Exhibit 10.8


 


ALVIN E. KITE, JR.

EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of August 16,
2004, by and between KITE REALTY GROUP TRUST, a Maryland real estate investment
trust (the “Company”), and Alvin
E. Kite, Jr. (the “Executive”).


 


WHEREAS, the Company and Kite Realty Group,
L.P., the general partner of which is the Company (“Kite Realty”), are engaging in various related transactions
pursuant to which, among other things, (i) Kite Realty will acquire interests
in various entities that own or lease real estate properties in which certain
persons affiliated with the Company, including the Executive, have interests,
(ii) the Company will acquire interests in certain service businesses currently
owned by persons affiliated with the Company, including certain businesses of
the Executive (the “Service Companies”)
and (iii) the Company will effect an initial public offering of its common
shares and contribute the proceeds therefrom for a like number of units of
partnership interest in Kite Realty (the “Kite IPO,”
and together with the other transactions described above, the “Kite IPO Transactions”);


 


WHEREAS, the Executive is currently employed
by one of the Service Companies, KMI Realty Advisors, Inc. (“KMI Realty Advisors”), or an affiliate of
KMI Realty Advisors; and


 


WHEREAS, in connection with the Kite IPO
Transactions, the Company wishes to offer employment to the Executive, and the
Executive wishes to accept such offer, on the terms set forth below.


 


Accordingly, the parties hereto agree as
follows:


 


1.                                       Term.  The Company hereby employs the Executive,
and the Executive hereby accepts such employment for an initial term commencing
as of the date hereof and ending on December 31, 2007, unless sooner
terminated in accordance with the provisions of Section 4 or
Section 5 (the period during which the Executive is employed hereunder
being hereinafter referred to as the “Term”).  The Term shall be subject to automatic
one-year renewals unless either party hereto notifies the other, in accordance
with Section 7.4, of non-renewal at least ninety (90) days prior to the
end of any such Term.  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.                                       Duties.  The Executive, in his capacity as Chairman
of the Board and an executive officer of the Company, shall faithfully perform
for the Company the duties of said office 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 of Trustees of the Company (the “Board”) (including the performance of
services for, and serving on the Board of Directors of, any subsidiary or
affiliate of the Company without any additional compensation).  The Executive shall devote a sufficient
portion of the Executive’s business time and effort to the performance of the
Executive’s duties hereunder.  The Board
may delegate its authority to take any action under this Agreement to the
Compensation Committee of the Board of Trustees (the “Compensation Committee”).


 

















 


3.                                       Compensation.


 


3.1                                 Salary.  The Company shall pay the Executive during
the Term a base salary at the rate of $150,000 per annum (the “Annual Salary”), in accordance with the
customary payroll practices of the Company applicable to senior executives
generally.  The Annual Salary may be
increased annually by an amount as may be approved by the Board or the Compensation
Committee, and, upon such increase, the increased amount shall thereafter be
deemed to be the Annual Salary for purposes of this Agreement.


 


3.2                                 Bonus.  The Executive will be eligible to
participate in the Company’s annual bonus plan (the “Bonus Plan”), the terms of which will be established by the
Compensation Committee.  The Executive
may be awarded such restricted shares, share options and other equity-based
awards under the Company’s equity compensation plan (“Equity Awards”) as the Compensation
Committee determines to be appropriate.


 


3.3                                 Benefits – In
General.  The Executive shall be
permitted during the Term 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, the Company shall maintain customary liability insurance for trustees
and officers and list the Executive as a covered officer.


 


With respect to each such
benefit plan and program, service with KMI Realty Advisors or any of its
affiliates (as applicable) shall be included for purposes of determining
eligibility to participate (including waiting periods, and without being
subject to any entry date requirement after the waiting period has been
satisfied), vesting (as applicable) and entitlement to benefits. The medical plan
or plans maintained by the Company shall waive all limitations as to
pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements. With respect to vacation benefits
provided by the Company, the vacation benefit of Executive shall include all
hours of accrued but unused vacation and sick time hours, respectively, with
KMI Realty Advisors or any of its affiliates.


 


3.4                                 Vacation.  During the Term, the Executive shall be
entitled to vacation of four (4) weeks per year.


 


3.5                                 Automobile.  During the Term, the Company will provide
the Executive an allowance of $9,000 per year for the use of an automobile
(including the payment of vehicle insurance). 
At the option of the Company, in lieu of providing such allowance, the
Company will provide the Executive with an automobile of suitable standard to
the Executive’s position.


 


3.6                                 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 in the performance of the Executive’s services under this Agreement;
provided that the Executive submits such expenses in accordance with the
policies applicable to senior executives of the Company generally.


 


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4.                                       Termination
upon Death, Disability or Retirement. 
If the Executive dies during the Term, the obligations of the Company to
or with respect to the Executive shall terminate in their entirety except as
otherwise provided under this Section 4. 
If 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), the Company
shall have the right, to the extent permitted by law, to terminate the
employment of the Executive upon notice in writing to the Executive and such
termination in and of itself shall not be, nor shall it be deemed to be, a
breach of this Agreement; provided, that, the Company will have no right to
terminate the Executive’s employment 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 90 days of the date the Executive receives notice of
such termination.


 


Upon death, other termination
of employment by virtue of disability or upon termination by the Executive
without Good Reason (as defined below) (i) the Executive (or the Executive’s
estate or beneficiaries in the case of the death of the Executive) shall have
no right to receive any compensation or benefit hereunder on and after the
Effective Date of the Termination other than Annual Salary earned and accrued
under this Agreement prior to the Effective Date of the Termination, any bonus
for the prior year not yet paid, and other benefits, including payment for
accrued but unused vacation, earned and accrued under this Agreement prior to
the Effective Date of the Termination (and reimbursement under this Agreement
for expenses incurred but not paid prior to the Effective Date of the
Termination) and an amount equal to the product of (x) the Executive’s target
annual bonus for the fiscal year of the Executive’s death, disability or
termination without Good Reason and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Effective Date of the
Termination, and the denominator of which is 365; (ii) all Equity Awards held
by the Executive shall become fully vested and exercisable; and (iii) this
Agreement shall otherwise terminate upon the Effective Date of the Termination
and there shall be no further rights with respect to the Executive hereunder
(except as provided in Section 7.13). 
For purposes of this Section 4, the “Effective Date of the Termination”
shall mean the date of death, the date on which a notice of termination by
virtue of disability is given or any later date (within thirty (30) days after
the giving of such notice) set forth in such notice of termination, or in the
case of termination by the Executive without Good Reason, the date of
termination specified in such Executive’s notice of termination.


 


For the avoidance of doubt, the
Executive acknowledges and agrees that the payments set forth in this
Section 4 constitute liquidated damages for termination of his employment
during the Term upon death, by virtue of disability or by the Executive without
Good Reason.


 


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5.                                       Other
Terminations of Employment.


 


5.1                                 Termination for
Cause; Termination of Employment by the Executive Without Good Reason.


 


(a)                                  For purposes of this
Agreement, “Cause” shall mean:


 


(i)                                     the Executive’s
conviction for (or pleading nolo contendere to) any felony;


 


(ii)                                  the Executive’s
commission of an 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;


 


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


 


(iv)                              any material violation by
the Executive of the covenants contained in Section 6 or that certain
Non-Competition Agreement dated as of the date hereof between the Executive and
the Company (the “Non-Competition Agreement”);
or


 


(v)                                 the Executive’s
willful and continuing material breach of this Agreement.


 


For purposes of this Section 5.1, no
act, or failure to act, by 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 subsidiaries.  Notwithstanding the foregoing, if there
exists (without regard to this sentence) an event or condition that constitutes
Cause under clause (iii), (iv) or (v) above, the Executive shall have 30 days
from the date written notice is given by the Company of such event or condition
to cure such event or condition and, if the Executive does so, such event or
condition shall not constitute Cause hereunder.


 


(b)                                 For purposes of this
Agreement, “Good Reason” shall
mean, unless otherwise consented to by the Executive:


 


(i)                                     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
subsidiaries;


 


(ii)                                  a reduction in Annual
Salary of the Executive except in connection with a reduction in compensation
generally applicable to senior management employees of the Company;


 


(iii)                               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;


 


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(iv)                              a 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);


 


(v)                                 a requirement by the
Company that the Executive’s work location be moved more than fifty (50) miles
from the Company’s principal place of business in Indianapolis, Indiana; or


 


(vi)                              the Company’s material
and willful breach of this Agreement.


 


Notwithstanding the foregoing, if there
exists (without regard to this sentence) an event or condition that constitutes
Good Reason under clause (i), (ii), (v) or (vi) above, the Company shall have
30 days from the date on which the Executive gives the written notice thereof
to cure such


 


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event or condition and, if the Company does
so, such event or condition shall not constitute Good Reason hereunder.  Further, an event or condition shall cease to
constitute Good Reason one (1) year after the event or condition first occurs.


 


(c)                                  The Company may
terminate the Executive’s employment hereunder for Cause and such termination
in and of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement.  If the Company terminates
the Executive for Cause, (i) the Executive shall have no right to receive any
compensation or benefit hereunder on and after the Effective Date of the
Termination other than Annual Salary and other benefits, including payment for
accrued but unused vacation (but excluding any bonuses except as provided in
the Bonus Plan) earned and accrued under this Agreement prior to the Effective
Date of the Termination (and reimbursement under this Agreement for expenses
incurred but not paid prior to the Effective Date of the Termination); and (ii)
this Agreement shall otherwise terminate upon the Effective Date of the
Termination and the Executive shall have no further rights hereunder (except as
provided in Section 7.13).  For purposes
of this Section 5.1(c), the “Effective
Date of the Termination” shall mean the date on which a notice of
termination is given or any later date (within thirty (30) days after the
giving of such notice) set forth in such notice of termination.


 


(d)                                 In the event the
Company elects not to renew this Agreement as contemplated in Section 1
above, the Executive shall receive (i) a cash payment equal to one (1) times
the sum of: (x) the Executive’s Annual Salary in effect on the day of
expiration of the Term, and (y) the average bonus actually paid to the
Executive with respect to the prior three (3) calendar years, payable no later
than 30 days after the day of expiration of the Term; and (ii) all Equity
Awards held by the Executive shall become fully vested and exercisable.


 


5.2                                 Termination Without
Cause; Termination for Good Reason. 
The Company may terminate the Executive’s employment at any time without
Cause, for any reason or no reason and the Executive may terminate the
Executive’s employment with the Company for Good Reason.  If the Company or the Executive terminates
the Executive’s employment and such termination is not described in
Section 4 or Section 5.1, (i) the Executive shall have no right to
receive any compensation or benefit hereunder on and after the Effective Date
of the Termination other than Annual Salary earned and accrued under this
Agreement prior to the Effective Date of the Termination, any bonus for the
prior year not yet paid, and other benefits, including payment for accrued but
unused vacation, earned and accrued under this Agreement prior to the Effective
Date of the Termination (and reimbursement under this Agreement for expenses
incurred but not paid prior to the Effective Date of the Termination) and an
amount equal to the product of (x) the Executive’s target annual bonus for the
fiscal year of the Executive’s termination of employment and (y) a fraction,
the numerator of which is the number of days in the current fiscal year through
the Effective Date of the Termination, and the denominator of which is 365;
(ii) the Executive shall receive a cash payment equal to the Severance Payment
payable no later than 30 days after the Effective Date of the Termination;
(iii) for one (1) year after the Effective Date of the Termination, the Company
shall continue 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; provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical,


 


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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; (iv) all Equity
Awards held by the Executive shall become fully vested and exercisable; and (v)
this Agreement shall otherwise terminate upon the Effective Date of the Termination
and the Executive shall have no further rights hereunder (except as provided in
Section 7.13).  The “Severance Payment” means three (3) times
the sum of: (i) the Executive’s Annual Salary in effect on the day of
termination and (ii) the Executive’s Average Annual Bonus.  The Executive’s “Average Annual Bonus” means the average bonus actually paid to
the Executive with respect to the prior three (3) calendar years.  For purposes of this Section 5.2, the “Effective Date of the Termination” shall mean
the date on which a notice of termination is given or any later date (within
thirty (30) days after the giving of such notice) set forth in such notice of
termination, or in the case of termination of employment by the Executive for
Good Reason, the date of termination specified in such Executive’s notice of
termination.


 


5.3                                 Nature of Payments.  For the avoidance of doubt, the Executive
acknowledges and agrees that the payments set forth in this Section 5
constitute liquidated damages for termination of his employment during the
Term.


 


6.                                       Confidential
and Proprietary Information.


 


6.1                                 Confidential
Information.  The Executive shall
keep secret and retain in strictest confidence, and shall not use for his
personal benefit or the benefit of others or directly or indirectly disclose,
except as may be required or appropriate in connection with his carrying out
his duties under this Agreement, 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 (the “Confidential Company Information”), except
with the Company’s express written consent or as may otherwise be required by
law or any legal process.


 


6.2                                 Return of
Documents; Rights to Products.  All
memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof) made, produced or compiled by the Executive
or made available to the Executive concerning the businesses and investments of
the Company and its affiliates shall be the Company’s property and shall be
delivered to the Company at any time on request.  The Executive shall assign to the Company all rights to trade
secrets and other products relating to the Company’s business developed by him
alone or in conjunction with others at any time while employed by the Company.


 


6.3                                 Rights and Remedies
upon Breach.  The Executive
acknowledges and agrees that any breach by him of any of the provisions of this
Section 6 (the “RestrictiveCovenants”) would result in
irreparable injury and damage for which money damages would not provide an
adequate remedy.  Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the Restrictive Covenants,
the Company and its affiliates shall have the right and remedy to have the
Restrictive Covenants specifically enforced (without posting bond and without
the


 


7

















 


need to prove damages) by any
court having equity jurisdiction, including, without limitation, the right to
an entry against the Executive of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations,
threatened or actual, and whether or not then continuing, of such
covenants.  This right and remedy shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Company and its affiliates under law or in equity (including, without
limitation, the recovery of damages). 
The existence of any claim or cause of action by the Executive, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement of the Restrictive Covenants.


 


7.                                       Other
Provisions.


 


7.1                                 Severability.  The Executive acknowledges and agrees that
the Executive has had an opportunity to seek advice of counsel in connection
with this Agreement.  If it is
determined that any of the provisions of this Agreement, or any part thereof,
is invalid or unenforceable, the remainder of the provisions of this Agreement
shall not thereby be affected and shall be given full affect, without regard to
the invalid portions.


 


7.2                                 Enforceability;
Jurisdictions.  The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
the Restrictive Covenants.  If the
courts of any one or more of such jurisdictions hold the Restrictive Covenants
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 such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants 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.


 


7.3                                 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.


 


7.4                                 Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing.  Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly delivered (i) two business days after it is
sent by registered or certified mail, return receipt requested, postage
prepaid, (ii) when received if it is sent by facsimile communication during
normal business hours on a business day or one business day after it is sent by
facsimile 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, in each case to the intended recipient as set forth below:


 


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(i)                                     if to the
Executive, to the address set forth in the records of the Company


 


 (ii)                               if
to the Company


 


Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN  46204

Attn: Daniel R. Sink

Telecopy No.: (317) 577-5605


 


with copies in either case (which shall not constitute notice) to:


 


Hogan & Hartson L.L.P.


555 13th Street, NW


Washington, DC 20004


Attention:  William L. Neff,
Esq.


Facsimile:  (202) 637-5910


and


 


Barnes & Thornburg LLP

11 South Meridian

Indianapolis, IN 46204

Attention: Robert D. MacGill, Esq.

Facsimile: (317) 231-7433


 


Any such person may by notice given in accordance
with this Section to the other parties hereto designate another address or
person for receipt by such person of notices hereunder.


 


7.5                                 Entire Agreement.  This Agreement, together with the exhibits
hereto and the Noncompetition Agreement, contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with the Company or its subsidiaries (or any
predecessor of either).


 


7.6                                 Waivers and
Amendments.  This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance.  No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any such right, power or privilege nor any single or partial
exercise of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.


 


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7.7                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.


 


7.8                                 Assignment.  This Agreement, and the Executive’s rights
and obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void.  In the event of any Change in Control, the
Company may assign this Agreement and its rights hereunder.


 


7.9                                 Withholding.  The Company shall be entitled to withhold
from any payments or deemed payments any amount of withholding required by
law.  No other taxes, fees, impositions,
duties or other charges or offsets of any kind shall be deducted or withheld
from amounts payable hereunder, unless otherwise required by law.


 


7.10                           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 hereunder be
subject to offset in the event the Executive does mitigate.


 


7.11                           Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.


 


7.12                           Counterparts.  This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original but all such counterparts together shall
constitute one and the same instrument. 
Each counterpart may consist of two copies hereof each signed by one of
the parties hereto.


 


7.13                           Survival.  Anything contained in this Agreement to the
contrary notwithstanding, the provisions of Sections 6 and 7 (to the extent
necessary to effectuate the survival of Sections 6 and 7) shall survive
termination of this Agreement and any termination of the Executive’s employment
hereunder.


 


7.14                           Existing Agreements.  Executive represents to the Company that the
Executive is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit the Executive from executing this Agreement or limit the
Executive’s ability to fulfill the Executive’s responsibilities hereunder.


 


7.15                           Headings.  The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.


 


7.16                           Parachute Provisions.  If any amount payable to or other benefit
receivable by the Executive pursuant to this Agreement is deemed to constitute
a Parachute Payment (as defined below), alone or when added to any other amount
payable or paid to or other benefit receivable or received by the Executive
which is deemed to constitute a Parachute Payment (whether or not under an
existing plan, arrangement or other agreement), and would result in the
imposition on the Executive of an excise tax under Section 4999 of the
Internal Revenue Code of


 


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1986, as amended, then, in
addition to any other benefits to which the Executive is entitled under this
Agreement, the Executive shall be paid by the Company an amount in cash equal
to the sum of the excise taxes payable by the Executive by reason of receiving
Parachute Payments plus the amount necessary to put the Executive in the same
after-tax position (taking into account any and all applicable federal, state
and local excise, income or other taxes at the highest applicable rates on such
Parachute Payments and on any payments under this Section 7.17 ) as if no
excise taxes had been imposed with respect to Parachute Payments.  The amount of any payment under this
Section 7.17 shall be computed by a certified public accounting firm
mutually and reasonably acceptable to the Executive and the Company, the
computation expenses of which shall be paid by the Company.  “Parachute
Payment” shall mean any payment deemed to constitute a “parachute
payment” as defined in Section 280G of the Internal Revenue Code of 1986,
as amended.


 


7.17                           Certain Definitions.  For purposes of this Agreement:


 


(a)                                  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 A,
as such Exhibit A is updated from time to time by the mutual agreement
of the parties, shall not be affiliates of the Company.


 


(b)                                 A “business day” means
the period from 9:00 am to 5:00 pm on any weekday that is not a banking holiday
in New York City, New York.


 


(c)                                  A “subsidiary” of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its board of directors or other governing body (or, if
there are no such voting interests or no board of directors or other governing
body, 50% or more of the equity interests of which) is owned directly or
indirectly by such first person.


 


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


 


	
   

  	
  KITE REALTY GROUP TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John A. Kite

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ ALVIN E. KITE, JR.

  	
   

  
	
   

  	
  ALVIN E. KITE, JR.

  



 


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EXHIBITS TO THE EMPLOYMENT AGREEMENT*


 


 


	
  Exhibit A

  	
   

  	
  Exclusion From Affiliates

  



 


 












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


 


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