Document:

Exhibit
10.29

 

FIFTEENTH
AMENDMENT TO EMPLOYMENT AGREEMENT

 

This Fifteenth Amendment
to Employment Agreement (the “Fifteenth Amendment”) is made and entered into by
and between KENNEDY-WILSON, INC., a Delaware corporation (the “Company”), and
William J. McMorrow, an individual (“Employee”).  This amendment will become effective at the
times set forth below, which include the time at which KW Merger Sub Corp. (“Merger
Sub”), a subsidiary of Prospect Acquisition Corp. (“PAX”), is merged into the
Company (the “Effective Time”).

 

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, October 1, 2000, April 22, 2002,  October 1, 2003, April 21, 2004, January 1,
2008, and February 1, 2009 (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 shall be
modified as set forth below and that, except as modified, the Agreement shall
remain in full force and effect.

 

WHEREAS, Company and
Employee have agreed that the modifications set forth below that are effective
as of the Effective Time shall be conditioned upon the consummation of the
merger of PAX into the Company.

 

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 the times
set forth below.

 

1.                                       Section 2 (b) is deleted
immediately before the Effective Time.

 

2.                                       Section 9 is deleted as of the
Effective Time and a new Section 9 is substituted as of the Effective
Time, to read as follows:

 

9.                                     Termination.

 

(a)         Either Company or Employee may terminate this Agreement at
any time during the Term, in the event of a material breach of this Agreement
by Employee or Company which is not corrected within thirty (30) days after the
written notice of the breach is delivered to the other party.  The written notice from Company to Employee
shall include a reasonably detailed description of Employee’s acts or
omissions, which constitute cause for termination.  The term “cause” shall mean:  (i) the breach of any material provision
of this Agreement; (ii) persistent misconduct, neglect or negligence in
the performance of Employee’s duties and obligations as set forth in this
Agreement; (iii) disloyal, dishonest or illegal conduct or moral turpitude
of 

 

 

Employee; (iv) such material carelessness or
inefficiency in the performance of his duties that Employee, in the reasonable
discretion of Company, is deemed unfit to continue in the service of Company;
and (v) the material and persistent failure of Employee to comply with the
policies or directives of Company and/or failure to take direction from Company
management.

 

(b) 
Employee’s employment with Company shall cease upon the date of his death or
physical or mental disability to the extent that Employee becomes disabled for
more than sixty (60) consecutive days or ninety (90) days in the aggregate in
any 12-month period and unable to perform his duties on a full-time basis.  Upon termination for death or physical or
mental disability, Company shall continue to pay Employee the basic salary
described in Section 4 for the remainder of the Term of the Agreement on
the Company’s ordinary payroll dates applicable to similarly situated employees
of the Company, together with such other employee benefits (other than
continued participation under the Company’s Section 401(k) plan) as
Employee may be entitled to under the provisions of Section 6 (or if such
benefits cannot be provided pursuant to the terms of the applicable plans,
comparable benefits, provided, however, that the provision of comparable
benefits shall be made following Employee’s termination of employment only if
and to the extent that such benefits may be provided at no additional cost
above what was previously paid by the Company).

 

(c)           If the Employee is terminated by
Company prior to the end of the Term without cause, then Company shall continue
to pay Employee the basic salary described in Section 4 for the remainder
of the Term of the Agreement on the Company’s ordinary payroll dates applicable
to similarly situated employees of the Company, together with such other
employee benefits (other than continued participation under the Company’s Section 401(k) plan)
as Employee may be entitled to under the provisions of Section 6 (or if
such benefits cannot be provided pursuant to the terms of the applicable plans,
comparable benefits, provided, however, that the provision of comparable
benefits shall be made following Employee’s termination of employment only if
and to the extent that such benefits may be provided at no additional cost
above what was previously paid by the Company).

 

(d)           If Company instructs Employee to work
full-time or substantially full-time at any location not acceptable to Employee
(other than the Company’s main headquarters) that is more than 50 miles from
Employee’s then principal place of work and more than 50 miles from Employee’s
then principal residence, or eliminates or materially reduces his duties as
CEO/Chairman, then Employee may elect to deem such action(s) a
constructive termination by Company and resign his employment, provided that (i) such
resignation occurs within one year of such action(s); (ii) Employee
provides written notice to the Company of such action(s) within 90 days
thereof; and (iii) the Company fails to cure the action(s) constituting
such constructive termination within 30 days of receipt of the notice.  In the event of such
a resignation, Company shall continue to pay or provide Employee for the
remainder of the Term the basic salary described in Section 4 of the
Agreement on the Company’s ordinary payroll dates applicable to similarly
situated employees of the Company, together with such other employee benefits
(other than continued participation under the 

 

2

 

Company’s Section 401(k) plan) as Employee may be entitled to
under the provisions of Section 6 (or if such benefits cannot be provided
pursuant to the terms of the applicable plans, comparable benefits, provided,
however, that the provision of comparable benefits shall be made following
Employee’s termination of employment only if and to the extent that such
benefits may be provided at no additional cost above what was previously paid
by the Company).

 

(e)           If Employee terminates this Agreement
without cause or Employee is terminated for cause, then Employee shall be
entitled to receive only the compensation described in Section 4 above
earned to the date of termination. Company shall not pay Employee the salary
and other benefits which Employee would have been entitled to for the remainder
of the term of the Agreement under Sections 4 and Section 6 above,
provided that in the event Employee so resigns, Employee will receive a bonus
for the year in which he resigned in the ordinary course but prorated based on
the number of days Employee was employed by the Company that year (provided
that, if the bonus is intended to be qualified under section 162(m) of the
Internal Revenue Code, payment of the prorated bonus shall be contingent on
satisfaction of the performance target applicable to the bonus).

 

(f) This Agreement may
be terminated by Employee at any time, provided such termination shall have the
effect set forth as follows:

 

(i) Termination of this Agreement pursuant to
this Section 9 shall not relieve Employee of his obligations to comply
with Sections 7 and 8 hereof, which provisions shall survive the termination of
this Agreement.  If, and only if,
Employee is terminated without cause or Employee resigns due to the Company’s
material breach of this Agreement which is not corrected within thirty (30)
days after the Employee’s written notice of the breach to the Company, then
Employee shall be relieved of his obligations under Sections 7 and 8 hereof.

 

3.                                       A new Section 11 is added, effective
as of September 4, 2009:

 

11.                               October 15, 2009 Bonus Payments.

 

The Company shall pay
Employee a cash bonus of $4.85 million on October 15, 2009 if Employee is
employed by Company through October 15, 2009.  The bonus shall be
promptly repaid if either (a) the merger of Merger Sub into Company does
not occur by November 15, 2009 or (b) Employee has not remained
employed with the Company through the Effective Time.  The requirement of continued employment in
the preceding two sentences shall not apply, however, if employment has
terminated on account of death or disability.

 

4.                                       A new Section 12 is added, effective
as of the Effective Time:

 

12.                               April 1, 2010 and January 1,
2011 Bonus Payments.

 

(a)           Subject
to the conditions set forth in this Section 12, Company shall pay Employee
a cash bonus of $2.425 million on April 1, 2010, and a cash bonus of
$4.425 million on January 1, 2011.

 

3

 

(b)           The
bonus payable April 1, 2010 is conditioned on (1) approval by the PAX
Compensation Committee of the issuance of the bonus as a Performance Unit Award
under the Kennedy-Wilson Holdings, Inc. 2009 Equity Participation Plan
(the “Plan”), (2) approval of the Plan by the shareholders of PAX (3) Employee’s
continued employment through April 1, 2010, and (4) satisfaction as
of March 31, 2010 of the Performance Target, and (5) reapproval of
the Performance Target by the PAX Compensation Committee subsequent to the
Effective Time.  The “Performance Target”
is that the Company’s assets under management be at least $3 billion.  For this purpose, “assets under management”
shall equal the value of assets under management by the Company, as reflected
in the footnotes to the Company’s financial statements, plus the cost of properties subject to property
management contracts with the Company (not taking into account any properties
whose value is reflected in the footnotes). 
In the event that the Performance Target is not met as of March 31,
2010, the bonus otherwise due March 31, 2010 shall, nevertheless, continue
to be paid on July 1, 2010, October 1, 2010, or January 1, 2011,
respectively, if the Performance Target is satisfied as of the earliest of June 30,
2010, September 30, 2010, or December 31, 2010, respectively, and
Employee has remained employed through the date on which the Performance Target
is met.

 

(c)           The
bonus payable January 1, 2011 is conditioned on (1) approval by the
PAX Compensation Committee of the issuance of the bonus as a Performance Unit
Award under the Plan, (2) approval of the Plan by the shareholders of PAX (3) Employee’s
continued employment through January 1, 2011, (4) satisfaction of the
Performance Target as of December 31, 2010, and (5) reapproval of the
Performance Target by the PAX Compensation Committee subsequent to the
Effective Time.

 

(d)           Notwithstanding
the preceding subsections of this section, the bonuses described herein shall
be payable even if Employee is not employed through the dates set forth above,
provided that the other conditions to the payment of the bonus are met and
Employee terminates employment under conditions that would entitle him under Section 9(c) or
(d) to payment of his salary through the remainder of the Term.

 

5.                                       A new Section 13 is added, effective
immediately prior to the Effective Time.

 

13.                               Note Forgiveness.

 

Immediately prior to the Effective Time, the principal
and interest shall be forgiven on the note dated April 10, 2006 from
Employee to Company and the note shall be treated as paid in full.

 

6.                                       A new Section 14 is added, effective
as of the Effective Time: ___ 2009:

 

14.                               Restricted Shares.

 

(a) Immediately after the Effective Time and
subject to the conditions set forth herein, Employee shall be issued 900,000
restricted shares 

 

4

 

of common stock of PAX.  The
restricted shares are conditioned on (1) approval by the PAX Compensation
Committee of the issuance and terms of the restricted shares under the
Kennedy-Wilson Holdings, Inc. 2009 Equity Participation Plan (the “Plan”),
subject to the conditions set forth below in (b) and (c), (2) approval
of the Plan by the shareholders of PAX, (3) Employee’s continued
employment through the dates set forth below in (b), (4) satisfaction of
the Performance Target, and (5) reapproval of the Performance Target by
the PAX Compensation Committee subsequent to the Effective Time.

 

(b)           180,000
restricted shares shall become vested on each of the first through fifth
anniversaries of the Effective Time, provided that, with respect to the shares
vesting on the first anniversary, the Performance Target is met as of September 30,
2010; with respect to the shares vesting on the second anniversary, the
Performance Target is met as of September 30, 2011; and, with respect to
the shares vesting on the third through fifth anniversaries, the Performance
Target is met as of September 30, 2012 with respect to each tranche of
180,000 restricted stares, vesting shall be conditioned upon Employee’s continued
employment through each of the first, second, third, fourth and fifth
anniversaries of the Effective Time, respectively.

 

(c)           Notwithstanding subsections (a) and (b), if, prior to
the Employee’s fully satisfying the above 5-year vesting requirement, Employee’s
employment with the Company shall be terminated by the Company without cause or
by the Employee for Good Reason, in any such event, the requirement of
continued employment shall no longer apply, so that, assuming the Performance
Target is met as of the relevant date, the restricted shares that have not been
forfeited as of such termination date shall thereupon become fully vested, no
longer subject to restrictions, and transferable.  As used in this subsection, “Good Reason”
shall mean the voluntary termination by Employee of his employment with the
Company within six months of the Company’s (A) instructing the Employee to
work (or provide services) full-time or substantially full-time at any location
not acceptable to the Employee (other than the employer’s main headquarters)
that is more than 50 miles from Employee’s principal place of work and more
than 50 miles from Employee’s principal residence, (B) eliminating or
materially reducing the Employee’s duties for the Company, or (C) materially
reducing the Employee’s base pay (or compensation).  In addition, all unvested restricted shares
that have not been forfeited in connection with a termination of employment
shall become immediately vested in the event of a Change in Control, as defined
in the Plan.

 

7.                                       A new Section 15 is added, effective
as of the Effective Time:

 

15.                               Section 280G.

 

(a)           Notwithstanding anything in this
Employment Agreement to the contrary, in the event that the Company’s
independent public accountants (the “Accountants”) shall determine that receipt
of all payments or benefits made or provided by the Company or its affiliated
companies in the nature of compensation to or for Employee’s benefit (each, a “Payment”),
whether payable or to be provided pursuant to this Employment Agreement or
otherwise, and including, without limitation, the post-termination payments and

 

5

 

benefits
provided pursuant to Section 9 and the restricted shares provided pursuant
to Section 14, would subject Employee to the excise tax under Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), the Payments
shall be reduced to the Reduced Amount (as defined below).

 

(b)                               If the
Accountants determine that aggregate Payments should be reduced to the Reduced
Amount, the Company shall promptly give Employee notice to that effect and a
copy of the detailed calculation thereof. 
Any reduction of the Payments shall be made in such a manner as will
provide Employee with the greatest Net After-Tax Receipt, as defined below.

 

(c)                                As a result of
the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accountants hereunder, it is possible that
Payments will have been made by the Company to or for the benefit of Employee
which should not have been so made (“Overpayment”), or that additional amounts
which will have not been paid or distributed by the Company to or for the
benefit of Employee could have been so paid or distributed (“Underpayment”), in
each case, consistent with the calculation of the Reduced Amount
hereunder.  In the event that the
Accountants, based upon the assertion of a deficiency by the Internal Revenue
Service against either the Company or Employee which the Accountants believe has
a high probability of success, determine that an Overpayment has been made,
Employee shall pay any such Overpayment to the Company together with interest
at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided, however, that no amount shall be payable by Employee to the
Company if and to the extent such payment would not either reduce the amount on
which Employee is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. 
In the event that the Accountants determine that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company to or for
the benefit of Employee together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code.

 

(d)                               The following
terms have the meanings set forth below:

 

(i)            “Reduced Amount” shall mean the
greatest amount of Payments that can be paid that would not result in the
imposition of the excise tax under Section 4999 of the Code.

 

(ii)           “Net After-Tax Receipt” shall mean
the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and
280G(d)(4) of the Code) of all Payments net of all taxes imposed on
Employee with respect thereto under the Code and under applicable state and
local laws, determined by applying the highest marginal rate under Section 1
of the Code  and under state
and local laws which applied to Employee’s taxable income for the immediately
preceding taxable year, or such other rate(s) as Employee certifies, in
Employee’s sole discretion, as likely to apply to him in the relevant tax
year(s).

 

(e)                                Subject to the
last sentence of this subsection (e), all determinations made by the
Accountants under this Section 15 shall be conclusive and binding upon the
Company and Employee for all purposes. 
All 

 

6

 

fees
and expenses of the Accountants shall be borne solely by the Company.  For purposes of making the calculations
required by this Section 15, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code.  The Company
and Employee will furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make determinations under
this Section 15.   In the event that
Employee disagrees with the determination of the Accountants under this Section 15,
he can have such determination reviewed pursuant to the alternative dispute
resolution currently set forth in the employment agreement between the Company
and Donald J. Herrema, effective as of June 15, 2009.  If such mechanism is used, review shall be de
novo and no presumption of correctness shall attach to the Accountants’
determination.

 

8.                                       A new Section 16 is added, effective
as of January 1, 2009.

 

16.                               Section 409A.

 

(a)                                The Company intends that the
reimbursements, payments and benefits to which Employee could become entitled
under this Employment Agreement be exempt from or comply with Section 409A
of the Code and the regulations and other guidance promulgated thereunder (“Section 4009A”).  The provisions of this Section 16 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 the
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 the 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 the Employee under Section 409A,
unless such action or omission is pursuant to the Employee’s written request.

 

(b)           To the extent applicable, each and every payment to be
made pursuant to this Employment 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).

 

(c)           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 the 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 Employment Agreement or otherwise both (i) constitutes
a “deferral of compensation” within the meaning of and 

 

7

 

subject to Section 409A (“Nonqualified
Deferred Compensation”) and (ii) cannot be paid or provided in a manner
otherwise provided herein without subjecting the 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.

 

(d)           Except to the extent any reimbursement, payment or benefit
to be paid or provided under this Employment Agreement does not constitute
Nonqualified Deferred Compensation, (i) 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), (ii) 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 (iii) the right to payment or reimbursement or in-kind
benefits may not be liquidated or exchanged for any other benefit.

 

(e)           Any reimbursement, payment or benefit to be paid or
provided under this Employment 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 Employee’s
second taxable year following 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
Employee’s taxable year in which Employee’s Separation from Service occurs.

 

(f)            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 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 Fifteenth Amendment on the dates written below.

 

8

 

COMPANY

KENNEDY-WILSON, Inc.

	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kent Y. Mouton

  	
   

  	
  Date

  
	
  Chairman, Compensation
  Committee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  William J. McMorrow,
  Chairman

  	
   

  	
  Date

  

 

9Exhibit
10.30

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and
entered into as of the 14 day of August, 1992, by and between Kennedy-Wilson, a
Delaware corporation with its principal office located in Santa Monica,
California (the “Company”), and William J. McMorrow, an individual (“Employee”).

 

AGREEMENT

 

1.             Services Provided to the
Company. During the term of this Agreement, Employee shall devote 100% of his
working hours to advance the business and welfare of the Company and its
subsidiaries and shall have such powers and duties as may from time to time be
prescribed by the Board of Directors of the Company, which duties may, in the
Company’s sole discretion, be changed in any legal manner from time to time.
The initial duties of Employee shall include, without limitation, serving the
Company as Chief Executive Officer and Chairman of the Board of the Company.
Employee shall provide the Company with the benefit of his best judgment and
efforts in performing his duties hereunder.

 

2.             Term. Employee
shall be employed by the Company pursuant to this Agreement for a term
beginning on the date of this Agreement and continuing through to, and
terminating at the close of business on the third anniversary of the date
hereof (unless earlier terminated pursuant to Section.9 hereof).

 

3.             Commitment to the Company. During the
ten of this Agreement, Employee shall not be involved, individually or as an
employee, principal, officer, general partner, director or shareholder of any
company, in any real estate development activities without first obtaining the
consent and approval of a majority of the Company’s Board of Directors. The
limitation contained in this Section shall not apply, however, to the ownership
of less than 1% of the capital stock of any publicly held corporation or to
participation in real estate development activities as a limited partner. For
purposes of this Section, Employee shall be deemed the owner of any interests
held by Employee, Employee’s spouse, or any other un-emancipated minor member
of Employee’s family.

 

4.             Compensation to Employee. During the
term of this Agreement, the Company shall pay to Employee compensation (the “Compensation”)
consisting of:

 

(i)            a salary equal to $450,000
per annum, payable on such basis as is the normal payment pattern of the
Company, not to be less frequently than monthly; and

 

(ii)           an annual bonus in an amount
equal to up to 100% of the Employee’s annual salary, the exact amount of which
shall be determined by the Compensation Committee (the “Committee”) of the
Board of Directors of the Company. In making such determination, the Committee
shall consider, among other things, the annual financial results of the
Company, including return on equity.

 

 

5.         Expenses. Employee
shall be entitled to reimbursement from the Company for any out-of-pocket
expenses, including travel expenses, incurred by Employee in the ordinary
course of providing his services hereunder. Such reimbursement shall be made by
the Company within 30 days after receipt of a statement therefore from Employee
setting forth in reasonable detail the expenses for which reimbursement is
requested, accompanied by customary documentation evidencing such expenses.

 

6.         Insurance Coverage and
Benefits. During the term of this Agreement, the Company
will provide Employee, at the Company’s expense, coverage under the major
medical, hospitalization and other insurance programs maintained by the Company
for its officers generally. In addition, Employee will receive during the term
of this Agreement all other company-provided benefits to which Employee was
entitled in the ordinary course immediately prior to the date hereof as an
employee of Kennedy-Wilson, Inc., a California corporation and all other
company provided benefits which are, from time to time, made available by the
Company to its officers.

 

7.         Noncompetition Covenant. During the
term of this Agreement and for a period of three years thereafter, Employee
will not, directly or indirectly:

 

(a)           (i) in any manner induce,
attempt to induce, or assist others to induce or attempt to induce any
employee, partner, joint venturer, independent contractor, agent or customer of
the company to terminate its, his or her association with the Company, or (ii) do
anything to interfere with the relationship between the Company and such person
or entity or other persons or entities dealing with the Company; or

 

(b)           in any capacity (whether as
an individual, promoter, proprietor, general partner, joint venturer, employee,
agent, consultant, director, officer, manager, shareholder or otherwise) work
for, act as a consultant or adviser to, own any interest in, or otherwise be
connected in any manner with the ownership, management, operation or control of
(collectively “Associated With”), any person or entity which at any time during
the term of this Agreement or for a period of three years thereafter engages in
the businesses engaged in by the Company including without limitation the real
estate auction marketing business without the consent of the Board of Directors
of the Company. Employee acknowledges that the Company’s existing services are
marketed internationally and that its business plans include marketing
throughout the entire world either directly or through others. Accordingly the
restrictions in this Section 7 shall extend to operations in any part of the
world. Employee further acknowledges that all patents, trade secrets, know how,
technology data, formulae, plans, specifications and other information used by
the Company or under development in connection with its business are the
property of the Company, and that Employee does not have the right to disclose,
make available or use any of the foregoing for the benefit of himself or any
other person or entity.

 

(c)           Nothing in this Section 7
shall restrict Employee from owning not more than 1% of the outstanding shares
of any class of securities registered pursuant to the Securities Exchange Act
of 1934, as amended, or any limited partner interest in a limited partnership
or similar passive investment interest so long as the nature of such investment

 

 

prevents, pursuant to applicable law,.
Employee’s control of the management of the issuer of such investment interest.

 

(d)           The parties hereto intend
that the covenants and agreements contained in this section 7 shall be deemed
to be a series of separate covenants and agreements, one for each and every
country, county, state, city and other jurisdiction in the world with respect
to which the Company’s business has been or is hereafter carried on. If any of
the foregoing is determined by any court of competent jurisdiction to be
invalid or unenforceable by reason of such agreement extending for too great a
period of time or over too great a geographical area, or by reason of its being
too extensive in any other respect, such agreement shall be interpreted to
extend only over the maximum period of time and geographical area and to the
maximum extent enforceable, all as determined by such court in such action. Any
determination that any provision hereof is invalid or unenforceable, in whole
or in part, shall have no effect on the validity or enforceability of any
remaining provision thereof.

 

(e)           Notwithstanding the
foregoing, nothing herein shall prevent Employee, following the termination of
his employment or the end of the term of this Agreement, from being associated
with any person or entity engaged in any real estate activities or matters
other than real estate auction activities or matters.

 

8.           Confidential
and Proprietary Information. Employee recognizes that
he has occupied and will occupy a position of trust with respect to business
information of a confidential or proprietary nature which is the property of
the Company and which has been and will be imparted to him or her from time to
time in the course of the performance of his duties under this Agreement.
Employee agrees that:

 

(a)             he shall not at
any time, whether during the term hereof or thereafter, use or disclose
directly or indirectly any confidential or proprietary information of the Company
to any person, except that he may use and disclose to other Company personnel
such confidential and proprietary information in the course of the performance
of his duties hereunder; and

 

(b)             he shall return
promptly upon the termination of this Agreement or otherwise upon the request
of the Company any and all copies of any documentation or materials containing
any confidential or proprietary information of the Company.

 

For
purposes of this Agreement, the term. “confidential or proprietary infor-mation”
of the Company shall include all information of any nature and in any form
which is owned by the Company and which is not at the time publicly available
or generally known to persons engaged in businesses similar to that of the
company, including, but not limited to, practices, procedures and methods and
other facts relating to the business of the company; practices, procedures and
methods and other facts related to sales, marketing, advertising, promotions,
financial matters, clients, client lists of the Company and all other
information of a confidential and proprietary nature.

 

 

9.                                 Termination.

 

(a)             This Agreement
will terminate upon the death or incapacity of Employee. Incapacity shall mean
the inability to perform the services due hereunder for a consecutive 30
calendar day period.

 

(b)             This Agreement
may also be terminated by the Company:

 

(i)                 in the event of
a material breach of this Agreement by Employee which is not corrected within10
days after the Company’s written notice of the breach to Employee; and

 

(ii)                for cause,
which includes, without limitation, Employee’s violation of law, material
wrongful act or omission, malfeasance or gross negligence which causes or can
reasonably be anticipated to cause material damage to the business or reputation
of the Company.

 

(c)             This Agreement
may be terminated by Employee upon a material breach of this Agreement by the
company which is not corrected within 10 days after Employee’s written notice
of the breach to the company.

 

(d)             Termination of
this Agreement pursuant to this Section 9 shall not relieve Employee of his
obligations to comply with Sections 7 and 8 hereof. Upon the termination of
this Agreement by the Company pursuant to Section 9(b) or the resignation of
Employee during the term of this Agreement, any further compensation to
Employee shall terminate on the date this Agreement is so terminated by the
company or Employee resigns; provided that in the event Employee so resigns,
Employee will receive a bonus f or the year in which he resigned in the
ordinary course but prorated based on the number of days the Employee was
employed by the Company that year. In all other cases, Employee, or his estate,
will receive all salary and bonuses due hereunder and remaining to be paid,
during the term hereof in the ordinary course.

 

10.         General
Provisions.

 

(a)             Notices. Any notice to
be given pursuant to this Agreement shall be in writing and, in the absence of
receipted hand delivery, shall be deemed duly given when mailed, if the same
shall be sent by certified or registered mail, return receipt requested, or by
a nationally recognized overnight courier, and the mailing date shall be deemed
the date from which all time periods pertaining to a date of notice shall run.
Notices shall be addressed to the parties at the following addresses:

 

If
to the Company, to: Kennedy-Wilson, Inc.

2950 31st Street

Suite 300

Santa Monica, California 90405

Attention: 
President

 

 

	
  If
  to Employee, to:

  	
  William J. McMorrow c/o
  Kennedy-Wilson, Inc. 2950

  31st Street suite 300

  
	
   

  	
  Santa Monica, California
  90405

  

 

(b)           Successors and
Assigns. This Agreement shall be binding upon and shall inure to the benefit
of the Company and any successors whether by merger, consolidation, transfer of
substantially all assets or similar transaction, and it shall be binding upon
and shall inure to the benefit of Employee and his heirs and legal
representatives. This Agreement is personal to Employee and shall not be
assignable by Employee.

 

(c)            Waiver of
Breach. The waiver by the Company or Employee of a breach of any provision of
this Agreement by the other shall not operate or be construed as a waiver of
any subsequent breach by the other.

 

(d)           Entire
Agreement/Modification. This Agreement shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof,
and shall supersede all previous oral and written and all contemporaneous oral
negotiations, commitments, agreements and understandings relating hereto. Any
modification of this Agreement shall be effective only if it is in. writing and
signed’ by the parties to this Agreement;

 

(e) Applicable Law. The validity of this Agreement and the
interpretation and performance of all of its terms shall be construed and
enforced in accordance with the laws of the
State of California.

 

(f)            Severability. Any provision
of this Agreement which is deemed invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction and subject to this paragraph be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable.

 

(g)           Counterparts. This
Agreement may be executed in a number of identical counterparts, each of which
shall be deemed an original for all purposes.

 

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

 

	
  EMPLOYEE

  	
   

  	
  KENNEDY-WILSON, INC.

  
	
   

  	
   

  	
  A Delaware corporation

  
	
  /s/ William J. McMorrow

  	
   

  	
  /s/ William Stevenson

  
	
   

  	
   

  	
  President

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