Document:

Exhibit 10.40

 

NINTH
AMENDMENT TO

 

EMPLOYMENT
AGREEMENT

 

This Ninth Amendment to Employment Agreement (the “Ninth Amendment”) is
made and entered into as of October 1, 2000, by and between
KENNEDY-WILSON, INC., a Delaware corporation, with its principal office located
in Beverly Hills, California (the “Company”), and WILLIAM J. McMORROW, an
individual (“Employee”).

 

RECITALS

 

WHEREAS, Company and Employee have entered into that
certain Employment Agreement dated as of August 14, 1992, as amended January 1,
1993, January 1, 1994, March 31, 1995,
January 1, 1996, May 19, 1997, August 20, 1998, August 9,
1999, and January 3, 2000 providing for the employment of Employee by
Company pursuant to the terms of such Agreement; and

 

WHEREAS, Company and Employee have agreed that this Ninth
Amendment should supersede in its entirety the Eighth Amendment and that the
terms of the Employment Agreement should be modified to change the Term, Salary
and Bonus Plan.

 

AMENDMENT TO AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the patties hereby amend the
Agreement, effective as of January 1, 2000 as follows:

 

1.                                       The Term of the
Agreement is extended until December 31, 2009. Therefore, Section 2 (a) of
the Employment Agreement is amended such that the termination date of “December 31,
2002” is deleted and the termination date of “December 31, 2009” is
inserted in lieu thereof

 

2.                                       Section 4 (i) of
the Employment Agreement shall be amended such that the annual salary of “$300,000.
plus an annual salary advance amount of $100,000. payable against bonus earned “
is deleted and the annual salary of “$400,000” is inserted in lieu thereof

 

3.                                       Section 4 (ii) of
the Employment Agreement is deleted in it entirety and the following is
inserted in lieu thereof:

 

(a)                                  For the year
2000, an annual bonus of 5% of
profits.

(b)                                 For the years
2001-2009, an annual bonus of 10% of profits.

 

 

Bonus calculations are to be based on Company
profit; pre-tax, pre-bonus paid to all other employees, pre-reserves and
pre-Company contributions to the Deferred Compensation Plan.

 

4 (iii) A one-time grant of Restricted Stock of
seven hundred thousand (700,000) shares of Kennedy-Wilson, Inc. common
stock shall be granted to Employee effective 1-01-01. The seven hundred
thousand shares of restricted stock will vest equally over the ten-year term of
the Agreement according to the following schedule:

 

	
  Year Ending

  	
   

  	
  Number of Shares Vested

  	
   

  
	
  12-01-01

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-02

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-03

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-04

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-05

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-06

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-07

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-08

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-09

  	
   

  	
   

  	
  70,000

  	
   

  
	
  1-01-10

  	
   

  	
   

  	
  70,000

  	
   

  

 

All Restricted Stock Granted as detailed in 4 (iii) may
be deferred in the Company’s Deferred Compensation Plan at the election of the
Employee but shall not be subject to the Company match as otherwise defined in
the Deferred Compensation Plan.

 

All Restricted Stock Granted as detailed in 4 (iii) above
would vest immediately upon change in control. “Change in control” shall mean
the first to occur of any of the following events:

 

(a) Any “person” (as that tem is used Section 13 and 14 (d) (2) of
the Securities Exchange Act of 1934 (“Exchange Act”) becomes the beneficial
owner (as that term is used in Section 13 (d) of the Exchange Act),
directly or indirectly, of 50% or more of the Company’s capital stock entitled
to vote in the election of directors;

 

(b)                                During any period of not
more than two consecutive years, not including any period prior to the adoption
of this Amendment, individuals who at the beginning of such period constitute
the board of directors of the Company, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c), (d) or (e) of
this section) whose election by the board of directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
three-fourths (3/4ths) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof;

 

 

(c)                                                                                 The
shareholders of the Company approve any consolidation or merger of the Company,
other than a consolidation or merger of the Company in which the holders of the
common stock of the Company immediately prior to the consolidation or merger
hold more than 50% of the common
stock of the surviving corporation immediately after the consolidation or
merger;

 

(d)                                 The
shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or

 

(e)     The shareholders of the Company approve the
sale or transfer of all or substantially all of the assets of the company to
parties that are not within a “controlled group of corporations” (as defined in
Code Section 1563) in which the Company is a member.

 

If Employee’s employment were terminated for any
reason after December 31, 2002, Employee would acquire full ownership of
all Restricted Stock as detailed in 4 (iii) above.

 

4 (iv) A one-time contribution of $1.75 million
shall be granted to Employee, $625,000 payable 2-29-00, $625,00 payable
6-30-00, $250,000 payable 3-115-01, and $250,000 payable 6-30-01. The $1.75 million may be deferred in the Company’s
Deferred Compensation Plan at the election of the Employee and shall be subject
to the Company match as otherwise defined in the Deferred Compensation Plan.
The $1.75 million shall vest over ten years.

 

4.                   Section 9 (d) is
amended such that the following is added: “In the event of the Employee’s
death, the Restricted Stock Grant as detailed in 4 (iii) will immediately
vest and be awarded to Employee’s estate.

 

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

 

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

 

 

	
  COMPANY

  	
   

  	
   

  
	
  KENNEDY-WILSON, Inc. a Delaware
  corporation

  	
   

  	
  /s/
  Kent Y. Mouton

  
	
  /s/
  James C. Ozello, Acting Secretary

  	
   

  	
  Chairman,
  Compensation

  
	
  Compensation
  Committee

  	
   

  	
  Committee

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE

  	
   

  	
  /s/ Freeman Lyle

  
	
  /s/ William J. McMorrow,
  Chairman

  	
   

  	
  Senior Managing Director,
  and Chief Financial OfficerExhibit 10.41

 

TENTH AMENDMENT TO

 

EMPLOYMENT AGREEMENT

 

This Tenth Amendment to Employment Agreement (the “Tenth Amendment”) is
made and entered into as of April 22, 2002, by and between KENNEDY-WILSON,
INC., a Delaware corporation (the “Company”), and WILLIAM J. McMORROW, an
individual (“Employee”).

 

RECITALS

 

WHEREAS, Company and Employee have entered into that certain “Employment
Agreement” dated as of August 14, 1992, as amended January 1, 1993, January 1,
1994, March 31, 1995, January 1,
1996, May 19, 1997, August 20, 1998, August 9, 1999, January 3,
2000, and October 1, 2000 (collectively, the “Agreement”) providing for
the employment of Employee by Company pursuant to the terms of such Agreement;
and

 

WHEREAS, Company and Employee have agreed that the terms of the
Employment Agreement should be modified as set forth below.

 

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, effective as of April 22, 2002 as follows:

 

1.                                      Effective as of
April 22, 2002 (but not for any calendar year or partial fiscal year prior
thereto), Section 4 (ii) of the Employment Agreement is deleted in it
entirety, and the following is inserted in lieu thereof:

 

4 (ii) Discretionary Bonus. In addition
to the base salary provided for above, at the discretion of the Company,
Employee may receive with respect to each fiscal year (or portion thereof)
during the term of this Agreement, a discretionary bonus in an amount
determined in the sole and absolute discretion of the Compensation and Stock
Option Committees of the Board of Directors.”

 

2.                                      A new Section 4
(iv) is added as follows:

 

4 (iv) A one-time grant of Restricted Stock of
one million (1,000,000) shares of Kennedy-Wilson, Inc. common stock shall
be granted to Employee effective 4-22-02. The one million shares of restricted
stock will vest equally over the remaining eight-year term of the Agreement
according to the following schedule:

 

 

	
  Year
  Ending

  	
   

  	
  Number of Shares Vested

  	
   

  
	
  12-31-02

  	
   

  	
  89,923

  	
   

  	
   

  
	
  12-31-03

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-04

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-05

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-06

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-07

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-08

  	
   

  	
  130,011

  	
   

  	
   

  
	
  12-31-09

  	
   

  	
  130,011

  	
   

  	
   

  

 

All Restricted Stock granted as detailed in 4 (iv) may
be deferred in the Company’s Deferred Compensation Plan at the election of the
Employee but shall not be subject to the Company match as otherwise defined in
the Deferred Compensation Plan.

 

All Restricted Stock as
detailed in 4 (iv) above shall vest immediately upon any change in control
of the Company. “Change in control” shall mean the first to occur of any of the
following events:

 

(a) Any “person” (as that term is used in Section 13
and 14 (d) (2) of the Securities Exchange Act of 1934 (“Exchange Act”))
becomes the beneficial owner (as that term is used in Section 13 (d) of
the Exchange Act), directly or indirectly, of 50%
or more of the Company’s capital stock entitled to vote in the
election of directors;

 

(b) During any period of not more than two
consecutive years, not including any period prior to the adoption of this
Amendment, individuals who at the beginning of such period constitute the board
of directors of the Company, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c), (d) or (e) of this
section) whose election by the board of directors or nomination for election by
the Company’s stockholders was approved by a vote of at least three-fourths
(3/4ths) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;

 

(c) The shareholders of the Company approve any
consolidation or merger of the Company, other than a consolidation or merger of
the Company in which the holders of the common stock of the Company immediately
prior to the consolidation or merger hold more than 50% of the common stock of
the surviving corporation immediately after the consolidation or merger;

 

(d) The shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company; or

 

 

(e) The shareholders of the Company approve the
sale or transfer of all or substantially all of the assets of the Company to
parties that are not within a “controlled group of corporations” (as defined in
Code Section 1563) in which the Company is a member.

 

If any vesting of Restricted Stock in accordance
with this Agreement results in the imposition of federal and/or state income
taxes against Employee, then Company shall upon Employee’s request loan
Employee funds sufficient to discharge the federal and or state income tax
liability when due which arises solely from the vesting of the applicable
portion of the Restricted Stock. Employee shall be solely responsible for the
payment of any federal and state income taxes which are assessed as a result of
Employee’s sale of any Restricted Stock. Any loan made by Company to Employee
under the provisions of this paragraph shall bear interest at a variable rate
equal to the prime rate of interest as published in the Wall Street Journal
from time to time during the term of the loan and the principal balance of such
loan together with accrued interest thereon shall be due and payable in full on
the fifth (5th) anniversary date of the making of the loan by Company to
Employee. Any such loan may be prepaid at any time by Employee without penalty.

 

3.                                      Section 9(d) is
amended such that the following is added:

“In the event of the Employee’s death or disability
(to the extent he cannot provide services to Company as chief executive officer
on a continuing basis), the Restricted Stock grant as detailed in 4 (iii) and
4 (v) will immediately vest and be awarded to Employee’s estate. If
Employee’s employment is terminated for any reason, all unvested Restricted
Stock granted to Employee and as detailed in 4 (iv) above and Restricted
Stock previously granted as detailed in 4 (iii) of the Ninth Amendment to
Employee’s Employment Agreement dated October 1, 2000 shall vest
immediately upon such termination.”

 

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

 

 

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

 

 

	
  COMPANY

  	
   

  	
   

  
	
  KENNEDY-WILSON, Inc. a Delaware
  corporation

  	
   

  	
  /s/
  Kent Y. Mouton

  
	
  /s/
  James C. Ozello, Acting Secretary

  	
   

  	
  Chairman,
  Compensation

  
	
  Compensation
  Committee

  	
   

  	
  Committee

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE

  	
   

  	
  /s/ Freeman Lyle

  
	
  /s/ William J. McMorrow,
  Chairman

  	
   

  	
  Senior Managing Director,
  and Chief Financial Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]