Document:

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                              SEPARATION AGREEMENT

     This Agreement (the "Agreement") is entered into this 9th day of March,
2001 by and between Norbert J. Treonis ("Treonis") and Inland Real Estate
Corporation, a Maryland Corporation (the "Company").

                                    RECITALS

     A. Treonis has served as the Company's President and Chief Executive
Officer pursuant to a written employment agreement dated as of July 1, 2000 (the
"Old Agreement").

     B. On or about December 14, 2000 the July 1, 2000 employment agreement was
terminated and a new employment agreement executed between the Company and
Treonis (the "New Agreement").

     C. Treonis has served as the Company's President and Chief Executive
Officer since July 1, 2000.

     D. Treonis has offered to resign that position and the Company has agreed
to accept that resignation subject to the mutually agreed upon conditions
contained herein.

     E. Treonis and the Company have entered into this Agreement to settle all
potential disputes and resolve all questions between them with respect to the
rights and obligations of both parties.

     NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereby agree as follows:

     1. Concurrent with execution of this Agreement, Treonis shall submit a
        letter of resignation from his positions as President, Chief Executive
        Officer and a Director of the Company in the form attached as Exhibit A.

     2. The Company will pay Treonis the amount of $34,801.92. Treonis and the
        Company agree that the payment includes no amount attributable to any
        Initial Restricted Shares or Long-term Grant Restricted Shares as
        defined under the terms of the New Agreement and such shares are
        forfeited. Treonis and the Company agree that the issuance of any shares
        of stock of the Company to Treonis be and are hereby cancelled and
        Treonis hereby assigns to the Company any rights which he may have to
        any such shares and any certificates representing any such shares.
        Treonis will execute any documents requested by the Company to effect
        any transfer, including but not limited to, appropriate stock powers,
        all duly endorsed in blank. Treonis represents and warrants that he has
        not transferred, pledged, assigned, sold, or otherwise conveyed the
        shares or any interest in the shares.

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     3. The company releases Treonis from all claims, actions, allegations,
        causes of action, demands, defenses, counterclaims, setoffs, judgments,
        liabilities, rights or declarations whatsoever, whether in law or in
        equity, belonging to the Company which have arisen, could have arisen,
        arise now or may hereafter arise by reason of any matter, cause or thing
        whatsoever, on or at any time prior to the date hereof, whether known or
        unknown, whether liquidated or unliquidated and whether or not brought
        in any court or forum whatsoever and which relates to or arises from
        execution of the New Agreement, excepting only claims brought to enforce
        this Agreement.

     4. Treonis releases the Company, its officers, agents, directors and
        shareholders from all claims, actions, allegations, causes of action,
        demands, defenses, counterclaims, setoffs, judgments, liabilities,
        rights or declarations whatsoever, whether in law or equity, belonging
        to Treonis which have arisen, could have arisen, arise now or may
        hereafter arise by reason of any matter, cause or thing whatsoever, on
        or at any time prior to the date hereof, whether known or unknown,
        whether liquidated or unliquidated and whether or not brought in any
        court or forum whatsoever and which relates to or arises from execution
        of the New Agreement, excepting only claims brought to enforce this
        Agreement or any claim for indemnification arising from his employment
        to the extent the right to indemnification is contained in the Company's
        Bylaws.

     5. This Agreement is not intended to constitute and should not be construed
        as constituting an admission of fault, wrong doing or liability by any
        party relating to an employment agreement between Treonis and this
        Company, provided, further, that nothing in this Agreement shall be
        construed as a ratification, waiver or admission as to the validity of
        the New Agreement by either party.

     6. This Agreement constitutes the entire agreement between the parties with
        respect to the subject matter hereof and supersedes, vacates and
        terminates any previous agreement between Treonis and the Company
        regarding the terms and condition of his employment or compensation.

     7. This Agreement may be executed in multiple counterparts, each of which
        shall be deemed an original and all such counterparts shall constitute
        but one instrument.

     8. This Agreement shall be governed and controlled as to validity,
        enforcement, interpretation, construction, effect and in all other
        respects by the internal laws, but not the laws of conflict, of the
        State of Illinois applicable to contracts made in that state.

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     IN WITNESS WHEREOF, the parties have hereto executed this Agreement as of
the date first above written.

NORBERT J. TREONIS                         INLAND REAL ESTATE CORPORATION

/s/ Norbert J. Treonis                     By: /s/ Robert D. Parks
-------------------------                      ---------------------------------

                                           Its: Chairman
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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 14th day of
December, 2000, by and between INLAND REAL ESTATE CORPORATION, a Maryland
corporation (the "Company"), and Norbert J. Treonis (the "Executive").

                                    RECITALS:

     A. The Company is a real estate investment trust which owns, operates and
acquires neighborhood retail centers and community centers within a 400 mile
radius of its headquarters in Oak Brook, Illinois (the "Business").

     B. Executive has served as the Company's President and Chief Executive
Officer pursuant to an employment agreement, dated as of July 1, 2000, by and
between the Company and Executive (the "Prior Agreement") and during his
employment thereunder, Executive has demonstrated certain unique and particular
talents and abilities with regard to the Business.

     C. The Company desires to continue to assure itself of the availability of
the talents and abilities of Executive, by entering into a new employment
agreement compensating Executive at a level commensurate with compensation
provided to executives of companies similarly situated to the Company.

     D. Executive desires to continue to be employed by the Company, subject to
the terms, conditions and covenants hereinafter set forth.

     E. The Company and Executive desire to terminate the Prior Agreement and
all pre-existing employment agreements, whether written or oral, and all other
agreements, if any, regarding Executive's employment with the Company, and
intend to have this Agreement govern instead.

     F. As a condition of the Company to enter into this Agreement, Executive
has agreed to restrict his ability to enter into competition with the Company.

     NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, Executive and the Company hereby
agree as follows:

                                    ARTICLE I

                                   EMPLOYMENT

     1.1 Employment.

     (a) The Company hereby employs, engages and hires Executive, and Executive
hereby accepts employment, upon the terms and conditions set forth in this
Agreement. Effective as of

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January 1, 2001 (the "Effective Date"), Executive shall serve as President and
Chief Executive Officer, with duties commensurate with such position and such
other duties and responsibilities as assigned from time to time by the Company.

     (b) In addition, Executive shall provide advice, consultation and services
to any other entities which control, are controlled by or are under common
control with the Company now or in the future (together "Affiliates"), as may be
requested by the Company.

     1.2 Activities and Duties During Employment. Executive represents and
warrants to the Company that he is free to accept full-time employment with the
Company, and that he has no prior or other commitments or obligations of any
kind to anyone else which would hinder or interfere with his acceptance of his
obligations under this Agreement, or the exercise of his reasonable commercial
efforts as an employee of the Company. During the Employment Term (as defined
below), Executive agrees:

     (a) to faithfully serve and further the interests of the Company in every
lawful way, giving honest, diligent, loyal and cooperative service to the
Company and its Affiliates;

     (b) to comply with all reasonable rules and policies which are consistent
with the terms of this Agreement and which, from time to time, may be adopted by
the Company and/or its Affiliates; and

     (c) to devote all of his business time, attention and efforts to the
faithful and diligent performance of his services to the Company and its
Affiliates.

                                   ARTICLE II

                                      TERM

     2.1 Term. The term of employment under this Agreement shall commence on the
Effective Date and shall last for a period of three (3) years (the "Initial
Term"). Such term shall automatically be renewed for successive one-year periods
thereafter unless terminated by either party by written notice not less than 30
days prior to the expiration of the then-current term. The term of Executive's
employment hereunder may also be terminated as provided in Section 2.2 (the
Initial Term, as it may be extended or terminated, is herein referred to as the
"Employment Term").

     2.2 Termination. The Employment Term and employment of Executive may be
terminated as follows:

     (a) By the Company immediately for Cause (as hereinafter defined).

     (b) By the Company immediately without Cause.

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     (c) Automatically, without the action of either party, upon the death of
Executive.

     (d) By either party upon a determination of Total Disability (as
hereinafter defined) of Executive.

     (e) Voluntarily by Executive.

     (f) By Executive, immediately for Good Reason (as hereinafter defined).

     (g) By Executive, upon a "Change of Control" and for "Good Reason" (as
such terms are hereinafter defined) upon written notice to the Company.

     2.3 Definitions of "Cause," "Total Disability," Good Reason" and "Change of
Control".

     (a) For the purpose of this Agreement, "CAUSE" shall mean: (I) conduct
amounting to fraud, embezzlement or illegal misconduct in connection with
Executive's duties under this Agreement and as an employee of the Company; (II)
conduct that the Company reasonably believes has brought the Company into
substantial public disgrace or disrepute; (III) failure to perform his duties
hereunder as reasonably directed by the Company after providing written notice
of such failure to Executive and Executive has failed to cure such
non-performance within ten days of receiving such notice; (IV) gross negligence
or willful misconduct with respect to the Company, its clients, its employees
and its activities; or (V) any other material breach of this Agreement or any
other agreement to which Executive and the Company are a party or any material
breach of any written policy adopted by the Company concerning conflicts of
interest, standards of business conduct or fair employment practices and any
other similar matter, provided that the Company has provided written notice of
the breach to Executive and Executive has failed to cure the breach within ten
(10) days of receiving such notice.

     (b) Executive shall be determined to have a "TOTAL DISABILITY" for purposes
of this Agreement if he is unable by reason of accident or illness to
substantially perform his employment duties, and is expected to be in such
condition for periods totaling six (6) months (whether or not consecutive)
during any period of twelve (12) months. The determination of whether a Total
Disability has occurred shall be based on the determination of a physician
mutually acceptable to the Company and Executive. Nothing herein shall limit
Executive's right to receive any payments to which Executive may be entitled
under any disability or employee benefit plan of the Company or under any
disability or insurance policy or plan. During a period of Total Disability
prior to termination hereunder, Executive shall continue to receive his full
compensation (including base salary) and benefits.

     (c) "GOOD REASON" will mean any of the following events which have not been
cured within ten (10) days following the Company's receipt of Executive's
written notice specifying the events or factors constituting such Good Reason:

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     (I) the assignment to Executive of duties which constitute a material
reduction in Executive's title or authority and which is materially inconsistent
with respect to Executive's position as contemplated by this Agreement;

     (II) the Company requiring Executive to relocate his principal residence to
a location outside the Greater Chicago Metropolitan Area in order to perform his
duties and responsibilities hereunder;

     (III) the reduction of Executive's base salary or other compensation and
benefits during the Employment Term to less than the amount of the Base Salary
and other compensation and benefits as set forth in Section 3.1 below; and

     (IV) a material breach by the Company of the provisions of this Agreement.

     (d) "CHANGE OF CONTROL" shall mean:

     (I) that the members of the Company's board of directors as of the date of
this Agreement fail to constitute a majority of the members of the board
provided, however, that any individual becoming a member of the board who is
nominated by the board shall be treated as if he or she were a member of the
board as of the date of this Agreement;

     (II) the disposition of all, or substantially all, of the assets of the
Company;

     (III) the merger or consolidation of the Company with an unaffiliated third
party and the Company is not the surviving entity of such transaction;

     (IV) any "person," as such term is used in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, not affiliated with The Inland Group, Inc.,
becomes a "beneficial owner," as such term is used in Rule 13d-3 promulgated
under that Act, of 25% or more of the voting shares of the Company; and

     (V) the termination and liquidation of the Company.

                                   ARTICLE III

                            COMPENSATION AND BENEFITS

     3.1 Compensation.

     (a) Base Salary. During the Initial Term, the Company shall pay Executive a
base salary of Five Hundred Thousand Dollars ($500,000) per year (the "Base
Salary"). At the expiration of the Initial Term, and again at the expiration of
each renewal of the Initial Term, the

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Company shall review Executive's Base Salary to determine an appropriate Base
Salary to be effective at the beginning of the renewal of the Initial Term or
any subsequent renewal.

     (b) Annual Incentive Bonus. The Company shall, in addition to Executive's
Base Salary, pay Executive an Annual Incentive Bonus which shall be payable
within 90 days of the end of each fiscal year, in accordance with the formula
set forth on Exhibit A, attached hereto and made a part hereof.

     (c) Initial Stock Grant. On the Effective Date, Executive shall receive
90,910 shares of common stock of the Company (the "Initial Restricted Shares"),
subject to the following restrictions and conditions:

     (I) Executive shall be record owner of the Initial Restricted Shares, but
all Initial Restricted Shares shall be held by the Company for the benefit of
Executive subject to forfeiture in the amounts and conditions provided below,
and simultaneously with issuance of such Initial Restricted Shares, Executive
shall execute and deliver a blank stock power allowing the Company to transfer
such Initial Restricted Shares in accordance with the terms and conditions set
forth below:

     (A) If, prior to the first anniversary of the Effective Date, the
Employment Term has not been terminated pursuant to Sections 2.2(a) or (e),
18,182 of the Initial Restricted Shares then being held by the Company shall be
released to Executive on the first anniversary of the Effective Date and shall
no longer be subject to forfeiture by Executive, but the amount of 90,910
Initial Restricted Shares shall be forfeited by Executive and transferred to the
Company only if the Employment Term has been terminated pursuant to Sections
2.2(a) or (e) prior to the first anniversary of the Effective Date;

     (B) If, prior to the second anniversary of the Effective Date, the
Employment Term has not been terminated pursuant to Sections 2.2(a) or (e),
18,182 of the Initial Restricted Shares then being held by the Company shall be
released to Executive on the second anniversary of the Effective Date and shall
no longer be subject to forfeiture by Executive, but the amount of 72,728
Initial Restricted Shares shall be forfeited by Executive and transferred to the
Company only if the Employment Term has been terminated pursuant to Sections
2.2(a) or (e), on any date which is on or after the first anniversary of the
Effective Date and prior to the second anniversary of the Effective Date;

     (C) If, prior to the third anniversary of the Effective Date, the
Employment Term has not been terminated pursuant to Sections 2.2(a) or (e),
18,182 of the Initial Restricted Shares then being held by the Company shall be
released to Executive on the third anniversary of the Effective Date and shall
no longer be subject to forfeiture by Executive, but the amount of 54,546
Initial Restricted Shares shall be forfeited by Executive and transferred to the
Company only if the Employment Term has been terminated pursuant to Sections
2.2(a) or (e) on any date which is on or after the second anniversary of the
Effective Date and prior to the third anniversary of the Effective Date;

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     (D) On the third anniversary of the Effective Date should the Company
exercise its right not to renew this Agreement, as provided in Section 2.1, any
Initial Restricted Shares issued to Executive under this Agreement shall
immediately vest and shall no longer be subject to forfeiture by Executive;

     (E) If, prior to the fourth anniversary of the Effective Date, the
Employment Term has not been terminated pursuant to Sections 2.2(a) or (e),
18,182 of the Initial Restricted Shares then being held by the Company shall be
released to Executive on the fourth anniversary of the Effective Date and shall
no longer be subject to forfeiture by Executive, but the amount of 36,364
Initial Restricted Shares shall be forfeited by Executive and transferred to the
Company only if the Employment Term has been terminated pursuant to Sections
2.2(a) or (e), on any date which is on or after the third anniversary of the
Effective Date and prior to the fourth anniversary of the Effective Date; and

     (F) If, prior to the fifth anniversary of the Effective Date, the
Employment Term has not been terminated pursuant to Sections 2.2(a) or (e),
18,182 of the Initial Restricted Shares then being held by the Company shall be
released to Executive on the fifth anniversary of the Effective Date and shall
no longer be subject to forfeiture by Executive, but the amount of 18,182
Initial Restricted Shares shall be forfeited by Executive and transferred to the
Company only if the Employment Term has been terminated pursuant to Sections
2.2(a) or (e), on any date which is on or after the fourth anniversary of the
Effective Date and prior to the fifth anniversary of the Effective Date.

     (II) Executive may not sell, transfer, hypothecate, pledge or assign any
Initial Restricted Shares which remain subject to forfeiture pursuant to clauses
(A), (B), (C), (D), (E) or (F) immediately above.

     (III) Upon the occurrence of any forfeiture of Initial Restricted Shares,
Executive shall immediately take all actions necessary to cause the Company to
be immediately vested with full and complete ownership of such forfeited Initial
Restricted Shares.

     (IV) Prior to any forfeiture, Executive may exercise all rights of a
stockholder, including the right to vote and receive dividends.

     (V) Executive acknowledges that the Company's common stock is publicly held
and is subject to various federal and state securities laws and that the Initial
Restricted Shares are being issued pursuant to such laws and agrees that he will
comply with any and all applicable laws and regulations governing the Initial
Restricted Shares.

     (VI) If the Company shall file a registration statement (other than a
registration statement on Form S-4 or any successor form) with the Securities
and Exchange Commission while the Initial Restricted Shares are outstanding, the
Company shall give Executive at least 30 days' prior written notice of the
filing of such registration statement. If requested by Executive in writing
within 20 days after receipt of any such notice, the Company shall, at the
Company's sole expense (other than the fees and disbursements of counsel for
Executive, and the underwriting discounts,

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if any, payable in respect of the Initial Restricted Shares sold by Executive),
register all or, at Executive's option, any portion of the Initial Restricted
Shares requested by Executive, concurrently with the registration of such other
securities, all to the extent requisite to permit the public offering and sale
of such other securities, and will use its best efforts through its officers,
directors, auditors and counsel to cause such registration statement to become
effective as promptly as practicable. Notwithstanding the forgoing, if the
managing underwriter of any such offering shall advise a Company in writing
that, in its opinion, the distribution of all or a portion of the Initial
Restricted Shares requested to be included in the registration concurrently with
the securities being registered by the Company and the securities of other
holders of Company securities would materially adversely affect the distribution
of such securities by the Company for its own account, the Company will include
in such registration first, the securities that the Company proposes to sell,
second, the registerable securities requested to be included in such
registration and other securities requested be included in such registration by
holders who have registration rights, pro rata among the holders of such
registerable securities and such other securities on the basis of the number of
shares which are owned by such holders, and third, other securities requested to
be included in such registration.

     (d) Annual Long-Term Share Award. So long as the Employment Term has not
been terminated for any reason, on each anniversary of the Effective Date,
Executive shall receive additional shares of the common stock of the Company
("Long Term Grant Restricted Shares"), subject to the same restrictions as
applicable to the Initial Restricted Shares, in accordance with the schedule set
forth on Exhibit B, attached hereto and made a part hereof. Notwithstanding the
restrictions applicable to the Initial Restricted Shares, twenty percent (20%)
of the Long Term Grant Restricted Shares shall vest on each successive yearly
anniversary of the date such Long Term Grant Restricted Shares were granted to
Executive. Except as provided in the immediately preceding sentence, the Long
Term Grant Restricted Shares granted pursuant to this Section 3.2(d) shall be
subject to the rights and forfeiture provisions set forth in Section 3.2(c)
herein.

     3.2 Payment. Base Salary shall be payable in intervals in accordance with
the general payroll payment practice of the Company for executive level
employees; except that any payment relating to the termination of Executive
shall be paid as a lump sum payment within 15 days of such termination.

     3.3 Business Expenses.

     (a) Reimbursement. The Company shall reimburse Executive for all ordinary
and necessary business expenses incurred by him in connection with the
performance of his duties hereunder. The reimbursement of business expenses will
be governed by the policies for the Company.

     (b) Accounting. Executive shall provide the Company with an accounting of
his expenses, which accounting shall clearly reflect which expenses were
incurred for proper business purposes in accordance with the policies adopted by
the Company and/or its Affiliates, and as such are reimbursable by the Company.
Executive shall provide the Company with such other supporting documentation and
other substantiation of reimbursable expenses as will conform to

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Internal Revenue Service or other requirements. All such reimbursements shall be
payable by the Company to Executive within a reasonable time after receipt by
the Company of appropriate documentation therefore.

     3.4 Other Benefits. The Company shall provide Executive with such
retirement benefits and group health and other insurance coverage at such levels
and on such terms as the Company generally provides to its executive level
employees in accordance with its Company- sponsored benefit plans.

     3.5 Compensation Upon Termination. If Executive's employment hereunder is
terminated in accordance with the provisions of Article II, the Company will be
obligated to provide to Executive compensation and benefits, in lieu of any
severance under any severance plan that the Company may then have in effect, and
subject to setoff for any amounts owed by Executive to the Company or any
affiliate of the Company by reason of any contract, agreement, promissory note,
advance, failure to return Company property or loan document, as follows:

     (a) Upon Termination for Death or Total Disability. If Executive's
employment hereunder is terminated by reason of his death or Total Disability,
under Sections 2.2 (c) or (d), then within 15 days of the date of termination
the Company will provide to Executive (or his estate or beneficiaries):

     (i) any Base Salary that has been accrued but not paid as of the date of
termination (the "Accrued Base Salary");

     (ii) any compensation for unused vacation days accrued as of the
termination date in an amount equal to his Base Salary multiplied by a fraction,
the numerator of which is the number of accrued unused vacation days and the
denominator of which is 360 (the "Accrued Vacation Payment");

     (iii) reimbursement for expenses incurred by him prior to the date of
termination that are subject to reimbursement pursuant to this Agreement (the
"Accrued Reimbursable Expenses");

     (iv) any accrued and vested benefits required to be provided upon death or
Total Disability by the terms of any Company-sponsored benefit plans or programs
(the "Accrued Benefits"), together with any benefits required to be paid or
provided in the event of Executive's death or Total Disability under applicable
law; and

     (v) either the prorated portion of his Annual Incentive Bonus that he
received for the fiscal year prior to termination or if the termination occurs
in the first year of the Initial Term, then the prorated portion of the Annual
Incentive Bonus as if the target bonus was received for that year (the "Accrued
Bonus").

     In addition, if Executive's employment is terminated under this Section
3.5(a), any Initial Restricted Shares and Long Term Grant Restricted Shares
issued to Executive under this Agreement shall immediately vest and shall no
longer be subject to forfeiture by Executive.

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     (b) Upon Termination by Company for Cause or Voluntarily by Executive. If
Executive's employment is terminated by the Company for Cause or if Executive
voluntarily terminates his employment with the Company under Sections 2.2 (a) or
(e), within 15 days of the date of such termination, the Company will:

     (i) pay Executive the Accrued Base Salary;

     (ii) pay Executive the Accrued Vacation Payment;

     (iii) pay Executive the Accrued Reimbursable Expenses; and

     (iv) pay Executive the Accrued Benefits, together with any benefits
required to be paid or provided under applicable law.

     In addition, if Executive's employment is terminated under this Section
3.5(b), any Initial Restricted Shares and Long Term Grant Restricted Shares
issued to Executive which have not yet vested shall immediately be forfeited by
Executive.

     (c) Upon Termination by the Company Without Cause or by Executive for Good
Reason. If Executive's employment is terminated by the Company without Cause or
by Executive for Good Reason under Sections 2.2 (b) or (f), the Company will:

     (i) pay Executive the Accrued Base Salary;

     (ii) pay Executive the Accrued Vacation Payment;

     (iii) pay Executive the Accrued Reimbursable Expenses;

     (iv) pay Executive the Accrued Benefits, together with any benefits
required to be paid or provided under applicable law;

     (v) pay Executive the Accrued Bonus; and

     (vi) pay Executive an amount equal to 1.5 times the sum of: (A) Executive's
then current Base Salary; plus (B) an amount equal to the Annual Incentive Bonus
which was paid to Executive for the fiscal year immediately preceding the year
of termination (or if the termination occurs in the first year of the Initial
Term, then the Annual Incentive Bonus as if the target bonus was received for
that year); plus (C) the Annual Long-Term Share Award which was granted to
Executive for the fiscal year immediately preceding the year of termination (or
if the termination occurs in the first year of the Initial Term, then the Annual
Long-Term Share Award as if the target share award was received for that year);
provided, however, that the payment to Executive pursuant to this Section 3.5
(c)(vi) shall in no event exceed an amount which would cause Executive to
receive an "excess parachute payment" as defined in the Internal Revenue Code of
1986, as amended (the "Code").

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     In addition, if Executive's employment is terminated under this Section
3.5(c), any Initial Restricted Shares and Long Term Grant Restricted Shares
issued to Executive under this Agreement shall immediately vest and shall no
longer be subject to forfeiture by Executive.

     (d) Upon Termination by Company or Executive Upon a Change of Control. If
Executive's employment is terminated by Company or Executive for Good Reason
within three years of a Change of Control under Section 2.2 (g), the Company
will:

     (i) pay Executive the Accrued Base Salary;

     (ii) pay Executive the Accrued Vacation Payment;

     (iii) pay Executive the Accrued Reimbursable Expenses;

     (iv) pay Executive the Accrued Benefits;

     (v) pay Executive the Accrued Bonus; and

     (vi) pay Executive an amount equal to 2.99 times the sum of: (A)
Executive's then current Base Salary; plus (B) an amount equal to the Annual
Incentive Bonus which was paid to Executive for the fiscal year immediately
preceding the year of termination (or if the termination occurs in the first
year of the Initial Term, then the Annual Incentive Bonus as if the target bonus
was received for that year); plus (C) the Annual Long-Term Share Award which was
granted to Executive for the fiscal year immediately preceding the year of
termination (or if the termination occurs in the first year of the Initial Term,
then the Annual Long-Term Share Award as if the target share award was received
for that year); provided, however, that the payment to Executive pursuant to
this Section 3.5 (d)(vi) shall in no event exceed an amount which would cause
Executive to receive an "excess parachute payment" as defined in the Code.

     In addition, if Executive's employment is terminated under this Section
3.5(d), any Initial Restricted Shares and Long Term Grant Restricted Shares
issued to Executive under this Agreement shall immediately vest and shall no
longer be subject to forfeiture by Executive. Also, Executive's welfare
benefits, including health, dental and life, will be extended at Company's cost
for a period of two years or until Executive is reemployed.

     3.6 Cessation of Rights and Obligations: Survival of Certain Provisions. On
the date of expiration or earlier termination of the Employment Term for any
reason, all of the respective rights, duties, obligations and covenants of the
parties, as set forth herein, shall, except as specifically provided herein to
the contrary, cease and become of no further force or effect as of the date of
said termination, and shall only survive as expressly provided for herein.

     3.7 Employment Agreement; Release of Claims. On the Effective Date, this
Agreement shall supersede the Prior Agreement which shall be void and of no
further effect. In consideration of the promises contained herein, and as a
natural inducement to the Company to enter into this Agreement, Executive hereby
releases and forever discharges the Company and its officers,

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directors, employees, investors, shareholders, affiliates and agents from, and
agrees not to sue any of these parties concerning any and all actions,
liabilities, and other claims for relief and remuneration whatsoever, arising
out of, or in any way connected with Executive's employment by the Company under
the Prior Agreement, including all matters in equity, contract, tort or pursuant
to statute, whether presently known or unknown, suspected or unsuspected that
Executive may possess, provided nothing herein shall be deemed to waive or
release any claim: (a) for indemnification that Executive may have under the
Company's Second Amended and Restated Articles of Amendment or by-laws; or (b)
to enforce this Agreement.

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                                   ARTICLE IV

                    CONFIDENTIALITY AND NON-COMPETE AGREEMENT

     4.1 Non-Disclosure of Confidential Information. Executive hereby
acknowledges and agrees that the duties and services to be performed by
Executive under this Agreement are special and unique and that as a result of
his employment by the Company hereunder Executive has developed over time and
will acquire, develop and use information of a special and unique nature and
value that is not generally known to the public or to the Company's industry,
including but not limited to, certain records, secrets, documentation, software
programs, price lists, ledgers and general information, employee records,
mailing lists, client lists, client profiles, prospective customer or client
lists, accounts receivable and payable ledgers, financial and other records of
the Company or its Affiliates, information regarding its clients or principles,
and other similar matters (all such information being hereinafter referred to as
"CONFIDENTIAL INFORMATION"). Executive further acknowledges and agrees that the
Confidential Information is of great value to the Company and that the
restrictions and agreements contained in this Agreement are reasonably necessary
to protect the Confidential Information and the goodwill of the Company and the
Affiliates. Accordingly, Executive hereby agrees that:

     (a) Executive will not, during the Employment Term or at any time
thereafter, directly or indirectly, except in connection with Executive's
performance of his duties under this Agreement, or as otherwise authorized in
writing by the Company for the benefit of the Company or any Affiliate, divulge
to any person, firm, corporation, limited liability company or organization,
other than the Company or any affiliated entity (hereinafter referred to as
"THIRD PARTIES"), or use or cause or authorize any Third Parties to use, the
Confidential Information, except as required by law; and

     (b) Upon the termination of the Employment Term for any reason whatsoever,
Executive shall deliver or cause to be delivered to the Company any and all
Confidential Information, including drawings, notebooks, keys, data and other
documents and materials belonging to the Company or its Affiliates which is in
his possession or under his control relating to the Company or its Affiliates,
regardless of the medium upon which it is stored, and will deliver to the
Company upon such termination of employment any other property of the Company or
its Affiliates which is in his possession or under his control.

     4.2 Non-Solicitation and Covenant Not to Compete.

     (a) General. Executive acknowledges that the covenants set forth in this
Section 4.2 are reasonable in scope and essential to the preservation of the
business and the goodwill of the Company, and are consideration for the amounts
to be paid to Executive hereunder. Executive also acknowledges that the
enforcement of the covenant set forth in this Section 4.2 will not preclude
Executive from being gainfully employed in such manner and to the extent as to
provide a standard of living for himself, the members of his family and the
others dependent upon him of at least the level to which he and they have become
accustomed and may expect. In addition,

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Executive acknowledges that the Company and its Affiliates have obtained an
advantage over their competitors that is characterized by relationships with
clients, principals and other contacts.

     (b) Covenant. Executive hereby covenants and agrees that, during the term
of his employment hereunder and during a period of six months following the
voluntary termination of his employment hereunder (which shall not be deemed to
include a termination resulting from the expiration of the Initial Term or any
subsequent renewal) or the termination of Executive's employment hereunder for
Cause under Section 2.2 (a) hereunder (the "Covenant Period"), Executive shall
not, directly or indirectly: (i) alone, together or in association with others,
either as a principal, agent, owner, shareholder, officer, director, partner,
employee, lender, investor or in any other capacity, engage in, have any
financial interest in or be in any way connected or affiliated with, or render
advice or services to, any business engaged in the Business or any new
businesses or lines of business which the Company may enter prior to the
termination of Executive's employment under this Agreement in the greater
metropolitan area of Chicago, Illinois, and any suburb thereof, other than as an
employee of The Inland Group, Inc. ("TIGI") or an affiliate of TIGI or otherwise
on behalf of the Company as an employee thereof or such other business as may be
permitted by the Company in writing, or as set forth on Exhibit C attached
hereto and made a part hereof; (ii) directly or indirectly divert, take away,
solicit or interfere with or attempt to divert, take away, solicit or interfere
with any present or prospective customer, except on behalf of the Company as an
employee thereof; (iii) directly or indirectly solicit, induce, influence or
attempt to solicit, induce or influence any employee or agent of the Company to
leave his employment or engagement with the Company; or offer employment or
engagement to or employ or engage any such employee of the Company, or assist or
attempt to assist any such employee of the Company in seeking other employment;
or (iv) in any manner slander, libel or by other means take action which is or
intended, or could reasonably be expected, to be detrimental to the Company or
an Affiliate or their respective employees or operations. As used in this
Section 4.2, the term "Company" shall mean the Company or an Affiliate. As used
herein, "customer" and "prospective customer" shall include: (i) any tenant or
any other person or entity with whom the Company is negotiating for the leasing
of real property from the Company or an Affiliate at the time of the termination
of Executive's employment or during the six month period immediately prior to
such termination; or (ii) any owner of real property the purchase or sale of
which is being negotiated by the Company at the time of the termination of
Executive's employment or during the six month period immediately prior to such
termination. The restrictions imposed by this subparagraph 4.2(b) shall not
apply to the ownership of one percent (1%) or less of all of the outstanding
securities of any entity whose securities are listed on a national securities
exchange.

     4.3 Remedies.

     (a) Injunctive Relief. Executive expressly acknowledges and agrees that the
business of the Company is highly competitive and that a violation of any of the
provisions of Sections 4.1 or 4.2 would cause immediate and irreparable harm,
loss and damage to the Company or an Affiliate not adequately compensable by a
monetary award. Executive further acknowledges and agrees that the time periods
and territorial areas provided for herein are the minimum necessary to
adequately protect the business of the Company, the enjoyment of the
Confidential Information

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<PAGE>   14

and the goodwill of the Company. Without limiting any of the other remedies
available to the Company at law or in equity, or the Company's right or ability
to collect money damages, Executive agrees that any actual or threatened
violation of any of the provisions of Sections 4.1 or 4.2 may be immediately
restrained or enjoined by any court of competent jurisdiction, and that a
temporary restraining order or emergency, preliminary or final injunction may be
issued in any court of competent jurisdiction, upon twenty-four (24) hour notice
and without bond. Notwithstanding anything to the contrary contained in this
Agreement, the provisions of this Section shall survive the termination of the
Employment Term.

     (b) Enforcement. It is the desire of the parties that the provisions of
Sections 4.1 or 4.2 be enforced to the fullest extent permissible under the laws
and public policies in each jurisdiction in which enforcement might be sought.
Accordingly, if any particular portion of Sections 4.1 or 4.2 shall ever be
adjudicated as invalid or unenforceable, or if the application thereof to any
party or circumstance shall be adjudicated to be prohibited by or invalidated by
such laws or public policies, such section or sections shall be: (i) deemed
amended to delete therefrom such portions so adjudicated; or (ii) modified as
determined appropriate by such a court, such deletions or modifications to apply
only with respect to the operation of such section or sections in the particular
jurisdictions so adjudicating on the parties and under the circumstances as to
which so adjudicated.

                                    ARTICLE V

                                  MISCELLANEOUS

     5.1 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received:
(a) when delivered, if delivered personally; (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid; (c) one business day after delivery to a private courier service, when
delivered to a private courier service providing documented overnight service;
and (d) on the date of delivery if delivered by telecopy, receipt confirmed,
provided that a confirmation copy is sent on the next business day by first
class mail, postage prepaid, in each case addressed as follows:

     To Executive at his home address.

     To the Company at:   Inland Real Estate Corporation
                          2901 Butterfield Road
                          Oak Brook, Illinois 60523
                          Attn: Samuel A. Orticelli, Esq.

     With a copy to:      Shefsky & Froelich Ltd.
                          444 North Michigan Avenue
                          Suite 2500
                          Chicago, Illinois 60611
                          Attn: Michael J. Choate
                          Telephone: (312) 836-4066
                          Facsimile: (312) 527-5921

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<PAGE>   15

Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.

     5.2 Entire Agreement; Amendments, Etc. This Agreement contains the entire
agreement and understanding of the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter thereof. No
modification, amendment, waiver or alteration of this Agreement or any provision
or term hereof shall in any event be effective unless the same shall be in
writing, executed by both parties hereto, and any waiver so given shall be
effective only in the specific instance and for the specific purpose for which
given.

     5.3 Benefit. This Agreement shall be binding upon, and inure to the benefit
of, and shall be enforceable by, the heirs, successors and legal representatives
of Executive and the successors, assignees and transferees of the Company and
its current or future Affiliates. This Agreement or any right or interest
hereunder may not be assigned by Executive.

     5.4 No Waiver. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or pursuant thereto.

     5.5 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. If any part of any covenant or
other provision in this Agreement is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that the court shall substitute a judicially enforceable
limitation in its place, and that as so modified the covenant shall be binding
upon the parties as if originally set forth herein.

     5.6 Compliance and Headings. The headings in this Agreement are intended to
be for convenience and reference only, and shall not define or limit the scope,
extent or intent or otherwise affect the meaning of any portion hereof.

     5.7 Governing Law. The parties agree that this Agreement shall be governed
by, interpreted and construed in accordance with the laws of the State of
Illinois, and the parties agree that any suit, action or proceeding with respect
to this Agreement shall be brought in the state courts in Chicago, Illinois or
in the U.S. District Court for the Northern District of Illinois. The parties
hereto hereby accept the exclusive jurisdiction of those courts for the purpose
of any such

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<PAGE>   16

suit, action or proceeding. Venue for any such action, in addition to any other
venue permitted by statute, will be in Chicago, Illinois.

     5.8  Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.

     5.9  No Presumption Against Drafter. Each of the parties hereto has jointly
participated in the negotiation and drafting of this Agreement. In the event an
ambiguity or a question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any provisions of this Agreement.

     5.10 Enforcement. In the event either of the parties to this Agreement
shall bring an action against the other party with respect to the enforcement or
breach of any provision of this Agreement, the prevailing party in such action
shall recover from the non-prevailing party the costs incurred by the prevailing
party with respect to such action including court costs and reasonable
attorneys' fees.

     5.11 Recitals. The Recitals set forth above are hereby incorporated in and
made a part of this Agreement by this reference.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered as of the day and year first above written.

                                           INLAND REAL ESTATE CORPORATION,
                                           a Maryland corporation

     By: /s/ SAMUEL A. ORTICELLI          By:  /s/ MARK ZALATORIS
       ----------------------------------     ----------------------------------
     Name: Samuel A. Orticelli             Name: Mark Zalatoris
     Its:  Senior Vice President           Its:  Senior Vice President

                                           EXECUTIVE

                                           /s/ NORBERT J. TREONIS
                                           -------------------------------------
                                           NORBERT J. TREONIS

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<PAGE>   17

                                    EXHIBIT A
                         (formula for determining Annual
                                Incentive Bonus)

I.   The Executive's Annual Incentive Bonus Opportunity ("AIBO") shall be
     determined based on performance of the Company, measured to either a
     Threshold, Target, or High level of performance.

          -    The Company will have achieved a Threshold level of performance
               if the Company's growth in FFO per share during the year for
               which the bonus is calculated is not less than 70% of the median
               FFO growth rate for the applicable year as published by NAREIT
               for the Retail Property Sector.

          -    The Company will have achieved a Target level of performance if
               the Company's growth in FFO per share during the year for which
               the bonus is calculated is not less than 100% of the median FFO
               growth rate for the applicable year as published by NAREIT for
               the Retail Property Sector.

          -    The Company will have achieved a High level of performance if the
               Company's growth in FFO per share during the year for which the
               bonus is calculated is not less than 130% of the median FFO
               growth rate for the applicable year as published by NAREIT for
               the Retail Property Sector.

     If the Company achieves a Threshold level of performance, the Executive's
     AIBO will be equal to 20% of Executive's Base Salary for the applicable
     year. If the Company achieves a Target level of performance, the
     Executive's AIBO will be equal to 50% of Executive's Base Salary for the
     applicable year. If the Company achieves a High level of performance, the
     Executive's AIBO will be equal to 60% of Executive's Base Salary for the
     applicable year.

II.  The Executive's Annual Incentive Bonus for the applicable year shall be
     determined by adding two components:

          A.   The first component shall be equal to 90% of the Executive's
               AIBO.

          B.   The second component shall be determined by the Company's CEO
               based on a subjective assessment of the Executive's performance,
               and may be up to but not in excess of 10% of the Executive's
               AIBO.

                                       17
<PAGE>   18

                                    EXHIBIT B
                    (formula for determining Annual Award of
                       Long Term Grant Restricted Shares)

I.   The Executive's Annual Award of Long Term Grant Restricted Shares shall be
     determined based on performance of the Company, measured to either a
     Threshold, Target, or High level of performance.

          -    The Company will have achieved a Threshold level of performance
               if the Company's growth in FFO per share during the year for
               which the grant of Long Term Grant Restricted Shares is
               calculated is not less than 70% of the median FFO growth rate for
               the applicable year as published by NAREIT for the Retail
               Property Sector.

          -    The Company will have achieved a Target level of performance if
               the Company's growth in FFO per share during the year for which
               the grant of Long Term Grant Restricted Shares is calculated is
               not less than 100% of the median FFO growth rate for the
               applicable year as published by NAREIT for the Retail Property
               Sector.

          -    The Company will have achieved a High level of performance if the
               Company's growth in FFO per share during the year for which the
               grant of Long Term Grant Restricted Shares is calculated is not
               less than 130% of the median FFO growth rate for the applicable
               year as published by NAREIT for the Retail Property Sector.

     If the Company achieves a Threshold level of performance, the Executive's
     award of Long Term Grant Restricted Shares will be 9090.91 shares. If the
     Company achieves a Target level of performance, the Executive's award of
     Long Term Grant Restricted Shares will be 18,181.82 shares. If the Company
     achieves a High level of performance, the Executive's award of Long Term
     Grant Restricted Shares will be 36,363.64 shares.

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<PAGE>   19

                         EXHIBIT C - FOR NORBERT TREONIS

CORPORATION                                                              OFFICE
-----------                                                              ------

The Inland Property Management Group, Inc.                             Chairman

Inland Property Management, Inc.                                       Chairman

Inland Commercial Property Management, Inc.                            Chairman

Community Property Management, Inc.                                    Chairman

The Inland Construction Group, Inc.                                    Chairman

Metropolitan Construction Services, Inc.                               Chairman

The Inland Group, Inc.                                   Director & Shareholder

The Inland Real Estate Group, Inc.                           Sr. Vice President

Inland Real Estate Advisory Services, Inc.                             Director

Inland Retail Real Estate Advisory Services, Inc.                      Director

American Opportunity Investments, Inc.                   Director & Shareholder

High Grove Area Maintenance, Inc.                                      Director

Eastbrook Plaza, Inc.                                                  Director

Tower Bancorp Holding Company                            Director & Shareholder

Hillside C-M Corporation                                               Director

Mid-America Management Corp.                             Chairman & Shareholder

Metropolitan Construction Services, LLC                            Owner/Member

Inland Real Estate Acquisitions, Inc.                      Exec. Vice President

Inland Southeast Property Management Corp.                          Shareholder

                    (Account positions intentionally omitted)

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