Exhibit
10.220


 


EIGHTEENTH
AMENDMENT TO EMPLOYMENT AGREEMENT


 


This Eighteenth Amendment to Employment Agreement is
made and entered into as of January 1, 2009 by and between Kennedy Wilson Inc.,
a Delaware corporation (“Company”), and Freeman A. Lyle, Jr. (“Employee”).


 


RECITALS


 


WHEREAS, Company and Employee have entered into
that certain Employment Agreement dated as of April 1, 1996, and amended April
1, 1997, April 1, 1998, August 15, 1998, April 1, 1999, April 1, 2000, January
1, 2001, March 28, 2001, September 1, 2002, October 1, 2003, January 1, 2004,
January 1, 2005, January 1, 2006, January 1, 2007, March 1, 2007, January 1,
2008, June 1, 2008 and January 1, 2009 (the “Agreement”), providing for the
employment of Employee by Company pursuant to the terms of the Agreement; and


 


WHEREAS, Company and Employee have agreed that
the terms of the Agreement should be modified for compliance with the
applicable requirements of Section 409A of the Internal Revenue Code of 1986,
as amended.


 


AMENDMENT
TO AGREEMENT


 


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby amend the Agreement, as follows:


 


1.               Section 4(ii) of the Agreement is hereby
amended by the addition of the following sentence to the end thereof:


 


“Any such bonus determined to be payable to Employee
for any period during the term of this Agreement shall be paid in a cash lump
sum payment by no later than the fifteenth day of the third calendar month next
following the later of the end of the calendar year, or the end of Company’s
fiscal year, in either case in which such bonus is determined and declared by
the Company.”


 


2.               Section 11(d) of the Agreement is hereby
amended by deleting the last sentence thereof and replacing it with the
following:


 


“In all other cases, Employee, or his estate, will
receive all salary, bonuses and fringe benefits (other than continued
participation under the Company’s Section 401(k) plan) as Employee may be
entitled to under the Agreement (or if such benefits cannot be provided
pursuant to the terms of the applicable plans, comparable benefits) due
hereunder and remaining to be paid during the 


 

















 


Term in the ordinary course, provided that the payment
of fringe or comparable benefits shall be subject to the availability of such
benefits following Employee’s termination of employment at no additional cost
above what was previously paid by the Company). 
The salary payments to be continued pursuant to the immediately
preceding sentence shall be paid to Employee by the Company for the remainder
of the Term of the Agreement on the Company’s ordinary payroll dates then
applicable to similarly situated employees of the Company.”


 


3.               Section 12 of the Agreement is hereby
amended by the addition of a new Section 12(j) to read as follows:


 


“(j) Code Section 409A.


 


(i)            The Company intends that the
reimbursements, payments and benefits to which Employee could become entitled
under this Agreement be exempt from or comply with Section 409A of the Code and
the regulations and other guidance promulgated thereunder (“Section
409A”).  The provisions of this section
shall qualify and supersede all other provisions of this Agreement as necessary
to fulfill the foregoing intention.  If
Company believes, at any time, that any of such reimbursement, payment or
benefit is not exempt or does not so comply, Company will promptly advise
Employee and will reasonably and in good faith amend the terms of such
arrangement such that it is exempt or complies (with the most limited possible
economic effect on Employee and on Company) or to minimize any additional tax,
interest and/or penalties that may apply under Section 409A if exemption or
compliance is not practicable.  Company
agrees that it will not, without Employee’s prior written consent, knowingly
take any action, or knowingly refrain from taking any action, other than as
required by law, that would result in the imposition of tax, interest and/or
penalties upon Employee under Section 409A, unless such action or omission is
pursuant to Employee’s written request.


 


(ii)           To the extent applicable, each and
every payment to be made pursuant to this Agreement shall be treated as a
separate payment and not as one of a series of payments treated as a single
payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).


 


(iii)          If Employee is a “specified employee”
(determined by Company in accordance with Section 409A and Treasury Regulation
Section 1.409A-3(i)(2)) as of the date that Employee experiences a separation from
service, as defined in Treasury Regulations Section 1.409A-1(h)(1), from the
Company (a “Separation from Service”) and if any reimbursement, payment or
benefit to be paid or provided under this Agreement or otherwise both (A)
constitutes a “deferral of compensation” within the meaning of and subject to
Section 409A (“Nonqualified Deferred Compensation”) and (B) cannot be paid or
provided in a manner otherwise provided herein without subjecting


 


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Employee to additional tax, interest and/or penalties
under Section 409A, then any such reimbursement, payment or benefit that is
payable during the first six months following Employee’s date of termination
shall be paid or provided to Employee in a lump sum cash payment to be made,
with interest at the applicable federal rate, on the earlier of (X) Employee’s
death and (Y) the first business day of the seventh (7th) month immediately
following Employee’s Separation from Service. 
To the extent available, all the exceptions of Treasury Regulations
Section 1.409A-1(b)(9) shall apply in implementing the rules of this section.


 


(iv)          Except to the extent any
reimbursement, payment or benefit to be paid or provided under this Agreement
does not constitute Nonqualified Deferred Compensation, (A) the amount of
expenses eligible for reimbursement or the provision of any in-kind benefit (as
defined in Section 409A) to Employee during any calendar year will not affect
the amount of expenses eligible for reimbursement or provided as in-kind
benefits to Employee in any other calendar year (subject to any lifetime and
other annual limits provided under Company’s health plans), (B) the
reimbursements for expenses for which Employee is entitled shall be made on or
before the last day of the calendar year following the calendar year in which
the applicable expense is incurred and (C) the right to payment or
reimbursement or in-kind benefits may not be liquidated or exchanged for any
other benefit.


 


(v)           Any reimbursement, payment or benefit
to be paid or provided under this Agreement due to a Separation from Service
that is exempt from Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(v) will be paid or provided to Employee only to the extent the
expenses are not incurred or the benefits are not provided beyond the last day
of the Employee’s second taxable year following the Employee’s taxable year in
which the Separation from Service occurs; provided, however, that Company shall
reimburse such expenses no later than the last day of the third taxable year
following the Employee’s taxable year in which the Employee’s Separation from
Service occurs.


 


(vi)          Any reimbursement, payment or benefit
to be paid or provided under this Agreement that constitutes Nonqualified Deferred
Compensation due upon a termination of employment shall be paid or provided to
Employee only in the event of a Separation from Service.


 


Subject to the foregoing, the Agreement remains in
full force and effect, and Company and Employee hereby ratify and affirm the
Agreement in each and every respect.


 


IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of the date first above written.


 


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  “COMPANY”

  	
   

  	
  “EMPLOYEE”

  
	
  Kennedy Wilson Inc.,

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William J. McMorrow

  	
   

  	
  /s/ Freeman A. Lyle, Jr.

  
	
  Name:

  	
  William J. McMorrow

  	
   

  	
  Freeman A. Lyle, Jr.

  
	
  Title:

  	
  Chairman/Chief Executive Officer

  	
   

  	
   

  



 


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