Exhibit 10.27

 

KITE REALTY GROUP TRUST

EXECUTIVE BONUS PLAN

 

1.                                                                                     
PURPOSE.

 

The purpose of this Plan is to provide for bonuses to motivate and reward
eligible key executives who through industry, ability and exceptional service,
contribute materially to the success of Kite Realty Group Trust.

 

2.                                                                                     
DEFINITIONS.

 

When used herein the following terms shall have the following meanings:

 

(a)                                  “Affiliate” means, with respect to the
Company, any company or other trade or business that controls, is controlled by
or is under common control with the Company within the meaning of Rule 405 of
Regulation C under the Securities Act of 1933, as now in effect or as hereafter
amended, including, without limitation, any subsidiary.  Notwithstanding the
foregoing, the persons listed on Exhibit A, as such Exhibit A is updated from
time to time by the Company, shall not be affiliates of the Company.

 

(b)                                 “Beneficiary” means the beneficiary or
beneficiaries designated by a Participant pursuant to paragraph 5 below to
receive the amount, if any, payable under the Plan upon the death of the
Participant.

 

(c)                                  “Board of Trustees” means the Board of
Trustees of the Company.

 

(d)                                 “Code” means the Internal Revenue Code of
1986, as now in effect or as hereafter amended.

 

(e)                                  “Company” means Kite Realty Group Trust.

 

(f)                                    “Committee” means the Compensation
Committee of the Board of Trustees.  Members of the Committee are not eligible
to participate in the Plan.

 

(g)                                 “Covered Employee” means a Participant who
is a Covered Employee within the meaning of Section 162(m)(3) of the Code.

 

(h)                                 “Effective Date” means August 16, 2004.

 

(i)                                     “Employee” or “Eligible Employee” means
an employee with the title of Senior Vice President or higher, who is employed
by the Company or its Affiliate at the end of the Plan Year and who has been
designated by the Committee as eligible to receive awards hereunder;

 

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

 

provided, however, that if in the judgment of the Committee an Employee has made
an outstanding contribution to the Company, the Employee or the Employee’s
Beneficiary may receive a pro rata bonus award notwithstanding the fact that
Employee’s employment terminated before the end of the Plan Year.

 

(j)                                     “Participant” means any Eligible
Employee who has been awarded a bonus under paragraph 3 below.

 

(k)                                  “Performance Goal” means a performance goal
based on business criteria established by the Committee in accordance with
paragraph 3.

 

(l)                                     “Plan” means this bonus plan for key
executives of Kite Realty Group Trust, as the same may be amended from time to
time.

 

(m)                               “Plan Administrator” means the Committee, or
such other committee consisting of two or more officers of the Company as the
Committee may designate to administer the Plan with regard to Employees who are
not officers of the Company.

 

(n)                                 “Plan Year” means the fiscal year of Kite
Realty Group Trust which as of the Effective Date is the calendar year.

 

3.                                                                                     
AMOUNT OF BONUS FUND AND ALLOCATION THEREOF.

 

(a)                                Amount of Fund.  The Committee will determine
the amount of the bonus fund available for bonuses for any Plan Year.

 

(b)                                 Allocation.  The Committee shall determine
in its sole discretion the allocation of individual bonus awards for Eligible
Employees by adopting an Appendix to the Plan establishing each Eligible
Employee’s allocation of the bonus fund and the relevant Performance Goals and
business criteria for each Eligible Employee.  Any such allocation of bonus
awards shall comply with paragraph 3(d).

 

(c)                                  Adjustments.  Performance Goals shall be
subject to such adjustments as determined by the Committee to be appropriate (i)
in conjunction with an acquisition by the Company or an Affiliate, (ii) in
conjunction with any share offering by the Company or (iii) for changes in
accounting principles and/or other items that are required by generally accepted
accounting principles (“GAAP”) to be separately disclosed in the Company’s or
each Affiliate’s financial statements.

 

(d)                                 Covered Employees.

 

(i)                                     If and to the extent that the Committee
determines that a bonus to be granted under the Plan to a Participant who is
designated by the Committee as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such award shall be contingent upon

 

2

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

 

achievement of Performance Goals based on one or more of the following business
criteria for the Company, on a consolidated basis, and/or specified Affiliates
or business units of the Company (except with respect to the total shareholder
return and earnings per share criteria): (1) total shareholder return; (2) such
total shareholder return as compared to total return (on a comparable basis) of
a publicly available index such as, but not limited to, the Standard & Poor’s
500 Stock Index; (3) net income; (4) pretax earnings; (5) earnings before
interest expense, taxes, depreciation and amortization; (6) pretax operating
earnings after interest expense and before bonuses, service fees, and
extraordinary or special items; (7) operating margin; (8) earnings per share;
(9) return on equity; (10) return on capital; (11) return on investment; (12)
operating earnings; (13) working capital; (14) ratio of debt to shareholders’
equity; (15) revenue; (16) funds from operations (FFO) and (17) acquisitions.

 

(ii)                                  In the case of bonuses granted to Covered
Employees under this paragraph 3(d), Performance Goals shall be established not
later than 90 days after the beginning of any performance period applicable to
the bonus, or at such other date as may be required or permitted for
“performance-based compensation” under Code Section 162(m).  In addition, the
maximum value of a bonus awarded under the Plan to a single Covered Employee may
not exceed $2,000,000 per Plan Year.

 

(iii)                               Prior to payment of any bonus amount under
the Plan to a Covered Employee, the Committee shall certify in writing that the
Performance Goal(s) and all other material terms stated herein have been
attained.  For this purpose, the approved minutes of a Committee meeting in
which a certification is made shall be treated as a written certification.

 

4.                                                                                     
PAYMENT OF AWARDS.

 

(a)                                  Payment of Participants’ Awards. 
Settlement of bonuses awarded under the Plan shall be in cash, common shares of
the Company, or other share-based awards awarded under an equity incentive plan
of the Company, in the discretion of the Committee.

 

(b)                                 Reduction of Bonuses.  The Committee may, in
its discretion, reduce the amount of a settlement otherwise to be made in
connection with a bonus based on the performance of the Employee.

 

(c)                                  Forfeiture of Bonuses.  The Committee shall
specify the circumstances in which a bonus awarded under the Plan shall be paid
or forfeited in the event of termination of employment by the Participant prior
to the end of a Plan Year or settlement of the bonus.  An approved leave of
absence shall not be considered a termination of employment for purposes of
eligibility to receive bonuses under the Plan.

 

5.                                                                                     
DESIGNATION OF BENEFICIARIES.

 

Each Participant shall file with the Plan Administrator a written designation of
one or more persons as the Beneficiary who shall be entitled to receive the
amount, if any, payable under the Plan upon his or her death.  A Participant
may, from time to time, revoke or

 

3

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

 

change his Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Plan Administrator.  The last such
designation received by the Plan Administrator shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Plan Administrator prior to the Participant’s
death, and in no event shall it be effective as of a date prior to such receipt.

 

6.                                                                                     
ADMINISTRATION.

 

(a)                                  The Committee shall have full power and
authority to construe, interpret and administer the Plan.  All decisions,
actions or interpretations by the Committee shall be final, conclusive and
binding upon all parties.  If any person objects to any such decision, action or
interpretation, formally or informally, the expenses of the Committee and its
agents and counsel shall be chargeable against any amounts due the Participant
under the Plan.

 

(b)                                 To the maximum extent permitted by
applicable law, current and past members of the Board of Trustees or Committee
shall be indemnified and held harmless by the Company against and from any and
all loss, cost, liability or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action,
suit or proceeding to which such member may be or become a party or in which
such member may be or become involved by reason of any action taken or failure
to act under this Plan and against and from any and all amounts paid by such
member in settlement thereof (with the Company’s written approval) or paid by
such member in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding of
such member’s lack of good faith.  Indemnification pursuant to this provision is
subject to the condition that, upon the institution of any claim, action, suit,
or proceeding against such member, such member shall in writing give the Company
an opportunity, at its own expense, to handle and defend the same before such
member undertakes to handle and defend it on such member’s behalf.  The
foregoing right of indemnification shall not be exclusive of any other right to
which such member may be entitled as a matter of law or otherwise, or any power
that the Company may have to indemnify or hold such member harmless.

 

7.                                                                                     
AMENDMENT OR TERMINATION.

 

(a)                                  The Committee reserves the right at any
time to amend, suspend, or terminate the Plan in whole or in part and for any
reason and without the consent of any Participant or Beneficiary.

 

(b)                                 Notwithstanding paragraph 7(b), no
modification of the Plan by the Committee without approval of the shareholders
will materially increase the maximum amount allocated to a Covered Employee or
render any member of the Committee eligible for a bonus award.  In addition, any
modification to the material terms of the Plan (i.e., employees eligible,
business criteria on which the Performance Goal is based, or maximum amount of
bonus payable) shall require shareholder approval prior to the payment of any
benefit.

 

4

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

 

8.                                                                                     
GENERAL LIMITATIONS AND PROVISIONS.

 

(a)                                  The Company or its Affiliate, as the case
may be, shall have the right to deduct from payments of any kind otherwise due
to a Participant any federal, state, or local taxes of any kind required by law
to be withheld with respect to the vesting of or other lapse of restrictions
applicable to a bonus awarded hereunder.

 

(b)                                 Nothing contained in the Plan shall give any
Employee the right to be retained in the employment of the Company or affect the
right of the Company to dismiss or terminate or modify the compensation or
benefits of any Employee.  The adoption of the Plan shall not constitute a
contract between the Company and any Employee.  No Employee shall receive any
right to be granted an award hereunder nor shall any such award be considered as
compensation under any employee benefit plan of the Company except as otherwise
determined by the Board.

 

(c)                                  If the Committee shall find that any person
to whom any amount is payable under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor, or has died, then any
payment due him or her or his or her estate (unless a prior claim therefor has
been made by a duly appointed legal representative), may, if the Committee so
directs the Company, be paid to his or her spouse, a child, a relative, an
institution maintaining or having custody of such person, or any other person
deemed by the Committee to be a proper recipient on behalf of such person
otherwise entitled to payment.  Any such payment shall be a complete discharge
of the liability of the Plan and the Company.

 

(d)                                 Except insofar as may otherwise be required
by law, no amount payable at any time under the Plan shall be subject in any
manner to alienation by anticipation, sale, transfer, assignment, bankruptcy,
pledge, attachment, charge, or encumbrance of any kind nor in any manner be
subject to the debts or liabilities of any person and any attempt to so alienate
or subject any such amount, whether presently or thereafter payable, shall be
void.  If any person shall attempt to, or shall, alienate, sell, transfer,
assign, pledge, attach, charge, or otherwise encumber any amount payable under
the Plan, or any part thereof, or if by reason of his or her bankruptcy or other
event happening at any such time such amount would be made subject to his or her
debts or liabilities or would otherwise not be enjoyed by him or her, then the
Committee, if it so elects, may direct that such amount be withheld and that the
same or any part thereof be paid or applied to or for the benefit of such
person, his or her spouse, children or other dependents, or any of them, in such
manner and proportion as the Committee may deem proper.

 

5

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

 

(e)                                  The Participant shall have no right, title,
or interest whatsoever in or to any investments which the Company may make to
aid it in meeting its obligations hereunder.  Nothing contained in the Plan, and
no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company and
the Employee or any other person.  To the extent that any person acquires a
right to receive payments from the Company under this Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company.  All
payments to be made hereunder shall be paid in cash from the general funds of
the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payments of such amounts.

 

(f)                                    The Plan shall be governed by and
construed in accordance with the laws of the State of Maryland (but excluding
the choice of law rules thereof).

 

6

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

 

EXHIBITS TO THE EXECUTIVE BONUS PLAN*

 

Exhibit A

Exclusion From Affiliates

 

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

*      The registrant agrees to furnish, supplementally, a copy of omitted
Exhibit A upon request.

 

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