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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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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Date
of Report (Date of earliest event reported):</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">January
28, 2010</font></div>
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      <hr style="COLOR: black" align="center" noshade size="1" width="17%">&#160;</div>
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REALTY CORPORATION</font></div>
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name of registrant as specified in its charter)</font></div>
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W. Olympic Boulevard, Suite 200, Los Angeles, California 90064</font></div>
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of principal executive offices) Zip Code)</font></div>
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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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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
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      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">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="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2010
Executive Compensation Program</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
January 28, 2010, the Executive Compensation Committee (the &#8220;Committee&#8221;) of the
Board of Directors of Kilroy Realty Corporation (the &#8220;Company&#8221;) approved the
2010 annual bonus program for the Chief Executive Officer, Chief Operating
Officer, and Chief Financial Officer (the &#8220;Executive Officers&#8221;) that will allow
for the Executive Officers to receive bonus compensation in the event certain
specified corporate performance measures are achieved.&#160;&#160;The purpose of
the 2010 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 approved the following 2010 base
salaries for the Company&#8217;s Executive Officers:&#160;&#160;$1,050,000 for the
Chief Executive Officer, $575,000 for the Chief Operating Officer, and $500,000
for the Chief Financial Officer.</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2010
Annual Bonus Program</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
specific performance measures for the 2010 annual bonus program are based upon:
2010 EBITDA targets, 2010 revenue targets, 2010 operating margin targets, and
2010 leasing targets (each as defined in the 2010 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 2010 EBITDA targets, 20% for achievement of 2010 revenue targets,
20% for achievement of 2010 operating margin targets, and 20% for achievement of
2010 leasing targets.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under the
2010 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 as follows and subject to the maximum total payouts
discussed below:&#160;&#160;up to 50% of the target payout for the 2010 EBITDA
target (up to a maximum of 60%) and up to 75% of the target payout for the 2010
revenue target, 2010 operating margin target, and 2010 leasing target (up to a
maximum of 35% each).&#160;&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under the
2010 annual bonus program, the Chief Executive Officer is eligible to earn
$2,500,000 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 $1,125,000 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 $500,000 in
the event threshold performance levels are achieved for all of the Performance
Criteria and $1,000,000 in the event target performance levels are achieved for
all of the Performance Criteria.&#160;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="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">It is
anticipated that any amounts earned under the 2010 annual bonus program will be
paid during the first quarter of 2011 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 2010 annual bonus program will vest in equal
annual installments over a two-year service period as follows:&#160;&#160;50% on
January 5, 2012 and 50% on January 5, 2013 based on continued employment through
the applicable vesting date.</font></div>
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duly authorized.</font></div>
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      REALTY CORPORATION</font></div>
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      February 3, 2010</font></div>
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      Heidi R. Roth</font></div>
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      </font></td>
            <td valign="bottom" width="23%">
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      R. Roth</font></div>
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      </font></td>
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      Vice President and Controller</font></div>
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d8k.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
28, 2010
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.
2010
Executive Compensation Program
On
January 28, 2010, the Executive Compensation Committee (the "Committee") of the
Board of Directors of Kilroy Realty Corporation (the "Company") approved the
2010 annual bonus program for the Chief Executive Officer, Chief Operating
Officer, and Chief Financial Officer (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 purpose of
the 2010 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 approved the following 2010 base
salaries for the Company's Executive Officers:  $1,050,000 for the
Chief Executive Officer, $575,000 for the Chief Operating Officer, and $500,000
for the Chief Financial Officer.
2010
Annual Bonus Program
The
specific performance measures for the 2010 annual bonus program are based upon:
2010 EBITDA targets, 2010 revenue targets, 2010 operating margin targets, and
2010 leasing targets (each as defined in the 2010 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 2010 EBITDA targets, 20% for achievement of 2010 revenue targets,
20% for achievement of 2010 operating margin targets, and 20% for achievement of
2010 leasing targets.
Under the
2010 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 as follows and subject to the maximum total payouts
discussed below:  up to 50% of the target payout for the 2010 EBITDA
target (up to a maximum of 60%) and up to 75% of the target payout for the 2010
revenue target, 2010 operating margin target, and 2010 leasing target (up to a
maximum of 35% each).
Under the
2010 annual bonus program, the Chief Executive Officer is eligible to earn
$2,500,000 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 $1,125,000 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 $500,000 in
the event threshold performance levels are achieved for all of the Performance
Criteria and $1,000,000 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 2010 annual bonus program will be
paid during the first quarter of 2011 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 2010 annual bonus program will vest in equal
annual installments over a two-year service period as follows:  50% on
January 5, 2012 and 50% on January 5, 2013 based on continued employment through
the applicable vesting date.
2
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:
      February 3, 2010
By:
/s/
      Heidi R. Roth
Heidi
      R. Roth
Senior
      Vice President and Controller
3