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8-K</font></div>
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REPORT</font></div>
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to Section 13 OR 15 (d) of</font></div>
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Securities Exchange Act of 1934</font></div>
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of Report (Date of earliest event reported):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">January
23, 2009</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">KILROY
REALTY CORPORATION</font></div>
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name of registrant as specified in its charter)</font></div>
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      </font></td>
            <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
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      File Number)</font></div>
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      Employer</font></div>
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      No.)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
12200 W. Olympic Boulevard, Suite 200, Los Angeles,
California&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;90064</font></div>
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of principal executive
offices)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(Zip
Code)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
telephone number, including area code:&#160;&#160;(310) 481-8400</font></div>
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name or former address, if changed since last report.)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2.):</font></div>
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      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
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    <div>
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            <td align="left" valign="top" width="3%">
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      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: wingdings">&#168;</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font></div>
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    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: wingdings">&#168;</font></div>
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      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ITEM
5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007
Long-Term Targeted Performance Incentive Program</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
previously disclosed on Form 8-K filed with the Securities and Exchange
Commission on February 8, 2007 (the &#8220;Initial 8-K&#8221;), the Executive Compensation
Committee (the &#8220;Committee&#8221;) of the Board of Directors of Kilroy Realty
Corporation (the &#8220;Company&#8221;) approved the 2007 long-term targeted performance
incentive program, which was comprised of the total annual shareholder return
program and the development performance program (the &#8220;DPP&#8221;), for the Chief
Executive Officer, Chief Operating Officer, and Chief Financial Officer
(collectively, the &#8220;Executive Officers&#8221;) that allows for the Executive Officers
to receive bonus compensation in the event certain specified corporate
performance measures are achieved.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
January 23, 2009, the Committee approved and authorized the following payments
under the development completion component of the DPP based on the Company&#8217;s
achievement of the target performance criteria for the development completion
component of the DPP (as more fully described in the Initial
8-K):&#160;&#160;(i) $750,000 to the Chief Executive Officer; (ii) $375,000 to
the Chief Operating Officer; and (iii) $250,000 to the Chief Financial
Officer.&#160;&#160;The awards&#160;were paid in unrestricted shares of the
Company&#8217;s common stock on January 23, 2009.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">2008 Annual Bonus Program and 2008
Annual Long-Term Incentive Program</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
previously disclosed on Form 8-K filed with the Securities and Exchange
Commission on January 31, 2008 (the &#8220;Form 8-K&#8221;), the Committee approved the 2008
annual bonus program (the &#8220;Bonus Program&#8221;) and the 2008 annual long-term
incentive program (the &#8220;LTI Program&#8221; and, together with the Bonus Program, the
&#8220;2008 Programs&#8221;) that allow for the Executive Officers to receive bonus
compensation in the event certain specified corporate performance measures are
achieved.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
January 23, 2009, the Committee approved and authorized the following cash
payments under the Bonus Program to the Executive Officers based on the
Company&#8217;s achievement of the high payout level for the Bonus Program (as more
fully described in the Form 8-K):&#160;&#160;(i) $4,725,000 to the Chief
Executive Officer; (ii) $1,437,500 to the Chief Operating Officer; and (iii)
$1,181,250 to the Chief Financial Officer.&#160;&#160;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
January 23, 2009, the Committee approved and authorized the following payments
under the LTI Program to the Executive Officers based on the Company&#8217;s
achievement of the high payout level for the LTI Program (as more fully
described in the Form 8-K):&#160;&#160;(i) $8,000,000 to the Chief Executive
Officer; (ii) $3,700,000 to the Chief Operating Officer; and (iii) $2,500,000 to
the Chief Financial Officer.&#160;&#160;The awards&#160;were paid in restricted
stock units on January 23, 2009 and will vest in equal annual installments over
a two-year service period as follows:&#160;&#160;50% on December 31, 2009 and
50% on December 31, 2010 based on continued employment through the applicable
vesting date.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
January 23, 2009, the Committee approved and authorized the following 2008 cash
bonus payments to the Company&#8217;s other named executive officers (the
&#8220;NEOs&#8221;):&#160;&#160;(i) $150,000 to the Senior Vice President, San Diego and
(ii) $317,500 to the Senior Vice President, Treasurer.&#160;&#160;The Committee
also approved and authorized the following 2008 annual long-term incentive
payments to the NEOs:&#160;&#160;(i) $150,000 to the Senior Vice President, San
Diego and (ii) $317,500 to the Senior Vice President, Treasurer.&#160;&#160;The
awards were paid in restricted stock units on January 23, 2009 and will vest in
equal annual installments over a three-year service period as
follows:&#160;&#160;33 1/3% on December 31, 2009, 33 1/3% on December 31, 2010,
and 33 1/3% on December 31, 2011 based on continued employment through the
applicable vesting date.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2009
Executive Compensation Program</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
January 26, 2009, the Committee approved the 2009 annual bonus program for the
Executive Officers that will allow for the Executive Officers to receive bonus
compensation in the event certain specified corporate performance measures are
achieved.&#160;&#160;The approved maximum possible payout for the Executive
Officers under the 2009 annual bonus program is on average a 59% reduction from
the approved maximum possible payout for the Executive Officers under the 2008
Programs.&#160;&#160;The purpose of the 2009 annual bonus program is to provide
incentive to the Executive Officers to attain established performance measures
and to increase stockholder value in a &#8220;pay for performance&#8221; structure that is
aligned with the interests of the Company&#8217;s stockholders.&#160;&#160;For the
Executive Officers, the treatment of their awards under this program upon a
change in control or termination of employment (including due to death or
disability) will be governed by the applicable terms contained within each
Executive Officer&#8217;s employment agreement.&#160;&#160;The Committee also
determined that the 2009 base salaries for the Company&#8217;s Executive Officers were
to remain unchanged from the 2008 base salaries.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">2009
Annual Bonus Program</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
specific performance measures for the 2009 annual bonus program are based upon:
2009 EBITDA targets, 2009 revenue targets, 2009 operating margin targets, and
2009 operating portfolio leasing targets (each as defined in the 2009 annual
bonus program, a &#8220;Performance Criterion&#8221; and, collectively, the &#8220;Performance
Criteria&#8221;).&#160;&#160;The actual total award payout under this program relative
to these performance measures will be determined as follows:&#160;&#160;40% for
achievement of 2009 EBITDA targets, 20% for achievement of 2009 revenue targets,
20% for achievement of 2009 operating margin targets, and 20% for achievement of
2009 operating portfolio leasing targets.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">Under the 2009 annual bonus program,
the Executive Officers are eligible to earn different amounts of incentive
compensation depending on the level of performance achieved for each of the
Performance Criteria.&#160;&#160;The Executive Officers must exceed a minimum
threshold performance level for each Performance Criterion to earn incentive
compensation with respect to that individual Performance Criterion under this
program.&#160;&#160;Once the Executive Officers exceed the applicable minimum
thresholds, they are eligible to earn additional incentive compensation upon
achieving certain target levels of performance.&#160;&#160;In the event the
Executive Officers exceed the applicable thresholds but do not achieve the
applicable target performance levels, they are entitled to proportional
awards.&#160;&#160;When calculating the total payout under this program, the
payout under each Performance Criterion is calculated
independently.&#160;&#160;In the event the Executive Officers exceed the target
performance level for any individual Performance Criterion, it can be used to
supplement the payout for other measures where performance under those measures
falls below target levels, subject to the maximum total payouts discussed
below.&#160;&#160;</font>&#160;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under the
2009 annual bonus program, the Chief Executive Officer is eligible to earn
$2,698,500 in the event threshold performance levels are achieved for all of the
Performance Criteria and $5,000,000 in the event target performance levels are
achieved for all of the Performance Criteria.&#160;&#160;The Chief Operating
Officer is eligible to earn $1,408,750 in the event threshold performance levels
are achieved for all of the Performance Criteria and $2,250,000 in the event
target performance levels are achieved for all of the Performance
Criteria.&#160;&#160;The Chief Financial Officer is eligible to earn $913,500 in
the event threshold performance levels are achieved for all of the Performance
Criteria and $1,600,000 in the event target performance levels are achieved for
all of the Performance Criteria.<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font>The
Committee has the discretion, but not the obligation, to make additional awards
to the Executive Officers based on its assessment of the performance of the
Company and each individual separately.&#160; Such discretionary awards can be
awarded in cash, equity, or some combination thereof at the Committee&#8217;s
election.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It is
anticipated that any amounts earned under the 2009 annual bonus program will be
paid during the first quarter of 2010 with any amounts earned up to the first
50% of the applicable target award to be paid in cash and any portion of the
remaining 50% of the applicable target award to be paid in restricted stock or
restricted stock units, as applicable.&#160;&#160;Restricted stock or restricted
stock unit awards earned under the 2009 annual bonus program will vest in equal
annual installments over a two-year service period as follows:&#160;&#160;50% on
December 31, 2010 and 50% on December 31, 2011 based on continued employment
through the applicable vesting date.</font></div><br>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURES</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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                <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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                <td valign="middle" width="26%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
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                <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
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      REALTY CORPORATION</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="47%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Date:
      January 29, 2009</font></div>
                </td>
                <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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      </font></td>
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      </font></td>
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                </td>
                <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="26%" style="BORDER-BOTTOM: black 1px solid">
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                </td>
              </tr>
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      Vice President and
Controller</font></div>
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{"company-data": {"conformed-name": "KILROY REALTY CORP", "cik": "0001025996", "assigned-sic": "6798", "irs-number": "954598246", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12675", "film-number": "09554859"}, "business-address": {"street1": "12200 W. OLYMPIC BLVD., SUITE 200", "city": "LOS ANGELES", "state": "CA", "zip": "90064", "phone": "3104818400"}, "mail-address": {"street1": "12200 W. OLYMPIC BLVD., SUITE 200", "city": "LOS ANGELES", "state": "CA", "zip": "90064"}}
doc8k012309.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15 (d) of
The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
January
23, 2009
KILROY
REALTY CORPORATION
(Exact
name of registrant as specified in its charter)
Maryland
1-12675
95-4598246
(State
      or other jurisdiction of
incorporation)
(Commission
      File Number)
(IRS
      Employer
Identification
      No.)
12200 W. Olympic Boulevard, Suite 200, Los Angeles,
California                                                                                                 90064
(Address
of principal executive
offices)                                                                                                                     (Zip
Code)
Registrant's
telephone number, including area code:  (310) 481-8400
N/A
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2.):
¨
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
¨
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
¨
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
¨
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
ITEM
5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
2007
Long-Term Targeted Performance Incentive Program
As
previously disclosed on Form 8-K filed with the Securities and Exchange
Commission on February 8, 2007 (the "Initial 8-K"), the Executive Compensation
Committee (the "Committee") of the Board of Directors of Kilroy Realty
Corporation (the "Company") approved the 2007 long-term targeted performance
incentive program, which was comprised of the total annual shareholder return
program and the development performance program (the "DPP"), for the Chief
Executive Officer, Chief Operating Officer, and Chief Financial Officer
(collectively, the "Executive Officers") that allows for the Executive Officers
to receive bonus compensation in the event certain specified corporate
performance measures are achieved.
On
January 23, 2009, the Committee approved and authorized the following payments
under the development completion component of the DPP based on the Company's
achievement of the target performance criteria for the development completion
component of the DPP (as more fully described in the Initial
8-K):  (i) $750,000 to the Chief Executive Officer; (ii) $375,000 to
the Chief Operating Officer; and (iii) $250,000 to the Chief Financial
Officer.  The awards were paid in unrestricted shares of the
Company's common stock on January 23, 2009.
2008 Annual Bonus Program and 2008
Annual Long-Term Incentive Program
As
previously disclosed on Form 8-K filed with the Securities and Exchange
Commission on January 31, 2008 (the "Form 8-K"), the Committee approved the 2008
annual bonus program (the "Bonus Program") and the 2008 annual long-term
incentive program (the "LTI Program" and, together with the Bonus Program, the
"2008 Programs") that allow for the Executive Officers to receive bonus
compensation in the event certain specified corporate performance measures are
achieved.
On
January 23, 2009, the Committee approved and authorized the following cash
payments under the Bonus Program to the Executive Officers based on the
Company's achievement of the high payout level for the Bonus Program (as more
fully described in the Form 8-K):  (i) $4,725,000 to the Chief
Executive Officer; (ii) $1,437,500 to the Chief Operating Officer; and (iii)
$1,181,250 to the Chief Financial Officer.
On
January 23, 2009, the Committee approved and authorized the following payments
under the LTI Program to the Executive Officers based on the Company's
achievement of the high payout level for the LTI Program (as more fully
described in the Form 8-K):  (i) $8,000,000 to the Chief Executive
Officer; (ii) $3,700,000 to the Chief Operating Officer; and (iii) $2,500,000 to
the Chief Financial Officer.  The awards were paid in restricted
stock units on January 23, 2009 and will vest in equal annual installments over
a two-year service period as follows:  50% on December 31, 2009 and
50% on December 31, 2010 based on continued employment through the applicable
vesting date.
On
January 23, 2009, the Committee approved and authorized the following 2008 cash
bonus payments to the Company's other named executive officers (the
"NEOs"):  (i) $150,000 to the Senior Vice President, San Diego and
(ii) $317,500 to the Senior Vice President, Treasurer.  The Committee
also approved and authorized the following 2008 annual long-term incentive
payments to the NEOs:  (i) $150,000 to the Senior Vice President, San
Diego and (ii) $317,500 to the Senior Vice President, Treasurer.  The
awards were paid in restricted stock units on January 23, 2009 and will vest in
equal annual installments over a three-year service period as
follows:  33 1/3% on December 31, 2009, 33 1/3% on December 31, 2010,
and 33 1/3% on December 31, 2011 based on continued employment through the
applicable vesting date.
2009
Executive Compensation Program
On
January 26, 2009, the Committee approved the 2009 annual bonus program for the
Executive Officers that will allow for the Executive Officers to receive bonus
compensation in the event certain specified corporate performance measures are
achieved.  The approved maximum possible payout for the Executive
Officers under the 2009 annual bonus program is on average a 59% reduction from
the approved maximum possible payout for the Executive Officers under the 2008
Programs.  The purpose of the 2009 annual bonus program is to provide
incentive to the Executive Officers to attain established performance measures
and to increase stockholder value in a "pay for performance" structure that is
aligned with the interests of the Company's stockholders.  For the
Executive Officers, the treatment of their awards under this program upon a
change in control or termination of employment (including due to death or
disability) will be governed by the applicable terms contained within each
Executive Officer's employment agreement.  The Committee also
determined that the 2009 base salaries for the Company's Executive Officers were
to remain unchanged from the 2008 base salaries.
2009
Annual Bonus Program
The
specific performance measures for the 2009 annual bonus program are based upon:
2009 EBITDA targets, 2009 revenue targets, 2009 operating margin targets, and
2009 operating portfolio leasing targets (each as defined in the 2009 annual
bonus program, a "Performance Criterion" and, collectively, the "Performance
Criteria").  The actual total award payout under this program relative
to these performance measures will be determined as follows:  40% for
achievement of 2009 EBITDA targets, 20% for achievement of 2009 revenue targets,
20% for achievement of 2009 operating margin targets, and 20% for achievement of
2009 operating portfolio leasing targets.
Under the 2009 annual bonus program,
the Executive Officers are eligible to earn different amounts of incentive
compensation depending on the level of performance achieved for each of the
Performance Criteria.  The Executive Officers must exceed a minimum
threshold performance level for each Performance Criterion to earn incentive
compensation with respect to that individual Performance Criterion under this
program.  Once the Executive Officers exceed the applicable minimum
thresholds, they are eligible to earn additional incentive compensation upon
achieving certain target levels of performance.  In the event the
Executive Officers exceed the applicable thresholds but do not achieve the
applicable target performance levels, they are entitled to proportional
awards.  When calculating the total payout under this program, the
payout under each Performance Criterion is calculated
independently.  In the event the Executive Officers exceed the target
performance level for any individual Performance Criterion, it can be used to
supplement the payout for other measures where performance under those measures
falls below target levels, subject to the maximum total payouts discussed
below.
Under the
2009 annual bonus program, the Chief Executive Officer is eligible to earn
$2,698,500 in the event threshold performance levels are achieved for all of the
Performance Criteria and $5,000,000 in the event target performance levels are
achieved for all of the Performance Criteria.  The Chief Operating
Officer is eligible to earn $1,408,750 in the event threshold performance levels
are achieved for all of the Performance Criteria and $2,250,000 in the event
target performance levels are achieved for all of the Performance
Criteria.  The Chief Financial Officer is eligible to earn $913,500 in
the event threshold performance levels are achieved for all of the Performance
Criteria and $1,600,000 in the event target performance levels are achieved for
all of the Performance Criteria.
The
Committee has the discretion, but not the obligation, to make additional awards
to the Executive Officers based on its assessment of the performance of the
Company and each individual separately.  Such discretionary awards can be
awarded in cash, equity, or some combination thereof at the Committee's
election.
It is
anticipated that any amounts earned under the 2009 annual bonus program will be
paid during the first quarter of 2010 with any amounts earned up to the first
50% of the applicable target award to be paid in cash and any portion of the
remaining 50% of the applicable target award to be paid in restricted stock or
restricted stock units, as applicable.  Restricted stock or restricted
stock unit awards earned under the 2009 annual bonus program will vest in equal
annual installments over a two-year service period as follows:  50% on
December 31, 2010 and 50% on December 31, 2011 based on continued employment
through the applicable vesting date.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
KILROY
      REALTY CORPORATION
Date:
      January 29, 2009
By:
/s/ Heidi R. Roth
Heidi
      R. Roth
Senior
      Vice President and
Controller