below.

 

1.1                                Term.   The Executive’s employment hereunder shall be for a term commencing as of July 1, 2014 and ending as of the earlier of (i) June 30, 2017 or such later date to which the term of this Agreement may be extended pursuant to Section 1.1(a) or (ii) the Termination Date determined in accordance with Section 12.9.

 

(a)                                  Extension of Term.   Unless the Executive’s employment with the Company terminates earlier in accordance with Subsections (c) or (d), or the parties pursuant to Subsection (b) elect not to extend the term, the term of this Agreement automatically shall be extended as of July 1, 2017, and each July 1st thereafter, such that on each such date the term of employment under this Agreement shall be for a one-year period.

 

(b)                                  Election Not to Extend Term.   The Executive or the Board, by written notice delivered to the other, may at any time elect to terminate the automatic extension provision of Subsection (a).  Any such election may be made at any time until the ninety (90) days prior to the date as of which the term would otherwise be extended for an additional one year.  The parties agree that the expiration of this Agreement resulting from the Executive’s notice to the Company in accordance with this Subsection (b) shall not be considered a termination by the Executive for Good Reason or by the Company without Cause under this Agreement; however, the expiration of this Agreement resulting

 

1

 

from the Company’s notice to the Executive in accordance with this Subsection (b) shall be treated as a termination by the Company without Cause under this Agreement.

 

(c)                                   Early Termination.   The Company may terminate the Executive’s employment with or without Cause or on account of Disability, with written notice delivered to the Executive from the Board; provided, that, the Company shall have no right to terminate the Executive’s employment on account of Disability if, in the opinion of a qualified physician reasonably acceptable to the Company, it is reasonably certain that the Executive will be able to resume the Executive’s duties on a regular full-time basis within ninety (90) days of the date the Executive receives notice of such termination on account of Disability.  Any termination in accordance with this Section 1.1(c) shall not be, nor shall it be deemed to be, a breach of this Agreement.

 

(d)                                  Early Resignation.   The Executive may resign from the Company for any reason, including Good Reason.  The Executive shall effect a Good Reason termination by providing at least thirty (30) days’ written notice to the Board of the applicable Good Reason criteria; provided that the Executive provided written notice of the existence of the condition that is the basis for such Good Reason within ninety (90) days of the first occurrence of such condition; and further provided that if the basis for such Good Reason is correctible and the Company corrects the basis for such Good Reason within thirty (30) days after receipt of such notice of the occurrence of the condition, the Good Reason defect shall be cured, and Executive shall not then have the right to terminate his employment for Good Reason with respect to the occurrence addressed in the written notice.  Notwithstanding the prior sentence, in no event may the Executive effect a Good Reason termination for a condition that is the basis for such Good Reason more than one year after the first occurrence of such condition.

 

(e)                                   Termination and Offices Held.   At the time that the Executive ceases to be an employee of the Company, the Executive agrees that he shall resign from any offices he holds with the Company and any affiliate, including any boards of directors or boards of trustees.

 

1.2                                Duties.   The Executive shall faithfully perform for the Company the duties incident to the office of President and Chief Operating Officer and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board, the Executive’s “Reporting Officer” as designated in Schedule 1 and the Company’s Chief Executive Officer (including the performance of services for, and serving on the board of directors of, any affiliate of the Company without any additional compensation).  The Executive shall report to the “Reporting Officer” designated in Schedule 1 subject to the power of the Board or the Chief Executive Officer to change the designated “Reporting Officer.” The Executive shall devote substantially all of the Executive’s business time and effort to the performance of the Executive’s duties hereunder, provided that in no event shall this sentence prohibit the Executive from performing personal and charitable activities and any other activities approved by the Board, so long as such activities do not materially interfere with the Executive’s duties for the Company.  The Board may delegate its authority to take any action under this Agreement to the Compensation Committee of the Board (the “ Committee ”).

 

2

 

2.                                       Compensation .

 

2.1                                Salary.   During the term of his employment under this Agreement, the Company shall pay the Executive at an annual rate of $450,000 (the “ Base Salary ”).  The Base Salary shall be reviewed no less frequently than annually and may be increased at the discretion of the Board or the Committee, as applicable.  Except as otherwise agreed in writing by the Executive, the Base Salary shall not be reduced from the amount previously in effect.  Upon any such increase, the increased amount shall thereafter be deemed to be the Base Salary for purposes of this Agreement.  The Base Salary shall be payable in such installments as shall be consistent with the Company’s payroll procedures for senior executives generally.  Notwithstanding the employment of the Executive by the Company, the Company shall be entitled to pay the Executive from the payroll of any subsidiary of the Company.

 

2.2                                Annual Cash Incentive.   The Executive shall be eligible to receive an annual cash bonus for the Company’s fiscal years ending December 31, 2015 and each December 31 thereafter based on performance objectives established by the Committee each such fiscal year (the “ Annual Cash Incentive ”).  The Executive’s target Annual Cash Incentive amount for such fiscal years will be the percentage of Base Salary designated as the target by the Committee, which amount shall be at least 75% of the Base Salary then in effect for each applicable year (the “ Full-Year Target ”).  Notwithstanding the preceding, the Executive’s Annual Cash Incentive, if any, may be below (including zero), at, or above, the target based upon the achievement of the performance objectives, and payment of any such Annual Cash Incentive shall be in accordance with the terms of such program.  Except as otherwise provided in this Agreement, no Annual Cash Incentive will be payable following the Executive’s Termination Date.

 

2.3                                Equity Awards.   The Executive shall be entitled to participate in the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, and to receive awards of equity (the “ Equity Awards ”) pursuant thereto.  Except as provided in Section 4 and Section 5, all other terms of the equity awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted.

 

2.4                                Benefits.   During the term of his employment under this Agreement, the Executive shall be permitted to participate in any group life, hospitalization or disability insurance plans, health programs, pension and profit sharing plans and similar benefits that may be available to other senior executives of the Company generally, on the same terms as may be applicable to such other executives, in each case to the extent that the Executive is eligible under the terms of such plans or programs.  During the term of his employment under this Agreement, the Company shall maintain customary liability insurance for trustees and officers and list the Executive as a covered officer.

 

2.5                                Vacation.   During the term of his employment under this Agreement, the Executive shall be entitled to vacation in accordance with the Company’s policy.

 

2.6                                Expenses.   The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of pocket expenses actually incurred (and, in the case of reimbursement, paid) by the

 

3

 

Executive during the term of the Executive’s employment under this Agreement, provided that the Executive submits such expenses in accordance with the policies applicable to senior executives of the Company generally.

 

3.                                       Termination for Cause, Executive’s Election Not to Extend Term, or Resignation by the Executive Other than for Good Reason.   In the event of the Executive’s resignation other than for Good Reason, his termination of employment due to his election not to extend the term in accordance with Section 1.1(b), or his termination by the Company for Cause, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.

 

4.                                       Termination On Account of Death or Disability.   In the event of the Executive’s termination of employment with the Company on account of death or Disability, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this termination, (a) within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive (or, in the case of the Executive’s death, the Executive’s beneficiary or, if none has been designated in accordance with Section 10.3, the Executive’s estate), (i) the amount of the Executive’s Compensation Accrued at Termination and (ii) a single sum cash payment equal to the Partial Year Bonus; (b) all Equity Awards held by the Executive, other than any Performance-Based Award (defined in Section 5.3(b)) that is designated an “out-performance” award and that references and proclaims to supersede this Agreement and as to which the provisions of such Equity Award shall control, shall become fully vested and exercisable; (c) the benefits described in Section 5.2; and (d) the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  A Performance-Based Award becoming vested under this Section 4 (rather than pursuant to the Equity Award agreement) shall vest at the target level.

 

5.                                       Termination Without Cause or for Good Reason.   If during the term of his employment under this Agreement, the Executive is terminated by the Company without Cause (which includes the Company’s election not to extend the term of this Agreement in accordance with Section 1.1(b)) or resigns from the Company for Good Reason, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  In addition, in connection with a resignation or termination described in this Section 5, subject to the requirements of Section 5.4, the Executive shall be entitled to the benefits described in Section 5.1, Section 5.2, and to the extent applicable, Section 5.3.

 

4

 

5.1                                Severance and Bonus.   With respect to a termination of employment under this Section 5 only, the benefits under this Section 5.1 shall consist of the following:

 

(a)                                  A single sum severance cash payment equal to three (3) times the sum of: (i) the Executive’s Base Salary in effect on the Termination Date and (ii) the average Annual Cash Incentive actually paid to the Executive with respect to the prior three (3) fiscal years, which shall be paid to the Executive within sixty (60) days of the Executive’s Termination Date; and

 

(b)                                  A single sum cash payment equal to the Partial Year Bonus; provided, that, no amount may be paid under this Section 5.1(b) unless the Company performance criteria for payment of an Annual Cash Incentive are achieved at the level required for a payout at the Full-Year Target level or above as of the close of the fiscal year in which the Termination Date occurs; and provided, further, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control and occurs during the performance year that includes the Change in Control, the Partial Year Bonus shall be payable without regard to achievement of the performance criteria.

 

5.2                                Medical, Prescription, and Dental Benefits.   With respect to a termination of employment under Section 4 and this Section 5 only, the benefits under this Section 5.2 shall consist of continued medical, prescription, and dental benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the welfare benefit plans, practices, policies, and programs provided by the Company to the extent applicable generally to other peer employees of the Company and its affiliated companies, as if the Executive’s employment had not been terminated, for eighteen (18) months after the Executive’s Termination Date; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical, prescription, and dental benefits under another employer-provided plan, the medical, prescription, and dental benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility.

 

5.3                                Accelerated Vesting of Equity Awards.   With respect to a termination of employment under this Section 5 and as otherwise provided in this Employment Agreement, the benefits under this Section 5.3 shall consist of the following:

 

(a)                                  All equity or equity-based awards held by the Executive at termination of employment, including but not limited to, stock options, restricted stock, and restricted stock units, whether or not granted as performance-based awards, and which at the time of termination of employment are subject only to time-vesting based on service (the “ Time Vested Awards ”), shall become fully vested and non-forfeitable to the extent not already so vested;

 

(b)                                  Subject to Section 5.3(c) and the clarification described in the next sentence, with respect to all equity and equity-based awards held by the Executive at termination of employment which are subject to cancellation in the event the stated performance objectives are not satisfied, including but not limited to, stock options, restricted stock, and restricted stock units, and for which at

 

5

 

the time of the Executive’s termination of employment, the performance objectives have not been satisfied (the “ Performance-Based Awards ”), the Performance-Based Awards shall become vested and non-forfeitable on a Pro-Rata Basis, but only if at the end of the performance period, the performance objectives are achieved; provided, however, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control, the Performance-Based Awards outstanding as of such Change in Control and remaining outstanding as of the Executive’s resignation or termination under this Section 5 shall become fully vested and non-forfeitable.  With respect to the provision for vesting and non-forfeiture of an award on a Pro-Rata Basis as described herein, only the performance periods under the award that have already commenced as of the Termination Date shall be taken into account to determine whether the performance objectives ultimately are achieved, and any performance period that has not commenced as of the Termination Date shall be disregarded for purposes of determining whether the award becomes vested and non-forfeitable on a Pro-Rata Basis; and

 

(c)                                   The amount of Performance-Based Awards eligible to become vested under Section 5.3(b) shall be determined by the level of achievement of the performance objectives; provided, however, that if the Performance-Based Award is becoming fully vested and non-forfeitable under Section 5.3(b) on account of a Change in Control, the earnings level shall not be conditioned on awaiting the end of the performance period and achievement of the performance objectives, and instead the performance objectives upon which the earning of the Performance-Based Award is conditioned shall be deemed to have been met at the greater of (i) target level at the Termination Date, or (ii) actual performance at the Termination Date.

 

To the extent that any Performance-Based Award references and proclaims to supersede this Agreement, the provisions of such Equity Awards shall control and supersede this Section 5.3.

 

5.4                                Waiver and Release Agreement.   The Executive agrees to execute at the time of the Executive’s termination of employment a Waiver and Release Agreement in a form provided to the Executive by the Company (the “ Waiver and Release Agreement ”), consistent with the form attached hereto as Exhibit C , the terms and conditions of which are specifically incorporated herein by reference.  The execution and delivery of the Waiver and Release Agreement shall be made within forty-five (45) days of delivery to the Executive of the Waiver and Release Agreement, and the Company shall (a) pay the benefits under Section 5.1(a) and, the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive and (b) in the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, pay the benefits under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive or, if later, at the same time as payment is made to all other participants under the Annual Cash Incentive program following the close of the fiscal year in which the Termination Date occurs.  If the Waiver and Release Agreement is not executed within the forty-five (45)-day period post-delivery, the Executive will forfeit all benefits provided pursuant to Section 5.1, Section 5.2, and Section 5.3.   If the Waiver and Release

 

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Agreement is not received by the Executive within five (5) days of the Executive’s Termination Date it shall not be required and this Section 5.4 shall be null and void.

 

6.                                       Nature of Payments.   For the avoidance of doubt, the Executive acknowledges and agrees that the payments set forth in Section 3, Section 4, and Section 5 constitute liquidated damages for termination of his employment during the term of this Agreement (including any extensions thereof).

 

7.                                       Golden Parachute Excise Tax Provisions.   In the event it is determined that any payment or benefit (within the meaning of Section 280G(B)(2) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), to the Executive or for his or her benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his or her employment (“ Payments ”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “ Excise Tax ”), then the total Payments shall be reduced to the extent the payment of such amounts would cause the Executive’s total termination benefits to constitute an “excess parachute payment” under Section 280G of the Code and by reason of such excess parachute payment the Executive would be subject to an excise tax under Section 4999(a) of the Code, but only if the Executive (or the Executive’s tax advisor) determines that the after-tax value of the termination benefits calculated with the foregoing restriction exceed those calculated without the foregoing restriction.  In that event, the Executive shall designate those rights, payments, or benefits under this Agreement, any other agreements, and any benefit arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Executive under this Agreement be deemed to be an excess parachute payment; provided, however, that in order to comply with Section 409A of the Code, the reduction or elimination will be performed in the order in which each dollar of value subject to a right, payment, or benefit reduces the parachute payment to the greatest extent.  Except as otherwise expressly provided herein, all determinations under this Section 7 shall be made at the expense of the Company by a nationally recognized public accounting or consulting firm selected by the Company and subject to the approval of the Executive, which approval shall not be unreasonably withheld.  Such determination shall be binding upon the Executive and the Company.

 

7.1                                Company Withholding.   Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the determinations in the paragraph above, an Excise Tax will be imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

 

8.                                       Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement.

 

8.1                                Confidential Information.   The Executive acknowledges that, during the course of his employment with the Company, the Executive has been given or has become acquainted with

 

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Confidential Information (as hereinafter defined) of the Company and may continue to be given or become acquainted with Confidential Information.  As used in this Section 8.1, “ Confidential Information ” of the Company means all confidential information, knowledge, or data relating to the Company or any of its affiliates, or to the Company’s or any such affiliate’s respective businesses and investments (including confidential information of others that has come into the possession of the Company or any such affiliate), learned by the Executive heretofore or hereafter directly or indirectly from the Company or any of its affiliates and which is not generally available lawfully and without breach of confidential or other fiduciary obligation to the general public without restriction, except with the Company’s express written consent or as may otherwise be required by law or any legal process.

 

The Executive acknowledges that the Confidential Information of the Company, as such may exist from time to time, is a valuable, confidential, special, and unique asset of the Company and its affiliates, expensive to produce and maintain, and essential for the profitable operation of their respective businesses.  The Executive agrees that, during the course of his employment with the Company, or at any time thereafter, he shall not, directly or indirectly, communicate, disclose, or divulge to any Person (as such term is hereinafter defined), or use for his benefit or the benefit of any Person, in any manner, any Confidential Information of the Company or its affiliates, acquired during his employment with the Company or any other confidential information concerning the conduct and details of the businesses of the Company and its affiliates, except as required in the course of his employment with the Company or as otherwise may be required by law.  For the purposes of this Agreement, “ Person ” shall mean any individual, partnership, corporation, trust, unincorporated association, joint venture, limited liability company, or other entity or any government, governmental agency, or political subdivision.

 

All documents relating to the businesses of the Company and its affiliates including, without limitation, Confidential Information of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, are the exclusive property of the Company and such respective affiliates and must not be removed from the premises of the Company, except as required in the course of the Executive’s employment with the Company.  The Executive shall return all such documents (including any copies thereof) to the Company when the Executive ceases to be employed by the Company or upon the earlier request of the Company or the Board.

 

8.2                                Noncompetition.   During the term of this Agreement (including any extensions thereof) and, subject to the penultimate sentence of this Section 8.2, for a period of eighteen (18) months following the termination of the Executive’s employment under this Agreement for any reason (the “ Restricted Period ”), the Executive shall not, except with the Company’s express prior written consent, (a) directly or indirectly, engage in any business involving real property development, construction, acquisition, ownership, or operation, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, director, trustee, officer, employee, or independent contractor of any Person or (b) own any interests in real property which are competitive, directly or indirectly, with any business carried on by the Company; provided, however, that this Section 8.2 shall

 

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not be deemed to prohibit any of the following: (i) any of the real estate (and real estate-related) activities listed on Exhibit A hereto, the Executive’s ownership, marketing, sale, transfer, or exchange of any of the Executive’s interests in any of the properties or entities listed on Exhibit A hereto, or any other permitted activities listed on Exhibit A hereto; and (ii) the direct or indirect ownership by the Executive of up to five percent (5%) of the outstanding equity interests of any public company.  Notwithstanding the foregoing, during the eighteen (18)-month “tail” period included in the Restricted Period, the restrictions set forth in this Section 8.2 shall apply only (i) with respect to any Person that has been designated as being part of the Company’s peer group, as determined by the Committee and set forth in the most recent proxy statement filed by the Company, or (ii) with respect to any other Person that owns neighborhood or community shopping centers and with respect to (i) and (ii) only within the following “ Restricted Areas ”: (A) the states of Indiana, Florida, and Texas; (B) the area within a ten (10)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date; (C) each county in each state in which the Company owns or leases property as of the Executive’s Termination Date; and (D) in any state in which the Company owns or leases at least five (5) properties as of the Executive’s Termination Date, the area within a fifty (50)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date.  Notwithstanding anything to the contrary in this Section 8.2, during the period beginning twelve (12) months following a Change in Control consummated on or after the date of signing this Agreement (the “ Effective Time ”), and ending twelve (12) months after such Effective Time, the Executive may resign without Good Reason, and this Section 8.2 shall not apply.  For the avoidance of doubt, this Section 8.2 shall apply in all events if the Executive’s resignation is on account of Good Reason or if the Executive is terminated by the Company for any reason whether before or following a Change in Control.

 

8.3                                Non-Solicitation.   During the term of this Agreement (including any extensions thereof) and for a period of two (2) years following the termination of the Executive’s employment under this Agreement for any reason, the Executive shall not, except with the Company’s express prior written consent, for the benefit of any entity or Person (including the Executive) (a) solicit, induce, or encourage any employee of the Company, or any of its affiliates, to leave the employment of the Company, or solicit, induce, or encourage any customer, client, or independent contractor of the Company, or any of its affiliates, to cease or reduce its business with or services rendered to the Company or its affiliates or (b) hire (on behalf of the Executive or any other person or entity) any employee or independent contractor who has left the employment or other service of the Company (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with the Company.

 

8.4                                Cooperation With Regard to Litigation.   The Executive agrees to cooperate with the Company, during the term and thereafter (including following the Executive’s termination of employment for any reason), by making himself available to testify on behalf of the Company or any affiliate of the Company, in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Company, or any affiliate of the Company, in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board or its representatives

 

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or counsel, or representatives or counsel to the Company or any affiliate of the Company, as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations.  The Company agrees to reimburse the Executive, on an after-tax basis, for all reasonable expenses actually incurred in connection with his provision of testimony or assistance.

 

8.5                                Non-Disparagement.   The Executive shall not, at any time during the term of his employment and thereafter disparage the Company, its affiliates or their respective officers, directors or trustees, nor shall the Company, its affiliates or their respective officers, directors or trustees disparage Executive.  Notwithstanding the foregoing, nothing in this Agreement shall preclude the Executive or his successor or members of the Board from making truthful statements that are required by applicable law, regulation or legal process.

 

8.6                                Survival.   The provisions of this Section 8 shall survive any termination or expiration of this Agreement.

 

8.7                                Remedies.   The Executive agrees that any breach of the terms of this Section 8 would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; the Executive therefore also agrees that, in the event of said breach or any threat of breach and notwithstanding Section 9, the Company shall be entitled to an immediate injunction and restraining order from a court of competent jurisdiction to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to prove damages.  The availability of injunctive relief shall be in addition to any other remedies to which the Company may be entitled at law or in equity, but remedies other than injunctive relief may only be pursued in an arbitration brought in accordance with Section 9.  The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach of this Section 8, including but not limited to the recovery of damages from the Executive.

 

9.                                       Governing Law; Disputes; Arbitration.

 

9.1                                Governing Law.   This Agreement is governed by and is to be construed, administered, and enforced in accordance with the laws of the State of Indiana, without regard to conflicts of law principles.  If under the governing law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law, such portion shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is not possible, to be omitted from this Agreement.  The invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion hereof.  If any court determines that any provision of Section 8 is unenforceable because of the duration or geographic scope of such provision, it is the parties’ intent that such court shall have the power to modify the duration or geographic scope of such provision, as the case may be, to the extent necessary to render the provision enforceable, and in its modified form, such provision shall be enforced.  If the courts of any one or more of jurisdictions hold Section 8 to be wholly unenforceable by reason of breadth of scope or otherwise, it is the intention of

 

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the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided above in the courts of any other jurisdiction within the geographical scope of the provisions of Section 8, as to breaches of such provisions in such other respective jurisdictions, such provisions as they relate to each jurisdiction’s being, for this purpose, severable, diverse, and independent covenants, subject, where appropriate, to the doctrine of res judicata.

 

9.2                                Arbitration.   Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Indianapolis, Indiana by three (3) arbitrators.  The Executive and the Company shall each select one arbitrator and those two designated arbitrators shall select a third arbitrator.  The arbitration shall not be administered by the American Arbitration Association; however, the arbitration shall be conducted by the three selected arbitrators using the procedural rules of the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, the Company and the Executive hereby consent to the jurisdiction of any or all of the following courts:  (i) the United States District Court for the Southern District of Indiana, (ii) any of the courts of the State of Indiana, or (iii) any other court having jurisdiction.  The Company and the Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  The Company and the Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 9.  Notwithstanding any provision in this Section 9, the Executive shall be paid compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

9.3                                WAIVER OF JURY TRIAL.   TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

10.                                Miscellaneous.

 

10.1                         Integration.   This Agreement cancels and supersedes any and all prior agreements and understandings between the parties hereto with respect to the employment of the Executive by the Company, any parent or predecessor company, and the Company’s affiliates during the term, but excluding existing contracts relating to compensation under executive compensation and employment benefit plans of the Company and its affiliates.  This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision

 

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hereof shall be effective unless in writing and signed by the parties hereto.  The Executive shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by the Executive under such prior agreements and understandings or under any benefit or compensation plan of the Company.

 

10.2                         Successors; Transferability.   The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not the corporate existence of the Company continues) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “ Company ” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise, and in the case of an acquisition of the Company in which the corporate existence of the Company continues, the ultimate parent company following such acquisition.  Subject to the foregoing, the Company may transfer and assign this Agreement and the Company’s rights and obligations hereunder to another entity that is substantially comparable to the Company in its financial strength and ability to perform the Company’s obligations under this Agreement.  Neither this Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or assignable by the Executive, except in accordance with the laws of the descent and distribution or as specified in Section 10.3.

 

10.3                         Beneficiaries.   The Executive shall be entitled to designate (and change, to the extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or benefits provided hereunder following the Executive’s death.

 

10.4                         No Duty to Mitigate.   The Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor will any payments or benefits hereunder be subject to offset in the event the Executive does mitigate, except as provided in Section 5.2.

 

10.5                         Notices.   Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express or other similar overnight service or by certified or registered mail, return receipt requested, postage prepaid and addressed to such party at the address set forth below or at such address as may be designated by such party by like notice:

 

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If to the Company or the Board:

 

Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

Attn: Compensation Committee of the Board of Trustees, Chairperson

 

With a copy to:

 

Hogan Lovells US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Attn: David Bonser, Esq.

 

If to Executive, to the address set forth in the records of the Company.

 

If the parties by mutual agreement supply each other with fax numbers for the purpose of providing notice by facsimile, such notice shall also be proper notice under this Agreement.  Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered (i) two (2) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, (ii) when received if it is sent by fax communication during normal business hours on a business day or one business day after it is sent by fax and received if sent other than during business hours on a business day, (iii) one business day after it is sent via a reputable overnight courier service, charges prepaid, or (iv) when received if it is delivered by hand.

 

10.6                         Headings.   The headings of this Agreement are for convenience of reference only and do not constitute a part hereof.

 

10.7                         Attorneys’ Fees.   In the event of any legal proceeding relating to this Agreement or any term or provision thereof, the losing party shall be responsible to pay or reimburse the prevailing party for all reasonable attorneys’ fees incurred by the prevailing party in connection with such proceeding; provided, however, the Executive shall not be required to pay or reimburse the Company unless the claim or defense asserted by the Executive was unreasonable.

 

10.8                         No General Waivers.   The failure of any party at any time to require performance by any other party of any provision hereof or to resort to any remedy provided herein or at law or in equity shall in no way affect the right of such party to require such performance or to resort to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the provisions hereof be deemed to be a waiver of any subsequent breach of such provisions.  No such waiver shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.

 

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10.9                         Offsets; Withholding.   The amounts required to be paid by the Company to the Executive pursuant to this Agreement shall not be subject to offset.  The foregoing and other provisions of this Agreement notwithstanding, all payments to be made to Executive under this Agreement, including under Section 3, Section 4, and Section 5, or otherwise by the Company, will be subject to withholding to satisfy required withholding taxes and other required deductions.

 

10.10                  Counterparts.   This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

10.11                  Representations of the Executive.   The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which prevents him from entering into this Agreement or performing all of his obligations hereunder.

 

10.12                  Conflicting Terms.   Except as provided in Section 4 and Section 5.3, in the event of any conflict between the terms of this Agreement and the terms of any other compensation plan, agreement or award (including, without limitation, any annual or long term bonus and any equity based award), the terms and conditions of this Agreement shall govern and control.

 

11.                                Section 409A Savings Provisions.   It is intended that the payments and benefits provided under this Agreement shall be exempt from the application of the requirements of Section 409A of the Code and the regulations and other guidance issued thereunder (collectively, “ Section 409A ”). Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible.

 

11.1                         Separation from Service.   The Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A.

 

11.2                         Specified Employee Provisions.   Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “ Delay Period ”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such Delay Period (or upon the

 

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Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.  To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

 

11.3                         Expense Reimbursements.   (a) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred; (b) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit; and (c) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

 

12.                                Definitions Relating to Termination Events.

 

12.1                         Affiliate.   For purposes of this Agreement, an “ affiliate ” of any person means another person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person, and includes subsidiaries.  Notwithstanding the foregoing, the persons listed on Exhibit B , as such Exhibit B is updated from time to time by the mutual agreement of the parties, shall not be affiliates of the Company.

 

12.2                         Cause.   For purposes of this Agreement, “ Cause ” shall mean Executive’s:

 

(a)                                  Conviction for (or pleading nolo contendere to) any felony;

 

(b)                                  Commission of any act of fraud, theft, or dishonesty related to the business of the Company or its affiliates or the performance of the Executive’s duties hereunder;

 

(c)                                   Willful and continuing failure or habitual neglect by the Executive to perform the Executive’s duties hereunder;

 

(d)                                  Material violation of the covenants contained in Section 8; or

 

(e)                                   Willful and continuing material breach of this Agreement.

 

For purposes of this Section 12.2, no act, or failure to act, by the Executive shall be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company or its affiliates.

 

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12.3                         Change in Control.   For purposes of this Agreement, “ Change in Control ” shall mean:

 

(a)                                  The dissolution or liquidation of the Company;

 

(b)                                  The merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity or immediately following which the persons or entities who were beneficial owners (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of voting securities of the Company immediately prior thereto cease to beneficially own more than fifty percent (50%) of the voting securities of the surviving entity immediately thereafter;

 

(c)                                   A sale of all or substantially all of the assets of the Company to another person or entity;

 

(d)                                  Any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) that results in any person or entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than persons who are shareholders or affiliates immediately prior to the transaction) owning thirty percent (30%) or more of the combined voting power of all classes of shares of the Company; or

 

(e)                                   Individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a trustee subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for trustee, without written objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or contests by or on behalf of a person other than the Board.

 

12.4                         Compensation Accrued at Termination.   For purposes of this Agreement, “ Compensation Accrued at Termination ” means the following:

 

(a)                                  The unpaid portion of annual Base Salary at the rate payable, in accordance with Section 2.1 hereof, at the Executive’s Termination Date, pro-rated through such Termination Date, payable in accordance with the Company’s regular pay schedule;

 

(b)                                  Payment for vacation accrued under this Agreement but unused as of the Executive’s Termination Date;

 

(c)                                   Except in the event the Executive’s employment is terminated for Cause (except to the extent otherwise required by law), all earned and unpaid and/or vested, nonforfeitable amounts

 

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owing or accrued at the Executive’s Termination Date under any compensation and benefit plans, programs, and arrangements set forth or referred to in Sections 2.2 and 2.3 hereof (including any earned and vested Annual Cash Incentive which the Company agrees is earned for purposes of this definition as of the close of business on the last day of the fiscal year) in which the Executive theretofore participated, payable (except as otherwise provided in Section 3, Section 4 and Section 5 of this Agreement) in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued; and

 

(d)                                  Reasonable business expenses and disbursements incurred by the Executive prior to the Executive’s termination of employment, to be reimbursed to the Executive, as authorized under Section 2.6, in accordance with the Company’s reimbursement policies as in effect at the Executive’s Termination Date.

 

12.5                         Disability.   For purposes of this Agreement, “ Disability ” means the Executive becomes eligible for disability benefits under the Company’s long-term disability plans and arrangements (or, if none apply, would have been so eligible under the most recent plan or arrangement).  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, Section 409A of the Code, and other applicable law.

 

12.6                         Good Reason.   For purposes of this Agreement, “ Good Reason ” shall mean, without the Executive’s express written consent, the occurrence of any of the following circumstances:

 

(a)                                  The material reduction of the Executive’s authority, duties, and responsibilities, or the assignment to the Executive of duties materially and adversely inconsistent with the Executive’s position or positions with the Company and its affiliates;

 

(b)                                  A material reduction in Base Salary of the Executive except in connection with a reduction in compensation generally applicable to senior management employees of the Company;

 

(c)                                   The Company requiring the Executive to relocate his principal place of business for the Company to a location more than fifty (50) miles from the Company’s principal place of business in Indianapolis, Indiana;

 

(d)                                  The failure by the Company to obtain an agreement in form and substance reasonably satisfactory to the Executive from any successor to the business of the Company to assume and agree to perform this Agreement; or

 

(e)                                   The Company’s material breach of this Agreement.

 

12.7                         Partial Year Bonus.   For purposes of this Agreement, “ Partial Year Bonus ” shall mean an amount equal to the product of (a) the Executive’s Full-Year Target Annual Cash Incentive for the fiscal year in which the Executive’s employment terminates and (b) a fraction, the numerator of which is the

 

17

 

number of days in the current fiscal year through the Executive’s Termination Date, and the denominator of which is 365.

 

12.8                         Pro-Rata Basis.   For purposes of this Agreement, vesting on a “ Pro-Rata Basis ” shall mean vesting in an amount equal to a fraction not to exceed one (1), the numerator of which is the number of days the Executive was employed by the Company from the grant date for such award to the Termination Date, and the denominator of which is the number of total days from the grant date to the date that otherwise would have resulted in full vesting of the award.

 

12.9                         Termination Date.   For purposes of this Agreement, “ Termination Date ” shall mean:

 

(a)                                  The date that the Board delivers written notice to the Executive of his termination of employment for Cause or on account of Disability;

 

(b)                                  The date set forth in a written notice delivered to the Executive of his termination of employment without Cause, which shall not be less than thirty (30) days after the date of such notice or more than sixty (60) days after the date of such notice;

 

(c)                                   The date set forth in a written notice delivered to the Board of the Executive’s resignation, with or without Good Reason, which shall not be less than thirty (30) days after the date of such notice, except as otherwise mutually agreed to by the Company and the Executive;

 

(d)                                  The June 30 th  following the date that the Executive or the Board provides the other party with notice of an election to terminate the automatic extension provision of Section 1.1(a), except as otherwise mutually agreed to by the Company and the Executive; or

 

(e)                                   The date of the Executive’s death.

 

18

 

IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first written above.

 

		KITE REALTY GROUP TRUST
		By:	/s/ John A. Kite
		Name:	JOHN A. KITE
		Title:	CHIEF EXECUTIVE OFFICER
		EXECUTIVE
		/s/ Thomas K. McGowan
		THOMAS K. MCGOWAN

 

19

 

SCHEDULE 1

 

REPORTING OFFICER

 

A-1

 

EXHIBIT A

 

EXCLUDED ACTIVITIES, PROPERTIES, AND INTERESTS

 

A-2

 

EXHIBIT B

 

EXCLUSION FROM AFFILIATES

 

B-1

 

EXHIBIT C

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT is entered into as of [ TO BE DETERMINATED AT TERMINATION OF EMPLOYMENT ] , by Thomas K. McGowan (the “ Executive ”) in consideration of the severance pay and severance benefits to be provided to the Executive by Kite Realty Group Trust (the “ Company ”) pursuant to Section 5 of the Executive Employment Agreement (the “ Employment Agreement ”) by and between the Company and the Executive (the “ Severance Payment ”).

 

1.                                       Waiver and Release.

 

(a)                                  Subject to Section 1(b) of this Waiver and Release Agreement, the Executive, on his or her own behalf and on behalf of his or her heirs, executors, administrators, attorneys, and assigns, hereby unconditionally and irrevocably releases, waives, and forever discharges the Company and each of its affiliates, parents, successors, predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “ Employer ”), from any and all causes of action, claims, and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of his or her signing of the Waiver and Release Agreement, concerning his or her employment or separation from employment.  Subject to Section 1(b) of this Waiver and Release Agreement, this release includes, but is not limited to, any payments, benefits, or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended); any claim arising under any state or local laws, ordinances, or regulations (including, but not limited to, any state or local laws, ordinances, or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy, or loss of consortium.

 

(b)                                  Notwithstanding any other provision of this Waiver and Release Agreement to the contrary, this Waiver and Release Agreement does not encompass, and Executive does not release, waive or discharge, the obligations of the Company (i) to make the payments and provide the other benefits contemplated by the Employment Agreement or any other agreement with Executive, (ii) under any award agreement entered into with the Executive pursuant to the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, (iii) under any indemnification or similar agreement with Executive, or (iv) under this Waiver and Release Agreement.

 

(c)                                   The Executive understands that by signing this Waiver and Release Agreement that he or she is not waiving any claims or administrative charges which cannot be waived by law.  He or she is

 

C-1

 

waiving, however, any right to monetary recovery or individual relief should any federal, state, or local agency (including the Equal Employment Opportunity Commission) pursue any claim on his or her behalf arising out of or related to his or her employment with and/or separation from employment with the Company (other than with respect to those matters described in Section 1(b) of this Waiver and Release Agreement ).

 

(d)                                  The Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Waiver and Release Agreement.

 

2.                                       Acknowledgments.   The Executive is signing this Waiver and Release Agreement knowingly and voluntarily.  He or she acknowledges that:

 

(a)                                  He or she is hereby advised in writing to consult an attorney before signing this Waiver and Release Agreement;

 

(b)                                  He or she has relied solely on his or her own judgment and/or that of his or her attorney regarding the consideration for and the terms of the Waiver and Release Agreement and is signing this Waiver and Release Agreement knowingly and voluntarily of his or her own free will;

 

(c)                                   He or she is not entitled to the Severance Payment unless he or she agrees to and honors the terms of this Waiver and Release Agreement and continues to honor the surviving terms of the Employment Agreement, including, but not limited to, Section 8 (Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement) of the Employment Agreement;

 

(d)                                  He or she has been given at least forty-five (45) calendar days to consider this Waiver and Release Agreement, or he or she expressly waives his or her right to have at least forty-five (45) days to consider this Waiver and Release Agreement;

 

(e)                                   He or she may revoke this Waiver and Release Agreement within seven (7) calendar days after signing it by submitting a written notice of revocation to the Company.  He or she further understands that this Waiver and Release Agreement is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if he or she revokes this Waiver and Release Agreement within the seven (7) day revocation period, he or she will not receive the Severance Payment;

 

(f)                                    He or she has read and understands the Waiver and Release Agreement and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen and unforeseen claims presently asserted or otherwise arising through the date of his or her signing of this Waiver and Release Agreement that he or she may have against the Employer; and

 

C-2

 

(g)                                   No statements made or conduct by the Employer has in any way coerced or unduly influenced him or her to execute this Waiver and Release Agreement.

 

3.                                       No Admission of Liability.   This Waiver and Release Agreement does not constitute an admission of liability or wrongdoing on the part of the Employer; the Employer does not admit there has been any wrongdoing whatsoever against the Executive; and the Employer expressly denies that any wrongdoing has occurred.

 

4.                                       Entire Agreement.   There are no other agreements of any nature between the Employer and the Executive with respect to the matters discussed in this Waiver and Release Agreement, except as expressly stated herein, and in signing this Waiver and Release Agreement, the Executive is not relying on any agreements or representations, except those expressly contained in this Waiver and Release Agreement.

 

5.                                       Execution.   It is not necessary that the Employer sign this Waiver and Release Agreement following the Executive’s full and complete execution of it for it to become fully effective and enforceable.

 

6.                                       Severability.   If any provision of this Waiver and Release Agreement is found, held, or deemed by a court of competent jurisdiction to be void, unlawful, or unenforceable under any applicable statute or controlling law, the remainder of this Waiver and Release Agreement shall continue in full force and effect.

 

7.                                       Governing Law.   This Waiver and Release Agreement shall be governed by the laws of the State of Indiana, excluding the choice of law rules thereof.

 

8.                                       Headings.   Section and subsection headings contained in this Waiver and Release Agreement are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Waiver and Release Agreement for any purpose, and they shall not in any way define or affect the meaning, construction, or scope of any of the provisions hereof.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Waiver and Release Agreement as of the day and year first herein above written.

 

	EXECUTIVE

 

C-3

Exhibit 10.4

 

EXECUTION COPY

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into as of July 28, 2014, by and between Kite Realty Group Trust, a Maryland real estate investment trust (the “ Company ”), and Daniel R. Sink (the “ Executive ”) and shall be effective as of July 1, 2014.

 

WHEREAS, the Executive has been employed by the Company as an executive officer since 2004 pursuant to an employment agreement, dated as of August 16, 2004, and a Noncompetition Agreement, entered into as of August 16, 2004 (together, the “ 2004 Agreements ”) ;

 

WHEREAS, the Company and the Executive desire to continue that relationship on the revised terms set forth in this Agreement, which shall supersede and replace the 2004 Agreements and any amendments thereto;

 

WHEREAS, the Executive shall not be entitled to any future payment contemplated under prior agreements except as specifically provided herein; and

 

WHEREAS, the Board of Trustees of the Company (the “ Board ”) has approved and authorized the entry into this Agreement with the Executive.

 

NOW, THEREFORE, it is AGREED as follows:

 

1.                                       Positions, Duties and Term.   The Company hereby agrees to continue the employment of the Executive as its Executive Vice President and Chief Financial Officer, and the Executive hereby accepts such continuation of his employment, on the terms and conditions set forth below.

 

1.1                                Term.   The Executive’s employment hereunder shall be for a term commencing as of July 1, 2014 and ending as of the earlier of (i) June 30, 2017 or such later date to which the term of this Agreement may be extended pursuant to Section 1.1(a) or (ii) the Termination Date determined in accordance with Section 12.9.

 

(a)                                  Extension of Term.   Unless the Executive’s employment with the Company terminates earlier in accordance with Subsections (c) or (d), or the parties pursuant to Subsection (b) elect not to extend the term, the term of this Agreement automatically shall be extended as of July 1, 2017, and each July 1st thereafter, such that on each such date the term of employment under this Agreement shall be for a one-year period.

 

(b)                                  Election Not to Extend Term.   The Executive or the Board, by written notice delivered to the other, may at any time elect to terminate the automatic extension provision of Subsection (a).  Any such election may be made at any time until the ninety (90) days prior to the date as of which the term would otherwise be extended for an additional one year.  The parties agree that the expiration of this Agreement resulting from the Executive’s notice to the Company in accordance with this Subsection (b) shall not be considered a termination by the Executive for Good Reason or by the Company without Cause under this Agreement; however, the expiration of this Agreement resulting

 

1

 

from the Company’s notice to the Executive in accordance with this Subsection (b) shall be treated as a termination by the Company without Cause under this Agreement.

 

(c)                                   Early Termination.   The Company may terminate the Executive’s employment with or without Cause or on account of Disability, with written notice delivered to the Executive from the Board; provided, that, the Company shall have no right to terminate the Executive’s employment on account of Disability if, in the opinion of a qualified physician reasonably acceptable to the Company, it is reasonably certain that the Executive will be able to resume the Executive’s duties on a regular full-time basis within ninety (90) days of the date the Executive receives notice of such termination on account of Disability.  Any termination in accordance with this Section 1.1(c) shall not be, nor shall it be deemed to be, a breach of this Agreement.

 

(d)                                  Early Resignation.   The Executive may resign from the Company for any reason, including Good Reason.  The Executive shall effect a Good Reason termination by providing at least thirty (30) days’ written notice to the Board of the applicable Good Reason criteria; provided that the Executive provided written notice of the existence of the condition that is the basis for such Good Reason within ninety (90) days of the first occurrence of such condition; and further provided that if the basis for such Good Reason is correctible and the Company corrects the basis for such Good Reason within thirty (30) days after receipt of such notice of the occurrence of the condition, the Good Reason defect shall be cured, and Executive shall not then have the right to terminate his employment for Good Reason with respect to the occurrence addressed in the written notice.  Notwithstanding the prior sentence, in no event may the Executive effect a Good Reason termination for a condition that is the basis for such Good Reason more than one year after the first occurrence of such condition.

 

(e)                                   Termination and Offices Held.   At the time that the Executive ceases to be an employee of the Company, the Executive agrees that he shall resign from any offices he holds with the Company and any affiliate, including any boards of directors or boards of trustees.

 

1.2                                Duties.   The Executive shall faithfully perform for the Company the duties incident to the office of Executive Vice President and Chief Financial Officer and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board, the Executive’s “Reporting Officer” as designated in Schedule 1 and the Company’s Chief Executive Officer (including the performance of services for, and serving on the board of directors of, any affiliate of the Company without any additional compensation).  The Executive shall report to the “Reporting Officer” designated in Schedule 1 subject to the power of the Board or the Chief Executive Officer to change the designated “Reporting Officer.” The Executive shall devote substantially all of the Executive’s business time and effort to the performance of the Executive’s duties hereunder, provided that in no event shall this sentence prohibit the Executive from performing personal and charitable activities and any other activities approved by the Board, so long as such activities do not materially interfere with the Executive’s duties for the Company.  The Board may delegate its authority to take any action under this Agreement to the Compensation Committee of the Board (the “ Committee ”).

 

2

 

2.                                       Compensation .

 

2.1                                Salary.   During the term of his employment under this Agreement, the Company shall pay the Executive at an annual rate of $400,000 (the “ Base Salary ”).  The Base Salary shall be reviewed no less frequently than annually and may be increased at the discretion of the Board or the Committee, as applicable.  Except as otherwise agreed in writing by the Executive, the Base Salary shall not be reduced from the amount previously in effect.  Upon any such increase, the increased amount shall thereafter be deemed to be the Base Salary for purposes of this Agreement.  The Base Salary shall be payable in such installments as shall be consistent with the Company’s payroll procedures for senior executives generally.  Notwithstanding the employment of the Executive by the Company, the Company shall be entitled to pay the Executive from the payroll of any subsidiary of the Company.

 

2.2                                Annual Cash Incentive.   The Executive shall be eligible to receive an annual cash bonus for the Company’s fiscal years ending December 31, 2015 and each December 31 thereafter based on performance objectives established by the Committee each such fiscal year (the “ Annual Cash Incentive ”).  The Executive’s target Annual Cash Incentive amount for such fiscal years will be the percentage of Base Salary designated as the target by the Committee, which amount shall be at least 75% of the Base Salary then in effect for each applicable year (the “ Full-Year Target ”).  Notwithstanding the preceding, the Executive’s Annual Cash Incentive, if any, may be below (including zero), at, or above, the target based upon the achievement of the performance objectives, and payment of any such Annual Cash Incentive shall be in accordance with the terms of such program.  Except as otherwise provided in this Agreement, no Annual Cash Incentive will be payable following the Executive’s Termination Date.

 

2.3                                Equity Awards.   The Executive shall be entitled to participate in the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, and to receive awards of equity (the “ Equity Awards ”) pursuant thereto.  Except as provided in Section 4 and Section 5, all other terms of the equity awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted.

 

2.4                                Benefits.   During the term of his employment under this Agreement, the Executive shall be permitted to participate in any group life, hospitalization or disability insurance plans, health programs, pension and profit sharing plans and similar benefits that may be available to other senior executives of the Company generally, on the same terms as may be applicable to such other executives, in each case to the extent that the Executive is eligible under the terms of such plans or programs.  During the term of his employment under this Agreement, the Company shall maintain customary liability insurance for trustees and officers and list the Executive as a covered officer.

 

2.5                                Vacation.   During the term of his employment under this Agreement, the Executive shall be entitled to vacation in accordance with the Company’s policy.

 

2.6                                Expenses.   The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of pocket expenses actually incurred (and, in the case of reimbursement, paid) by the

 

3

 

Executive during the term of the Executive’s employment under this Agreement, provided that the Executive submits such expenses in accordance with the policies applicable to senior executives of the Company generally.

 

3.                                       Termination for Cause, Executive’s Election Not to Extend Term, or Resignation by the Executive Other than for Good Reason.   In the event of the Executive’s resignation other than for Good Reason, his termination of employment due to his election not to extend the term in accordance with Section 1.1(b), or his termination by the Company for Cause, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.

 

4.                                       Termination On Account of Death or Disability.   In the event of the Executive’s termination of employment with the Company on account of death or Disability, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this termination, (a) within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive (or, in the case of the Executive’s death, the Executive’s beneficiary or, if none has been designated in accordance with Section 10.3, the Executive’s estate), (i) the amount of the Executive’s Compensation Accrued at Termination and (ii) a single sum cash payment equal to the Partial Year Bonus; (b) all Equity Awards held by the Executive, other than any Performance-Based Award (defined in Section 5.3(b)) that is designated an “out-performance” award and that references and proclaims to supersede this Agreement and as to which the provisions of such Equity Award shall control, shall become fully vested and exercisable; (c) the benefits described in Section 5.2; and (d) the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  A Performance-Based Award becoming vested under this Section 4 (rather than pursuant to the Equity Award agreement) shall vest at the target level.

 

5.                                       Termination Without Cause or for Good Reason.   If during the term of his employment under this Agreement, the Executive is terminated by the Company without Cause (which includes the Company’s election not to extend the term of this Agreement in accordance with Section 1.1(b)) or resigns from the Company for Good Reason, all obligations of the Company under Sections 1 and 2 will immediately cease as of the Executive’s Termination Date.  In connection with this resignation or termination, within ten (10) days of the Executive’s Termination Date, the Company will pay the Executive the amount of the Executive’s Compensation Accrued at Termination, and the Executive’s rights, if any, under any Company benefit plan or program shall be governed by such plan or program.  In addition, in connection with a resignation or termination described in this Section 5, subject to the requirements of Section 5.4, the Executive shall be entitled to the benefits described in Section 5.1, Section 5.2, and to the extent applicable, Section 5.3.

 

4

 

5.1                                Severance and Bonus.   With respect to a termination of employment under this Section 5 only, the benefits under this Section 5.1 shall consist of the following:

 

(a)                                  A single sum severance cash payment equal to two (2) times the sum of: (i) the Executive’s Base Salary in effect on the Termination Date and (ii) the average Annual Cash Incentive actually paid to the Executive with respect to the prior three (3) fiscal years, which shall be paid to the Executive within sixty (60) days of the Executive’s Termination Date; and

 

(b)                                  A single sum cash payment equal to the Partial Year Bonus; provided, that, no amount may be paid under this Section 5.1(b) unless the Company performance criteria for payment of an Annual Cash Incentive are achieved at the level required for a payout at the Full-Year Target level or above as of the close of the fiscal year in which the Termination Date occurs; and provided, further, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control and occurs during the performance year that includes the Change in Control, the Partial Year Bonus shall be payable without regard to achievement of the performance criteria.

 

5.2                                Medical, Prescription, and Dental Benefits.   With respect to a termination of employment under Section 4 and this Section 5 only, the benefits under this Section 5.2 shall consist of continued medical, prescription, and dental benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the welfare benefit plans, practices, policies, and programs provided by the Company to the extent applicable generally to other peer employees of the Company and its affiliated companies, as if the Executive’s employment had not been terminated, for eighteen (18) months after the Executive’s Termination Date; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical, prescription, and dental benefits under another employer-provided plan, the medical, prescription, and dental benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility.

 

5.3                                Accelerated Vesting of Equity Awards.   With respect to a termination of employment under this Section 5 and as otherwise provided in this Employment Agreement, the benefits under this Section 5.3 shall consist of the following:

 

(a)                                  All equity or equity-based awards held by the Executive at termination of employment, including but not limited to, stock options, restricted stock, and restricted stock units, whether or not granted as performance-based awards, and which at the time of termination of employment are subject only to time-vesting based on service (the “ Time Vested Awards ”), shall become fully vested and non-forfeitable to the extent not already so vested;

 

(b)                                  Subject to Section 5.3(c) and the clarification described in the next sentence, with respect to all equity and equity-based awards held by the Executive at termination of employment which are subject to cancellation in the event the stated performance objectives are not satisfied, including but not limited to, stock options, restricted stock, and restricted stock units, and for which at

 

5

 

the time of the Executive’s termination of employment, the performance objectives have not been satisfied (the “ Performance-Based Awards ”), the Performance-Based Awards shall become vested and non-forfeitable on a Pro-Rata Basis, but only if at the end of the performance period, the performance objectives are achieved; provided, however, that if the Executive’s resignation or termination under this Section 5 follows a Change in Control, the Performance-Based Awards outstanding as of such Change in Control and remaining outstanding as of the Executive’s resignation or termination under this Section 5 shall become fully vested and non-forfeitable.  With respect to the provision for vesting and non-forfeiture of an award on a Pro-Rata Basis as described herein, only the performance periods under the award that have already commenced as of the Termination Date shall be taken into account to determine whether the performance objectives ultimately are achieved, and any performance period that has not commenced as of the Termination Date shall be disregarded for purposes of determining whether the award becomes vested and non-forfeitable on a Pro-Rata Basis; and

 

(c)                                   The amount of Performance-Based Awards eligible to become vested under Section 5.3(b) shall be determined by the level of achievement of the performance objectives; provided, however, that if the Performance-Based Award is becoming fully vested and non-forfeitable under Section 5.3(b) on account of a Change in Control, the earnings level shall not be conditioned on awaiting the end of the performance period and achievement of the performance objectives, and instead the performance objectives upon which the earning of the Performance-Based Award is conditioned shall be deemed to have been met at the greater of (i) target level at the Termination Date, or (ii) actual performance at the Termination Date.

 

To the extent that any Performance-Based Award references and proclaims to supersede this Agreement, the provisions of such Equity Awards shall control and supersede this Section 5.3.

 

5.4                                Waiver and Release Agreement.   The Executive agrees to execute at the time of the Executive’s termination of employment a Waiver and Release Agreement in a form provided to the Executive by the Company (the “ Waiver and Release Agreement ”), consistent with the form attached hereto as Exhibit C , the terms and conditions of which are specifically incorporated herein by reference.  The execution and delivery of the Waiver and Release Agreement shall be made within forty-five (45) days of delivery to the Executive of the Waiver and Release Agreement, and the Company shall (a) pay the benefits under Section 5.1(a) and, the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive and (b) in the event that the Executive’s resignation or termination under this Section 5 results in payment of a Change in Control year Partial Year Bonus, pay the benefits under Section 5.1(b) within ten (10) days after the Waiver and Release Agreement is no longer revocable by the Executive or, if later, at the same time as payment is made to all other participants under the Annual Cash Incentive program following the close of the fiscal year in which the Termination Date occurs.  If the Waiver and Release Agreement is not executed within the forty-five (45)-day period post-delivery, the Executive will forfeit all benefits provided pursuant to Section 5.1, Section 5.2, and Section 5.3.   If the Waiver and Release

 

6

 

Agreement is not received by the Executive within five (5) days of the Executive’s Termination Date it shall not be required and this Section 5.4 shall be null and void.

 

6.                                       Nature of Payments.   For the avoidance of doubt, the Executive acknowledges and agrees that the payments set forth in Section 3, Section 4, and Section 5 constitute liquidated damages for termination of his employment during the term of this Agreement (including any extensions thereof).

 

7.                                       Golden Parachute Excise Tax Provisions.   In the event it is determined that any payment or benefit (within the meaning of Section 280G(B)(2) of the Internal Revenue Code of 1986, as amended (the “ Code ”)), to the Executive or for his or her benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his or her employment (“ Payments ”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “ Excise Tax ”), then the total Payments shall be reduced to the extent the payment of such amounts would cause the Executive’s total termination benefits to constitute an “excess parachute payment” under Section 280G of the Code and by reason of such excess parachute payment the Executive would be subject to an excise tax under Section 4999(a) of the Code, but only if the Executive (or the Executive’s tax advisor) determines that the after-tax value of the termination benefits calculated with the foregoing restriction exceed those calculated without the foregoing restriction.  In that event, the Executive shall designate those rights, payments, or benefits under this Agreement, any other agreements, and any benefit arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Executive under this Agreement be deemed to be an excess parachute payment; provided, however, that in order to comply with Section 409A of the Code, the reduction or elimination will be performed in the order in which each dollar of value subject to a right, payment, or benefit reduces the parachute payment to the greatest extent.  Except as otherwise expressly provided herein, all determinations under this Section 7 shall be made at the expense of the Company by a nationally recognized public accounting or consulting firm selected by the Company and subject to the approval of the Executive, which approval shall not be unreasonably withheld.  Such determination shall be binding upon the Executive and the Company.

 

7.1                                Company Withholding.   Notwithstanding anything contained in this Agreement to the contrary, in the event that, according to the determinations in the paragraph above, an Excise Tax will be imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

 

8.                                       Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement.

 

8.1                                Confidential Information.   The Executive acknowledges that, during the course of his employment with the Company, the Executive has been given or has become acquainted with

 

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Confidential Information (as hereinafter defined) of the Company and may continue to be given or become acquainted with Confidential Information.  As used in this Section 8.1, “ Confidential Information ” of the Company means all confidential information, knowledge, or data relating to the Company or any of its affiliates, or to the Company’s or any such affiliate’s respective businesses and investments (including confidential information of others that has come into the possession of the Company or any such affiliate), learned by the Executive heretofore or hereafter directly or indirectly from the Company or any of its affiliates and which is not generally available lawfully and without breach of confidential or other fiduciary obligation to the general public without restriction, except with the Company’s express written consent or as may otherwise be required by law or any legal process.

 

The Executive acknowledges that the Confidential Information of the Company, as such may exist from time to time, is a valuable, confidential, special, and unique asset of the Company and its affiliates, expensive to produce and maintain, and essential for the profitable operation of their respective businesses.  The Executive agrees that, during the course of his employment with the Company, or at any time thereafter, he shall not, directly or indirectly, communicate, disclose, or divulge to any Person (as such term is hereinafter defined), or use for his benefit or the benefit of any Person, in any manner, any Confidential Information of the Company or its affiliates, acquired during his employment with the Company or any other confidential information concerning the conduct and details of the businesses of the Company and its affiliates, except as required in the course of his employment with the Company or as otherwise may be required by law.  For the purposes of this Agreement, “ Person ” shall mean any individual, partnership, corporation, trust, unincorporated association, joint venture, limited liability company, or other entity or any government, governmental agency, or political subdivision.

 

All documents relating to the businesses of the Company and its affiliates including, without limitation, Confidential Information of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, are the exclusive property of the Company and such respective affiliates and must not be removed from the premises of the Company, except as required in the course of the Executive’s employment with the Company.  The Executive shall return all such documents (including any copies thereof) to the Company when the Executive ceases to be employed by the Company or upon the earlier request of the Company or the Board.

 

8.2                                Noncompetition.   During the term of this Agreement (including any extensions thereof) and, subject to the penultimate sentence of this Section 8.2, for a period of twelve (12) months following the termination of the Executive’s employment under this Agreement for any reason (the “ Restricted Period ”), the Executive shall not, except with the Company’s express prior written consent, (a) directly or indirectly, engage in any business involving real property development, construction, acquisition, ownership, or operation, whether such business is conducted by the Executive individually or as a principal, partner, member, stockholder, director, trustee, officer, employee, or independent contractor of any Person or (b) own any interests in real property which are competitive, directly or indirectly, with any business carried on by the Company; provided, however, that this Section 8.2 shall

 

8

 

not be deemed to prohibit any of the following: (i) any of the real estate (and real estate-related) activities listed on Exhibit A hereto, the Executive’s ownership, marketing, sale, transfer, or exchange of any of the Executive’s interests in any of the properties or entities listed on Exhibit A hereto, or any other permitted activities listed on Exhibit A hereto; and (ii) the direct or indirect ownership by the Executive of up to five percent (5%) of the outstanding equity interests of any public company.  Notwithstanding the foregoing, during the twelve (12)-month “tail” period included in the Restricted Period, the restrictions set forth in this Section 8.2 shall apply only (i) with respect to any Person that has been designated as being part of the Company’s peer group, as determined by the Committee and set forth in the most recent proxy statement filed by the Company, or (ii) with respect to any other Person that owns neighborhood or community shopping centers and with respect to (i) and (ii) only within the following “ Restricted Areas ”: (A) the states of Indiana, Florida, and Texas; (B) the area within a ten (10)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date; (C) each county in each state in which the Company owns or leases property as of the Executive’s Termination Date; and (D) in any state in which the Company owns or leases at least five (5) properties as of the Executive’s Termination Date, the area within a fifty (50)-mile radius of any property owned or leased by the Company, as of the Executive’s Termination Date.  Notwithstanding anything to the contrary in this Section 8.2, during the period beginning twelve (12) months following a Change in Control consummated on or after the date of signing this Agreement (the “ Effective Time ”), and ending twelve (12) months after such Effective Time, the Executive may resign without Good Reason, and this Section 8.2 shall not apply.  For the avoidance of doubt, this Section 8.2 shall apply in all events if the Executive’s resignation is on account of Good Reason or if the Executive is terminated by the Company for any reason whether before or following a Change in Control.

 

8.3                                Non-Solicitation.   During the term of this Agreement (including any extensions thereof) and for a period of two (2) years following the termination of the Executive’s employment under this Agreement for any reason, the Executive shall not, except with the Company’s express prior written consent, for the benefit of any entity or Person (including the Executive) (a) solicit, induce, or encourage any employee of the Company, or any of its affiliates, to leave the employment of the Company, or solicit, induce, or encourage any customer, client, or independent contractor of the Company, or any of its affiliates, to cease or reduce its business with or services rendered to the Company or its affiliates or (b) hire (on behalf of the Executive or any other person or entity) any employee or independent contractor who has left the employment or other service of the Company (or any predecessor thereof) within one year of the termination of such employee’s or independent contractor’s employment or other service with the Company.

 

8.4                                Cooperation With Regard to Litigation.   The Executive agrees to cooperate with the Company, during the term and thereafter (including following the Executive’s termination of employment for any reason), by making himself available to testify on behalf of the Company or any affiliate of the Company, in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Company, or any affiliate of the Company, in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board or its representatives

 

9

 

or counsel, or representatives or counsel to the Company or any affiliate of the Company, as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations.  The Company agrees to reimburse the Executive, on an after-tax basis, for all reasonable expenses actually incurred in connection with his provision of testimony or assistance.

 

8.5                                Non-Disparagement.   The Executive shall not, at any time during the term of his employment and thereafter disparage the Company, its affiliates or their respective officers, directors or trustees, nor shall the Company, its affiliates or their respective officers, directors or trustees disparage Executive.  Notwithstanding the foregoing, nothing in this Agreement shall preclude the Executive or his successor or members of the Board from making truthful statements that are required by applicable law, regulation or legal process.

 

8.6                                Survival.   The provisions of this Section 8 shall survive any termination or expiration of this Agreement.

 

8.7                                Remedies.   The Executive agrees that any breach of the terms of this Section 8 would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; the Executive therefore also agrees that, in the event of said breach or any threat of breach and notwithstanding Section 9, the Company shall be entitled to an immediate injunction and restraining order from a court of competent jurisdiction to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to prove damages.  The availability of injunctive relief shall be in addition to any other remedies to which the Company may be entitled at law or in equity, but remedies other than injunctive relief may only be pursued in an arbitration brought in accordance with Section 9.  The terms of this paragraph shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach of this Section 8, including but not limited to the recovery of damages from the Executive.

 

9.                                       Governing Law; Disputes; Arbitration.

 

9.1                                Governing Law.   This Agreement is governed by and is to be construed, administered, and enforced in accordance with the laws of the State of Indiana, without regard to conflicts of law principles.  If under the governing law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law, such portion shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is not possible, to be omitted from this Agreement.  The invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion hereof.  If any court determines that any provision of Section 8 is unenforceable because of the duration or geographic scope of such provision, it is the parties’ intent that such court shall have the power to modify the duration or geographic scope of such provision, as the case may be, to the extent necessary to render the provision enforceable, and in its modified form, such provision shall be enforced.  If the courts of any one or more of jurisdictions hold Section 8 to be wholly unenforceable by reason of breadth of scope or otherwise, it is the intention of

 

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the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided above in the courts of any other jurisdiction within the geographical scope of the provisions of Section 8, as to breaches of such provisions in such other respective jurisdictions, such provisions as they relate to each jurisdiction’s being, for this purpose, severable, diverse, and independent covenants, subject, where appropriate, to the doctrine of res judicata.

 

9.2                                Arbitration.   Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Indianapolis, Indiana by three (3) arbitrators.  The Executive and the Company shall each select one arbitrator and those two designated arbitrators shall select a third arbitrator.  The arbitration shall not be administered by the American Arbitration Association; however, the arbitration shall be conducted by the three selected arbitrators using the procedural rules of the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, the Company and the Executive hereby consent to the jurisdiction of any or all of the following courts:  (i) the United States District Court for the Southern District of Indiana, (ii) any of the courts of the State of Indiana, or (iii) any other court having jurisdiction.  The Company and the Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  The Company and the Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 9.  Notwithstanding any provision in this Section 9, the Executive shall be paid compensation due and owing under this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

9.3                                WAIVER OF JURY TRIAL.   TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

10.                                Miscellaneous.

 

10.1                         Integration.   This Agreement cancels and supersedes any and all prior agreements and understandings between the parties hereto with respect to the employment of the Executive by the Company, any parent or predecessor company, and the Company’s affiliates during the term, but excluding existing contracts relating to compensation under executive compensation and employment benefit plans of the Company and its affiliates.  This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision

 

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hereof shall be effective unless in writing and signed by the parties hereto.  The Executive shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by the Executive under such prior agreements and understandings or under any benefit or compensation plan of the Company.

 

10.2                         Successors; Transferability.   The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not the corporate existence of the Company continues) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “ Company ” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise, and in the case of an acquisition of the Company in which the corporate existence of the Company continues, the ultimate parent company following such acquisition.  Subject to the foregoing, the Company may transfer and assign this Agreement and the Company’s rights and obligations hereunder to another entity that is substantially comparable to the Company in its financial strength and ability to perform the Company’s obligations under this Agreement.  Neither this Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or assignable by the Executive, except in accordance with the laws of the descent and distribution or as specified in Section 10.3.

 

10.3                         Beneficiaries.   The Executive shall be entitled to designate (and change, to the extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or benefits provided hereunder following the Executive’s death.

 

10.4                         No Duty to Mitigate.   The Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor will any payments or benefits hereunder be subject to offset in the event the Executive does mitigate, except as provided in Section 5.2.

 

10.5                         Notices.   Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express or other similar overnight service or by certified or registered mail, return receipt requested, postage prepaid and addressed to such party at the address set forth below or at such address as may be designated by such party by like notice:

 

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If to the Company or the Board:

 

Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

Attn: Compensation Committee of the Board of Trustees, Chairperson

 

With a copy to:

 

Hogan Lovells US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Attn: David Bonser, Esq.

 

If to Executive, to the address set forth in the records of the Company.

 

If the parties by mutual agreement supply each other with fax numbers for the purpose of providing notice by facsimile, such notice shall also be proper notice under this Agreement.  Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered (i) two (2) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, (ii) when received if it is sent by fax communication during normal business hours on a business day or one business day after it is sent by fax and received if sent other than during business hours on a business day, (iii) one business day after it is sent via a reputable overnight courier service, charges prepaid, or (iv) when received if it is delivered by hand.

 

10.6                         Headings.   The headings of this Agreement are for convenience of reference only and do not constitute a part hereof.

 

10.7                         Attorneys’ Fees.   In the event of any legal proceeding relating to this Agreement or any term or provision thereof, the losing party shall be responsible to pay or reimburse the prevailing party for all reasonable attorneys’ fees incurred by the prevailing party in connection with such proceeding; provided, however, the Executive shall not be required to pay or reimburse the Company unless the claim or defense asserted by the Executive was unreasonable.

 

10.8                         No General Waivers.   The failure of any party at any time to require performance by any other party of any provision hereof or to resort to any remedy provided herein or at law or in equity shall in no way affect the right of such party to require such performance or to resort to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the provisions hereof be deemed to be a waiver of any subsequent breach of such provisions.  No such waiver shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.

 

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10.9                         Offsets; Withholding.   The amounts required to be paid by the Company to the Executive pursuant to this Agreement shall not be subject to offset.  The foregoing and other provisions of this Agreement notwithstanding, all payments to be made to Executive under this Agreement, including under Section 3, Section 4, and Section 5, or otherwise by the Company, will be subject to withholding to satisfy required withholding taxes and other required deductions.

 

10.10                  Counterparts.   This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

10.11                  Representations of the Executive.   The Executive represents and warrants to the Company that he has the legal right to enter into this Agreement and to perform all of the obligations on his part to be performed hereunder in accordance with its terms and that he is not a party to any agreement or understanding, written or oral, which prevents him from entering into this Agreement or performing all of his obligations hereunder.

 

10.12                  Conflicting Terms.   Except as provided in Section 4 and Section 5.3, in the event of any conflict between the terms of this Agreement and the terms of any other compensation plan, agreement or award (including, without limitation, any annual or long term bonus and any equity based award), the terms and conditions of this Agreement shall govern and control.

 

11.                                Section 409A Savings Provisions.   It is intended that the payments and benefits provided under this Agreement shall be exempt from the application of the requirements of Section 409A of the Code and the regulations and other guidance issued thereunder (collectively, “ Section 409A ”). Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible.

 

11.1                         Separation from Service.   The Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A.

 

11.2                         Specified Employee Provisions.   Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “ Delay Period ”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such Delay Period (or upon the

 

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Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.  To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

 

11.3                         Expense Reimbursements.   (a) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred; (b) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit; and (c) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

 

12.                                Definitions Relating to Termination Events.

 

12.1                         Affiliate.   For purposes of this Agreement, an “ affiliate ” of any person means another person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person, and includes subsidiaries.  Notwithstanding the foregoing, the persons listed on Exhibit B , as such Exhibit B is updated from time to time by the mutual agreement of the parties, shall not be affiliates of the Company.

 

12.2                         Cause.   For purposes of this Agreement, “ Cause ” shall mean Executive’s:

 

(a)                                  Conviction for (or pleading nolo contendere to) any felony;

 

(b)                                  Commission of any act of fraud, theft, or dishonesty related to the business of the Company or its affiliates or the performance of the Executive’s duties hereunder;

 

(c)                                   Willful and continuing failure or habitual neglect by the Executive to perform the Executive’s duties hereunder;

 

(d)                                  Material violation of the covenants contained in Section 8; or

 

(e)                                   Willful and continuing material breach of this Agreement.

 

For purposes of this Section 12.2, no act, or failure to act, by the Executive shall be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company or its affiliates.

 

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12.3                         Change in Control.   For purposes of this Agreement, “ Change in Control ” shall mean:

 

(a)                                  The dissolution or liquidation of the Company;

 

(b)                                  The merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity or immediately following which the persons or entities who were beneficial owners (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) of voting securities of the Company immediately prior thereto cease to beneficially own more than fifty percent (50%) of the voting securities of the surviving entity immediately thereafter;

 

(c)                                   A sale of all or substantially all of the assets of the Company to another person or entity;

 

(d)                                  Any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) that results in any person or entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other than persons who are shareholders or affiliates immediately prior to the transaction) owning thirty percent (30%) or more of the combined voting power of all classes of shares of the Company; or

 

(e)                                   Individuals who, as of the date hereof, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a trustee subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for trustee, without written objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or contests by or on behalf of a person other than the Board.

 

12.4                         Compensation Accrued at Termination.   For purposes of this Agreement, “ Compensation Accrued at Termination ” means the following:

 

(a)                                  The unpaid portion of annual Base Salary at the rate payable, in accordance with Section 2.1 hereof, at the Executive’s Termination Date, pro-rated through such Termination Date, payable in accordance with the Company’s regular pay schedule;

 

(b)                                  Payment for vacation accrued under this Agreement but unused as of the Executive’s Termination Date;

 

(c)                                   Except in the event the Executive’s employment is terminated for Cause (except to the extent otherwise required by law), all earned and unpaid and/or vested, nonforfeitable amounts

 

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owing or accrued at the Executive’s Termination Date under any compensation and benefit plans, programs, and arrangements set forth or referred to in Sections 2.2 and 2.3 hereof (including any earned and vested Annual Cash Incentive which the Company agrees is earned for purposes of this definition as of the close of business on the last day of the fiscal year) in which the Executive theretofore participated, payable (except as otherwise provided in Section 3, Section 4 and Section 5 of this Agreement) in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued; and

 

(d)                                  Reasonable business expenses and disbursements incurred by the Executive prior to the Executive’s termination of employment, to be reimbursed to the Executive, as authorized under Section 2.6, in accordance with the Company’s reimbursement policies as in effect at the Executive’s Termination Date.

 

12.5                         Disability.   For purposes of this Agreement, “ Disability ” means the Executive becomes eligible for disability benefits under the Company’s long-term disability plans and arrangements (or, if none apply, would have been so eligible under the most recent plan or arrangement).  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, Section 409A of the Code, and other applicable law.

 

12.6                         Good Reason.   For purposes of this Agreement, “ Good Reason ” shall mean, without the Executive’s express written consent, the occurrence of any of the following circumstances:

 

(a)                                  The material reduction of the Executive’s authority, duties, and responsibilities, or the assignment to the Executive of duties materially and adversely inconsistent with the Executive’s position or positions with the Company and its affiliates;

 

(b)                                  A material reduction in Base Salary of the Executive except in connection with a reduction in compensation generally applicable to senior management employees of the Company;

 

(c)                                   The Company requiring the Executive to relocate his principal place of business for the Company to a location more than fifty (50) miles from the Company’s principal place of business in Indianapolis, Indiana;

 

(d)                                  The failure by the Company to obtain an agreement in form and substance reasonably satisfactory to the Executive from any successor to the business of the Company to assume and agree to perform this Agreement; or

 

(e)                                   The Company’s material breach of this Agreement.

 

12.7                         Partial Year Bonus.   For purposes of this Agreement, “ Partial Year Bonus ” shall mean an amount equal to the product of (a) the Executive’s Full-Year Target Annual Cash Incentive for the fiscal year in which the Executive’s employment terminates and (b) a fraction, the numerator of which is the

 

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number of days in the current fiscal year through the Executive’s Termination Date, and the denominator of which is 365.

 

12.8                         Pro-Rata Basis.   For purposes of this Agreement, vesting on a “ Pro-Rata Basis ” shall mean vesting in an amount equal to a fraction not to exceed one (1), the numerator of which is the number of days the Executive was employed by the Company from the grant date for such award to the Termination Date, and the denominator of which is the number of total days from the grant date to the date that otherwise would have resulted in full vesting of the award.

 

12.9                         Termination Date.   For purposes of this Agreement, “ Termination Date ” shall mean:

 

(a)                                  The date that the Board delivers written notice to the Executive of his termination of employment for Cause or on account of Disability;

 

(b)                                  The date set forth in a written notice delivered to the Executive of his termination of employment without Cause, which shall not be less than thirty (30) days after the date of such notice or more than sixty (60) days after the date of such notice;

 

(c)                                   The date set forth in a written notice delivered to the Board of the Executive’s resignation, with or without Good Reason, which shall not be less than thirty (30) days after the date of such notice, except as otherwise mutually agreed to by the Company and the Executive;

 

(d)                                  The June 30 th  following the date that the Executive or the Board provides the other party with notice of an election to terminate the automatic extension provision of Section 1.1(a), except as otherwise mutually agreed to by the Company and the Executive; or

 

(e)                                   The date of the Executive’s death.

 

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IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first written above.

 

	KITE REALTY GROUP TRUST
	By:	/s/ John A. Kite
	Name:	JOHN A. KITE
	Title:	CHIEF EXECUTIVE OFFICER
	EXECUTIVE
	/s/ Daniel R. Sink
	DANIEL R. SINK

 

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SCHEDULE 1

 

REPORTING OFFICER

 

A-1

 

EXHIBIT A

 

EXCLUDED ACTIVITIES, PROPERTIES, AND INTERESTS

 

A-2

 

EXHIBIT B

 

EXCLUSION FROM AFFILIATES

 

B-1

 

EXHIBIT C

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT is entered into as of [ TO BE DETERMINATED AT TERMINATION OF EMPLOYMENT ] , by Daniel R. Sink (the “ Executive ”) in consideration of the severance pay and severance benefits to be provided to the Executive by Kite Realty Group Trust (the “ Company ”) pursuant to Section 5 of the Executive Employment Agreement (the “ Employment Agreement ”) by and between the Company and the Executive (the “ Severance Payment ”).

 

1.                                       Waiver and Release.

 

(a)                                  Subject to Section 1(b) of this Waiver and Release Agreement, the Executive, on his or her own behalf and on behalf of his or her heirs, executors, administrators, attorneys, and assigns, hereby unconditionally and irrevocably releases, waives, and forever discharges the Company and each of its affiliates, parents, successors, predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “ Employer ”), from any and all causes of action, claims, and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of his or her signing of the Waiver and Release Agreement, concerning his or her employment or separation from employment.  Subject to Section 1(b) of this Waiver and Release Agreement, this release includes, but is not limited to, any payments, benefits, or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended); any claim arising under any state or local laws, ordinances, or regulations (including, but not limited to, any state or local laws, ordinances, or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy, or loss of consortium.

 

(b)                                  Notwithstanding any other provision of this Waiver and Release Agreement to the contrary, this Waiver and Release Agreement does not encompass, and Executive does not release, waive or discharge, the obligations of the Company (i) to make the payments and provide the other benefits contemplated by the Employment Agreement or any other agreement with Executive, (ii) under any award agreement entered into with the Executive pursuant to the Kite Realty Group Trust 2013 Equity Incentive Plan, as amended from time to time, and any successor plan thereto, (iii) under any indemnification or similar agreement with Executive, or (iv) under this Waiver and Release Agreement.

 

(c)                                   The Executive understands that by signing this Waiver and Release Agreement that he or she is not waiving any claims or administrative charges which cannot be waived by law.  He or she is

 

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waiving, however, any right to monetary recovery or individual relief should any federal, state, or local agency (including the Equal Employment Opportunity Commission) pursue any claim on his or her behalf arising out of or related to his or her employment with and/or separation from employment with the Company (other than with respect to those matters described in Section 1(b) of this Waiver and Release Agreement ).

 

(d)                                  The Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Waiver and Release Agreement.

 

2.                                       Acknowledgments.   The Executive is signing this Waiver and Release Agreement knowingly and voluntarily.  He or she acknowledges that:

 

(a)                                  He or she is hereby advised in writing to consult an attorney before signing this Waiver and Release Agreement;

 

(b)                                  He or she has relied solely on his or her own judgment and/or that of his or her attorney regarding the consideration for and the terms of the Waiver and Release Agreement and is signing this Waiver and Release Agreement knowingly and voluntarily of his or her own free will;

 

(c)                                   He or she is not entitled to the Severance Payment unless he or she agrees to and honors the terms of this Waiver and Release Agreement and continues to honor the surviving terms of the Employment Agreement, including, but not limited to, Section 8 (Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement) of the Employment Agreement;

 

(d)                                  He or she has been given at least forty-five (45) calendar days to consider this Waiver and Release Agreement, or he or she expressly waives his or her right to have at least forty-five (45) days to consider this Waiver and Release Agreement;

 

(e)                                   He or she may revoke this Waiver and Release Agreement within seven (7) calendar days after signing it by submitting a written notice of revocation to the Company.  He or she further understands that this Waiver and Release Agreement is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if he or she revokes this Waiver and Release Agreement within the seven (7) day revocation period, he or she will not receive the Severance Payment;

 

(f)                                    He or she has read and understands the Waiver and Release Agreement and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen and unforeseen claims presently asserted or otherwise arising through the date of his or her signing of this Waiver and Release Agreement that he or she may have against the Employer; and

 

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(g)                                   No statements made or conduct by the Employer has in any way coerced or unduly influenced him or her to execute this Waiver and Release Agreement.

 

3.                                       No Admission of Liability.   This Waiver and Release Agreement does not constitute an admission of liability or wrongdoing on the part of the Employer; the Employer does not admit there has been any wrongdoing whatsoever against the Executive; and the Employer expressly denies that any wrongdoing has occurred.

 

4.                                       Entire Agreement.   There are no other agreements of any nature between the Employer and the Executive with respect to the matters discussed in this Waiver and Release Agreement, except as expressly stated herein, and in signing this Waiver and Release Agreement, the Executive is not relying on any agreements or representations, except those expressly contained in this Waiver and Release Agreement.

 

5.                                       Execution.   It is not necessary that the Employer sign this Waiver and Release Agreement following the Executive’s full and complete execution of it for it to become fully effective and enforceable.

 

6.                                       Severability.   If any provision of this Waiver and Release Agreement is found, held, or deemed by a court of competent jurisdiction to be void, unlawful, or unenforceable under any applicable statute or controlling law, the remainder of this Waiver and Release Agreement shall continue in full force and effect.

 

7.                                       Governing Law.   This Waiver and Release Agreement shall be governed by the laws of the State of Indiana, excluding the choice of law rules thereof.

 

8.                                       Headings.   Section and subsection headings contained in this Waiver and Release Agreement are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Waiver and Release Agreement for any purpose, and they shall not in any way define or affect the meaning, construction, or scope of any of the provisions hereof.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Waiver and Release Agreement as of the day and year first herein above written.

 

	EXECUTIVE

 

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Exhibit 10.5

 

Award No.           

 

KITE REALTY GROUP TRUST

2013 EQUITY INCENTIVE PLAN

 

2014 OUTPERFORMANCE PLAN
LTIP UNIT AGREEMENT

 

COVER SHEET

 

Pursuant to the Kite Realty Group Trust 2013 Equity Incentive Plan (as amended from time to time, the “ Plan ”) and the Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P. (as amended from time to time, the “ Limited Partnership Agreement ”), Kite Realty Group, L.P., a Delaware limited partnership (the “ Limited Partnership ”), and Kite Realty Group Trust, a Maryland real estate investment trust and the sole general partner of the Limited Partnership (the “ Company ”), together hereby grant and issue to the Grantee named below an award (the “ Award ”) of LTIP Units (as defined in the Limited Partnership Agreement) in the number set forth below in consideration of the Grantee’s agreement to provide services to or for the benefit of the Limited Partnership.  The LTIP Units have the rights, voting powers, restrictions, limitations as to distributions, qualifications, and terms and conditions of redemption and conversion set forth in the Limited Partnership Agreement.  Upon the close of business on the Final Acceptance Date, if the terms and conditions of the Award set forth on this cover sheet and in the attached 2014 Outperformance Plan LTIP Unit Agreement (collectively, the “ Agreement ”), in the Limited Partnership Agreement, and in the Plan are accepted, the Grantee shall receive the number of LTIP Units specified below, effective as of the Grant Date, subject to the vesting, forfeiture, and other conditions set forth in this Agreement, in the Limited Partnership Agreement, and in the Plan.

 

Name of Grantee:                              

 

Grantee’s Social Security Number:              -        -

 

Maximum Number of LTIP Units Covered by this Award:               

 

Grant Date:               

 

Final Acceptance Date:                              [Typically 10 business days after the Grant Date]

 

 

By your signature below, you agree to all of the terms and conditions described herein, in the attached Agreement, and in the Plan, a copy of which is also attached.  You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

 

	KITE REALTY GROUP, L.P. , a Delaware limited partnership
	By:	Kite Realty Group Trust, a Maryland real estate investment trust, its general partner
	By:
	Name:
	Title:
	KITE REALTY GROUP TRUST , a Maryland real estate investment trust
	By:
	Name:
	Title:
	GRANTEE :
	(Sign Name)
	(Print Name)
	Address:

 

The Grantee’s spouse indicates, by the execution of this Agreement, his or her consent to be bound by the terms herein as to his or her interests, whether as community property or otherwise, if any, in the LTIP Units.

 

	GRANTEE’S SPOUSE :
	(Sign Name)
	(Print Name)

 

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Attachment

 

This is not a share certificate or a negotiable instrument.

 

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KITE REALTY GROUP TRUST

2013 EQUITY INCENTIVE PLAN

 

2014 OUTPERFORMANCE PLAN
LTIP UNIT AGREEMENT

 

Acceptance of Agreement		Unless you are already a Partner (as defined in the Limited Partnership Agreement), you must sign, as a Partner, and deliver to the Limited Partnership, a Limited Partner Acceptance to the Limited Partnership Agreement (attached hereto as Exhibit A ). Upon signature and delivery of the Limited Partner Acceptance on or prior to the Final Acceptance Date, to the extent required, you shall be admitted as a Partner of the Limited Partnership, as of the Grant Date, with beneficial ownership of the number of LTIP Units specified on the cover sheet of this Agreement. Thereupon, you shall have all the rights of a Partner of the Limited Partnership with respect to the number of LTIP Units specified on the cover sheet of this Agreement, as set forth in the Limited Partnership Agreement, subject, however, to the restrictions and conditions specified herein, in the Limited Partnership Agreement, and in the Plan. In order to confirm receipt of this Agreement, Grantee must sign and deliver to the Company a copy of this Agreement.
Vesting of LTIP Units		You shall vest in the number of LTIP Units determined in accordance with the terms and provisions of Exhibit B attached hereto in accordance with the vesting provisions set forth in Exhibit B attached hereto.   To the extent you are a party to another agreement or arrangement with the Company or any Affiliate that provides either (i) accelerated vesting of the LTIP Units granted hereunder in the event of certain types of employment terminations or any other applicable vesting-related events or (ii) provides more favorable vesting provisions with respect to the LTIP Units granted hereunder than provided for in this Agreement, such accelerated vesting provisions are hereby expressly superseded and replaced with respect to this Award.
Leaves of Absence		For purposes of this Agreement, your Service does not terminate when you go on a bona fide leave of absence that was approved by your employer in writing if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.   Your employer may determine, in its discretion, which leaves count for this purpose and when your Service terminates for all purposes under the Agreement and the Plan, in accordance with the provisions of the

 

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		Plan. Notwithstanding the foregoing, the Company may determine, in its discretion, which leaves count for this purpose even if your employer does not agree.
Forfeiture of LTIP Units		The LTIP Units shall be subject to forfeiture in accordance with the terms and provisions of Exhibit B attached hereto. Upon such forfeiture, your rights to such LTIP Units shall be null and void, and neither you nor any of your successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such LTIP Units.
Distributions		You shall be entitled to distributions on the LTIP Units in accordance with the terms and provisions of the Limited Partnership Agreement.
Conversion and Redemption		The LTIP Units shall be subject to conversion and redemption in accordance with the terms and provisions of the Limited Partnership Agreement. Furthermore, in accordance with the Limited Partnership Agreement, in the event the Grantee’s Service is terminated, the Company reserves the right at any time thereafter to convert vested LTIP units into an equal number of Class A Units of the Limited Partnership (as defined in the Limited Partnership Agreement), and in addition, to redeem such Class A Units for Shares or cash, at the election of the Company. Upon any such conversion and redemption, this Agreement shall be fully satisfied, and the Company shall have no further obligation under the Agreement.
Restrictions on Transfer		You shall not, without the consent of the Company (which the Company may give or withhold in its sole discretion), sell, pledge, assign, hypothecate, transfer, or otherwise dispose of (collectively, “ Transfer ”) any LTIP Units (the “ Transfer Restrictions ”); provided, however , that the Transfer Restrictions shall not apply to any Transfer of LTIP Units to the Limited Partnership or the Company or to any Transfer by will or pursuant to the laws of descent and distribution.
Investment Representation		You hereby make the covenants, representations, and warranties set forth on Exhibit C attached hereto as of the date of acceptance of this Agreement and on each applicable vesting date, as determined in Exhibit B attached hereto. All of such covenants, warranties, and representations shall survive the execution and delivery of this Agreement by you. You shall immediately notify the Limited Partnership upon discovering that any of the representations or warranties set forth on Exhibit C were false when made or have, as a result of changes in circumstances, become false.
Registration		You hereby acknowledge that the LTIP Units have not been registered under the Securities Act and that the LTIP Units cannot be transferred by you other than in accordance with the terms and conditions set forth in the Plan, this Agreement, and the Limited Partnership Agreement

 

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		and, in any event, unless such transfer is registered under the Securities Act or an exemption from such registration is available. Neither the Company nor the Limited Partnership has made any agreements, covenants, or undertakings whatsoever to register the transfer of the LTIP Units under the Securities Act. Neither the Company nor the Limited Partnership has made any representations, warranties, or covenants whatsoever as to whether any exemption from the Securities Act, including, without limitation, any exemption for limited sales in routine brokers’ transactions pursuant to Rule 144 of the Securities Act (“ Rule 144 ”), will be available. If an exemption under Rule 144 is available at all, it will not be available until all applicable terms and conditions of Rule 144 have been satisfied.
Code Section 83(b) Election		You hereby agree to make an election to include in gross income in the year of transfer the LTIP Units pursuant to Section 83(b) of the Code substantially in the form attached hereto as Exhibit D and to supply the necessary information in accordance with the regulations promulgated thereunder.   YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY’S OR THE LIMITED PARTNERSHIP’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF YOU REQUEST THE COMPANY, THE LIMITED PARTNERSHIP, OR THEIR RESPECTIVE REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF. YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER TO FILE ANY CODE SECTION 83(b) ELECTION AND REGARDING THE ACCURACY AND TIMELINESS OF SUCH FILING.
Amendment		You acknowledge that the Plan may be amended, suspended, or terminated and that this Agreement may be amended, suspended, or terminated by the Company, on behalf of the Limited Partnership, for the purpose of satisfying changes in law or for any other lawful purpose, provided that no such action shall impair your rights under this Agreement without your written consent.
Withholding Taxes		You agree as a condition of this Award that you will make acceptable arrangements to pay any withholding or other taxes that may be due in connection with the Award of the LTIP Units. In the event that the Company or an Affiliate, as applicable, determines that any federal, state, local, or foreign tax or withholding payment is required relating to the LTIP Units arising from this Award, the Company or an Affiliate, as applicable, shall have the right to require such payments from you, or withhold such amounts from other payments due to you

 

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		from the Company or an Affiliate, as applicable.
Retention Rights		This Agreement and the grant evidenced hereby do not give you the right to be retained by the Company or an Affiliate in any capacity. Unless otherwise specified in an employment or other written agreement between the Company or an Affiliate, as applicable, and you, the Company or an Affiliate, as applicable, reserves the right to terminate your Service at any time and for any reason.
Legend		The records of the Limited Partnership evidencing the LTIP Units shall bear an appropriate legend, as determined by the Limited Partnership in its sole discretion, to the effect that such LTIP Units are subject to restrictions as set forth in this Agreement, in the Plan, and in the Limited Partnership Agreement.
Clawback		This Award is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to any Company “clawback” or recoupment policy that requires the repayment by you to the Company of compensation paid by the Company to you in the event that you fail to comply with, or violate, the terms or requirements of such policy.   If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and you knowingly engaged in the misconduct, were grossly negligent in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly negligent in failing to prevent the misconduct, you shall reimburse the Company the amount of any payment in settlement of this Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained such material noncompliance.
Applicable Law and Venue		This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. You agrees that the exclusive venue for any disputes arising out of or related to this Agreement shall be the state or federal courts located in [Indianapolis, Indiana].
Remedies		You shall be liable to the Company and the Limited Partnership for all costs and damages, including incidental and consequential damages, resulting from a disposition of the Award or the LTIP Units which is in violation of the provisions of this Agreement. Without limiting the generality of the foregoing, you agree that the Company and the

 

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		Limited Partnership shall be entitled to obtain specific performance of your obligations under this Agreement and immediate injunctive relief in the event any action or proceeding is brought in equity to enforce the same. You will not urge as a defense that there is an adequate remedy at law.
The Plan		The text of the Plan is incorporated into this Agreement by reference.   Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.   This Agreement, the Limited Partnership Agreement, and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments, or negotiations concerning this Award are superseded; except that any written employment, consulting, confidentiality, non-competition, non-solicitation, and/or severance agreement between you and the Company or an Affiliate, as applicable, shall supersede this Agreement with respect to its subject matter.
Data Privacy		In order to administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.   By accepting this Award, you give explicit consent to the Company to process any such personal data.
Code Section 409A		It is intended that this Award comply with Code Section 409A or an exemption to Code Section 409A. To the extent that the Company determines that you would be subject to the additional twenty percent (20%) tax imposed on certain non-qualified deferred compensation plans pursuant to Code Section 409A as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax. The nature of any such amendment shall be determined by the Committee. For purposes of this Award, a termination of employment only occurs upon an event that would be a “separation from service” within the meaning of Code Section 409A.
Profits Interest		The Company, the Limited Partnership, and you acknowledge and agree that the LTIP Units are hereby issued to you for the performance of services to or for the benefit of the Limited Partnership in your capacity as a Partner or in anticipation of becoming a Partner.

 

8

 

The Company, the Limited Partnership, and you intend that (a) the LTIP Units be treated as “profits interests” within the meaning of the Code, Treasury Regulations promulgated thereunder, and any published guidance by the Internal Revenue Service with respect thereto, including, without limitation, Internal Revenue Service Revenue Procedure 93-27, 1993-2 C.B. 343, as clarified by Internal Revenue Service Revenue Procedure 2001-43, 2001-2 C.B. 191; (b) the issuance of such interests not be a taxable event to the Limited Partnership or you as provided in such Revenue Procedures; and (c) the Limited Partnership Agreement, the Plan, and this Agreement be interpreted consistently with such intent.   You are urged to consult with your own tax advisor regarding the tax consequences of the receipt of LTIP Units, the conversion of LTIP Units into Class A Units, the holding of LTIP Units and Class A Units, the redemption or other disposition of Class A Units, and the acquisition, holding, and disposition of Shares.   You shall make no contribution of capital to the Limited Partnership in connection with the Award and, as a result, your Capital Account (as defined in the Limited Partnership Agreement) balance in the Limited Partnership immediately after your receipt of the LTIP Units shall be equal to zero, unless you were a Partner in the Limited Partnership prior to this Award, in which case your Capital Account balance shall not be increased as a result of your receipt of the LTIP Units.

 

By signing this Agreement, you agree to all of the terms and conditions described above and in the Plan.

 

9

 

EXHIBIT A

 

LIMITED PARTNER ACCEPTANCE

 

This Limited Partner Acceptance to the Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P. (the “ Acceptance ”), which Acceptance is incorporated into that certain Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 and as amended from time to time (the “ Partnership Agreement ”), is executed and delivered by the undersigned.  As of the date hereof, the undersigned, designated as an Additional Limited Partner, is admitted as a Limited Partner of the Partnership, and by said undersigned’s execution and delivery hereof, said undersigned agrees to be bound by the terms and provisions of the Partnership Agreement, including the power of attorney set forth in Section 15.11 of the Partnership Agreement.  The number of LTIP Units issued as of the date hereof to the undersigned designated as an Additional Limited Partner is shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise defined shall have the meanings given them in the Partnership Agreement.

 

This Acceptance may be executed in two or more counterparts, each of which shall be deemed an original but all of which collectively shall constitute one and the same document.

 

 

Dated:			GENERAL PARTNER
			KITE REALTY GROUP TRUST
			By:
			Name:
			Title:
			ADDITIONAL LIMITED PARTNER
Number of LTIP Units:
			Name:
			Tax ID#:
			Address:

 

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EXHIBIT B

 

KITE REALTY GROUP TRUST 2014 OUTPERFORMANCE PLAN REALIZATION AND VESTING RULES

 

ARTICLE I: PURPOSE

 

The purpose of these Kite Realty Group Trust 2014 Outperformance Plan LTIP Units Realization and Vesting Rules (the “ Rules ”) is to establish the mechanism for determining the number of LTIP Units, if any, that will vest under the Agreement.  These Rules award you a notional interest in a cash-denominated bonus pool, the maximum value of which is seven million five hundred thousand dollars ($7,500,000), but which may be less, or even zero, based on the TSR performance of the Company.  Your notional interest is the percentage applied to the ultimate Final Bonus Pool (defined below).  The dollar amount of your interest in the Final Bonus Pool, if any, then is used to calculate the number of LTIP Units in which you are eligible to vest.  The Final Bonus Pool and your Bonus Pool Interest (defined below) are notional amounts, which are not separately payable, but instead are components of a formula intended to govern the vesting and forfeiture of the Award of LTIP Units under the Agreement, as further set forth below.

 

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