Document:

Exhibit 10.50

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and
entered into as of June 15, 2009 by and between Kennedy Wilson, Inc., a Delaware
corporation (the “Company”), and Donald J. Herrema (“Employee”), with reference
to the following facts and circumstances:

 

RECITALS:

 

A.                                   Company is a diversified
real estate marketing and investment firm whose businesses include the management,
marketing, development and acquisition of real estate and real estate related assets,
such as secured promissory notes, real estate brokerage and marketing programs for
all types of properties and financial instruments. Employee is experienced in real
estate transactions and financial instruments.

 

B.                                     Company desires
to employ Employee and Employee desires to be employed by Company for the purposes
and on the terms and conditions set forth in this Agreement.

 

C.                                     This Agreement replaces
and supersedes in their entirety any and all prior agreements, express or implied,
written or oral, performed or unperformed, pertaining to the employment of Employee
or any and all consulting agreements and the compensation to be paid to him therefore,
and all such prior agreements and understandings are hereby terminated and shall
be of no further force or effect.

 

NOW, THEREFORE, in consideration
of the mutual covenants set forth herein and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Company and Employee
agree as follows:

 

1.                                       Employment. Company hereby
employs Employee and Employee hereby accepts employment to perform the duties described
in Section 2 below, on the terms, conditions and covenants set forth in this Agreement.

 

2.                                       Services Provided
to the Company. Subject to the policy guidelines and directives of
the Company which are provided to him by Company from time to time during the term
of this Agreement, Employee shall serve as Executive Vice Chairman of Kennedy Wilson
International, and President and CEO of Kennedy Wilson East, and be responsible
for the operation of Kennedy Wilson East, and to advance the business and welfare
of Kennedy Wilson as determined by the Company from time to time, and have such
powers and duties as may from time to time be prescribed by the Chairman and Chief
Executive Officer of the Company, which duties may, in the Company’s reasonable
discretion, be changed in any legal manner from time to time. Employee shall have
no authority to bind or obligate Company to the purchase or sale of any real property,
or to any other financial commitment, including without limitation the borrowing
of any monies on a secured or unsecured basis, without obtaining the prior authorization
of Co9(any as to the specific transaction. Employee’s duties also shall include
such other matters or responsibilities as Company and Employee may jointly agree
upon from time to time during the term of this Agreement.

 

 

Employee will serve as Member
of the Executive Committee of Kennedy Wilson International.

 

Employee’s employment is on a
full-time and “best efforts” basis meaning that during the term of this Agreement,
Employee shall not accept any full or part-time employment, including without limitation
as an Independent Consultant, after working hours or otherwise, without the prior
written consent of Company, which may be given, withheld or conditioned in Company’s
sole and absolute discretion. Employee shall devote his full energies, interests,
abilities, and productive time to the performance of his duties and responsibilities
under this Agreement. During the term of this Agreement, Employee shall not, directly
or indirectly, whether as a partner, employee, creditor, shareholder or otherwise,
promote, participate or engage in any activity or other business competitive with
Company’s businesses. Notwithstanding the foregoing, Company acknowledges that Employee
has made and will continue to make personal investments that will require Employee’s
periodic attention. Employee may participate in such personal investments to the
full extent desired by Employee so long as such personal investment activity does
not detract from Employee’s ability to devote his full energies and productive interests
to the performance of his duties and responsibilities under this Agreement.

 

3.                                       Term of Employment.

 

(a)                                  Employee shall be
employed by the Company pursuant to this Agreement for a term (the “Term”) beginning
on June 15, 2009, and continuing through to, and terminating at the close of business
on December 31, 2010 (unless earlier terminated pursuant to Section 11).

 

4.                                       Commitment to the
Company.

 

(a)                                  During the Term,
Employee shall not be involved, individually or as an Employee, principal, officer,
general partner, director or shareholder, in the marketing and! or sale of any real
estate properties or any real estate activities that are not proprietary to Kennedy
Wilson, without first obtaining the consent and approval of a majority of the Company’s
Chairman / CEO. The limitation contained
in this Section 4 shall not apply, however, to the ownership of not more than one
percent (l%) of the outstanding shares of any class of securities of a publicly-held
issuer subject to the public reporting requirements of the Securities and 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 interests. For purposes of this Section 4, Employee shall
be deemed the owner of any interests held by Employee, Employee’ spouse, or any
other un-emancipated minor member of the Employee’s family.

 

 

(b)                                 Employee shall,
at all times during the Term, strictly adhere to and comply with all of Company’s
policies, rules and procedures as they currently exist and as they may be changed
by the Company. Employee agrees that to the best of his ability and experience he
will at all times loyally and conscientiously perform all of the duties and obligations
required of him expressly or by implication by the terms of this Agreement.

 

5.                                       Compensation.

 

(a) Salary: Company shall
pay a basic salary to Employee at the rate of $50,000.00 per month ($600,000.00
annualized) for the term of this Agreement, payable in bi-monthly equal installments,
$50,000.00 per month total, subject to such deductions and withholdings as Company
may from time to time be required to make pursuant to applicable law, governmental
regulation or order.

 

(b) 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 Committee of the Board of Directors.
For calendar year 2009, Employee will receive a minimum bonus of $500,000. to be
paid no later than March 31, 2010.

 

(c)                                  Stock Options : Upon execution
of this Agreement the Company shall grant to Employee under the Company’s 2009 Incentive
and Non-statutory Stock Option Plan a non-transferable option to purchase an aggregate
of 100,000 shares of the Common Stock at an exercise price of $30.00 per share (the
“Exercise Price”), The grant of such options is to be approved by the Stock Option
Committee of the Board of Directors of the Company on or before the next Stock Option
Committee meeting, on such terms and subject to such conditions as are set forth
in the Stock Option Agreement between the Company and Employee.

 

(d)                                 Right to Invest : Consultant shall
have the right to invest as a general partner in KW Fund III consistent with others
who have a similar level of responsibility to the Company, as well as Employee will
be eligible to invest in other principal investments of Company at an investment
percentage consistent with others who have a similar level of responsibility at
the Company.

 

(e)                                  Change in Control. In the event of
a “Change in Control” as defined below the Company shall make a one-time payment
to Employee upon such Change in Control equal to $500,000. “Change in Control” shall
mean that William J. McMorrow, Chairman! CEO is no longer an Employee of Company.

 

Employee acknowledges that Company
has not provided Employee with any projections or estimates of a Discretionary Bonus
that might be received by Employee under the terms of this Agreement as an inducement
to Employee to accept employment with Company.

 

6.                                       Other Benefits. During the Term
of his employment and subject to applicable eligibility requirements of position,
tenure, salary, age, health and other qualifications as may be 

 

 

set forth in the Company’s Employment
Handbook, or pursuant to the terms of the applicable benefit provider, Employee
shall participate in such benefit plans or programs as are available to the Company’s
other employees, including without limitation medical, dental, disability, life
insurance, and, 401K Plan.

 

7.                                       Business Expenses. Employee will
be required to incur ordinary and necessary travel and other business expenses in
connection with the performance of his duties hereunder, and Employee shall be entitled
to reimbursement from Company for such expenses in accordance with Company’s policies
and procedures.

 

8.                                       Non-Competition. For all periods
that Employee is employed pursuant to this Agreement and for a period of six (6)
months thereafter, unless Company has terminated Employee without cause, or if Company
has not renewed Employee’s employment in Company’s sole and absolute discretion,
Employee shall not directly or indirectly:

 

(a)                                  Engage in any business
in the State of New York which engages in the same businesses or similar businesses
engaged in by the Company during the Term, without the consent of the Board of Directors
of the Company, or which would result in using or revealing any trade secrets or
confidential information of the Company, including but not limited to activities,
whether direct or indirect, as proprietor, partner, shareholder, principal, agent,
or employee; and

 

(b)                                 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 do anything to interfere
with the relationship between the Company and such person or entity or other persons
or entities dealing with the Company.

 

(c)                                  The parties hereto
intend that the covenants and agreements contained in this Section 8 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 extend 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 hereof.

 

(d)                                 Notwithstanding
the foregoing, nothing herein shall prevent Employee, following the termination
of his employment or the end of the Term, whichever is later, from being associated
with any person or entity engaged in any real estate activities or matters other
than real estate auction activities or other activities which constitute a primary
line of business of the Company at the time of such termination. Employee represents
and warrants that he is not restricted or prohibited in any way from entering into
this Agreement or performing services

 

 

hereunder
at any time, whether by non-competition, covenant, or otherwise, and shall indemnify,
defend and hold the Company harmless from and against any damages, claims, costs
(including attorney’s fees) or liabilities as a result of the incorrectness of such
representation and warranty.

 

9.                                       Trade Secrets. Employee has not
disclosed to Company, and Employee has been advised that Company will not accept
at any time during the course of Employee’s employment at Company, the disclosure
of any trade secret (as that term is defined in California Civil Code Section 3426
et. Seq.) the disclosure or misappropriation of which by Employee would constitute
a breach by Employee of any obligation to any third party, including any former
employers. Employee represents and warrants he has informed Company of the existence
of any and all agreements, including covenants not to compete, between Employee
and third parties which may in any way relate to, impact, or prevent Employee’s
employment at Company. Employee represents and warrants he has not taken any act
prior to signing this Agreement that constitutes a breach of any agreement which
may in any way relate to, impact, or prevent Employee’s employment at Company.

 

10.                                 Confidential and
Proprietary Information. Employee recognizes that he 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 from time to time in the course of the performance of his duties under this
Agreement. All agreements, documents, studies, analyses, comparables, data, statistics,
marketing materials, leads and lead lists developed or prepared by Employee or others
in Company’s employ during the term of this Agreement shall be and remain confidential
and shall be the sole property of Company. Employee hereby acknowledges that Company
develops and utilizes valuable procedures, confidential information and copyrighted
materials, including but not limited to names of property owners who may wish to
sell their property by auction or other means, names of potential purchasers, leads
and lead lists, studies and analyses, methods of obtaining prospects, marketing
and auction procedures and various brochures and other printed materials, all of
which constitute a valuable part of Company’s assets built up by Company’s ingenuity,
time, labor and expense over a period of many years and all of which constitute
Company trade secrets. Employee agrees that:

 

(a)                                  He shall not at
any time, whether during the Term or thereafter, use, divulge or disclose directly
or indirectly any confidential or proprietary information of the Companies 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
or when legally required to do so in connection with any pending litigation or administrative
inquiry; 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 Information” of the Company shall include
all information which is owned by the Companies and which is not at the time publicly
available or generally known to persons engaged in businesses similar to that of
the Company, including practices, procedures and methods and 

 

 

other facts relating to the business
of the Companies; practices, procedures and methods and other facts related to sales,
marketing, advertising, promotions, financial matters, clients, client lists of
the Company and similar information of a confidential and proprietary nature. Employee
agrees that his breach of this Section 10 will cause irreparable harm to the Company.
Employee agrees that the remedy at law for any breach by him of this Section 10
will be inadequate and, in addition to any other remedy available to the Company,
the Company shall be entitled to injunctive relief for any actual or threatened
breach of this Section 10 without proof that any actual damages have been caused
by such breach, and without any need to post bond or similar security.

 

11.                                 Termination.

 

(a)                                  Termination. (Employment At
Will) Either Company or Employee may terminate this Agreement at any time during
the eighteen (18) month Term, with or without cause, by delivering written notice
of its election to the other. The written notice of termination for cause 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 provision of this Agreement; (ii) 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 thirty (30) consecutive
days or sixty (60) days in the aggregate in any 12-month period to perform his duties
on a full-time basis. Upon termination for physical or mental disability, Employee
shall be entitled to receive the compensation described in Section 5(a)-(b) and
Section 6 to the date of termination. Upon termination for death, Employee shall
be entitled to receive the compensation described in Section 5(a)-(b) to the date
of termination, and such compensation will be payable to Sheryl A. Herrema or such
Trust established for her benefit. Upon the simultaneous death of Employee and Sheryl
A. Herrema such compensation shall be paid to Trusts established for the benefit
of Employee’s children Douglas James Herrema, Markus Donald Herrema and Katherine-Grace.

 

Herrema, as per Employee’s Last Will and Testament.

 

(c)                                  If the term of the
Agreement is terminated by Company without cause, then Company shall continue to
pay Employee the salary and other benefits described in Section 5(a) for the remainder
of the Term of the Agreement, together with such other compensation as Employee
may be entitled to under the provisions of Section 6, Benefits (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).

 

(d)                                 Except as otherwise
provided in subparagraph 11(c) above, if Employee terminates this Agreement without
cause, then Employee shall be entitled to receive only the compensation described
in Section 5 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 Section 5 and Section 6 above.

 

(e)                                  If the Term of Employee’s
employment is terminated for cause, then Employee shall be entitled to receive only
the compensation described in Section 5 above earned to the date of termination.

 

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

 

Termination of this Agreement pursuant to this Section
11 shall not relieve Employee of his obligations to comply with Sections 9 and 10
hereof, which provisions shall survive the termination of this Agreement. If and
only if, Employee resigns due to the Company’s material breach of this Agreement
which is not corrected within ten (10) days after the Employee’s written notice
of the breach to the Company, then Employee shall be relieved of his obligations
under Section 10 hereof.

 

12.                                 Alternative Dispute
Resolution. The parties to this Agreement specifically desire an
early resolution of any dispute between them, which arises out of this Agreement.
It is therefore, agreed that any controversy arising out of this Agreement, whether
dealing with breach, interpretation or otherwise, shall be heard by a reference
(“Referee”) pursuant to the provisions of the applicable sections of the Code of
Civil Procedure and in accordance with the provisions described below; provided,
however, that if injunctive relief is sought, the complaining party may seek such
relief from the California Superior Court without the use of a Referee.

 

(a)                                  Enforcement of Agreement. This reference
provision may be enforced by the filing of a complaint or petition or motion seeking
specific enforcement. Service of such motion on the opposing party shall constitute
the “Claim Date” for purposes of this provision.

 

(b)                                 Selection of Referee. The Referee shall
be a retired Judge of the Court selected by mutual agreement of the parties. If
the parties cannot agree then a Referee shall be appointed by the California Superior
Court in accordance with the appropriate Section of the Code of Civil Procedure.
Each party shall be entitled to only one disqualification pursuant to the appropriate
Section of the Code of Civil Procedure. The parties hereby waive their right to
a trial by jury and agree that their dispute shall be tried by the Referee so selected.

 

(c)                                  Decisional Rules. The trial shall
be conducted and the issues determined in compliance with all judicial rules and
all statutory and decisional law of the Sate of California as if the matter were
formally litigated in Superior Court. The Referee shall conduct and decide 

 

 

all pre-trial and post-trial
procedures as if the matter were formally litigated in the Superior Court. All rules
of evidence as set forth in the California Evidence Code; other statutory and decisional
law of California State and all-relevant California County Superior Court Rules
shall be applicable to any proceeding before the Referee.

 

(d)                                 Discovery. The parties to
this Agreement expressly waive their right to engage in any discovery with the exception
of depositions and requests for the inspection, production and copying of documents.
Interrogatories, requests for admissions and depositions upon written interrogatories
shall not be permitted. The Referee shall be authorized to issue subpoenas requiring
attendance at hearings and/or trial. All discovery permitted by this Agreement shall
be completed no later than fifteen (15) days before the first hearing date established
by the Referee. The Referee may extend such period in the event of a party’s refusal
to provide requested discovery for any reason whatsoever, including legal objections
raised to such discovery or unavailability of a witness due to absence or illness.
No party shall be entitled to “priority” in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice. Request for production
or inspection of documents shall be responded to within ten (10) days after service.
All disputes relating to discovery shall be submitted to the Referee whose decision
shall be final and binding upon the parties.

 

(e)                                  Hearings and Trial. Except as set
forth in this Agreement, the Referee shall determine the manner in which the proceeding
is conducted including the time and place of all hearings, the order or presentation
of evidence, and all other questions that arise with respect to the course of the
proceeding. All proceedings and hearings conducted before the Referee, except for
trial, shall be conducted without a court reporter unless one is requested by a
party. The party making the request shall have the obligation to arrange and pay
for the court reporter. The costs of the court reporter at the trial shall be borne
equally by the parties. The trial shall be conducted without a jury on consecutive
dates, as opposed to being conducted piecemeal on various dates separated by postponements
or adjournments. The trial shall be conducted in a courtroom or in surroundings
with formality as close to a courtroom as possible. The Referee shall set the matter
for hearing within sixty (60) days after the Claim Date and try all issues of law
or fact and report a statement of decision upon them, if possible, within ninety
(90) days of the Claim Date.

 

(f)                                    Decision of Referee. The Referee shall
be empowered to enter equitable as well as legal relief, to provide all temporary
and/or provisional remedies and to enter equitable orders that will be binding upon
the parties. The Referee shall issue a single judgment at the close of the proceeding
that shall dispose of all of the claims of the parties that are the subject of the
reference. Any decision rendered by the Referee shall be final, binding and conclusive
and judgment shall be entered pursuant to the appropriate Section of the Code of
Civil Procedure in any court in the State of California having jurisdiction.

 

(g)                                 Attorneys’ Fees. The prevailing
party shall be entitled to costs and reasonable attorney’s fees, including without
limitation costs and fees incurred upon any appeal, as awarded by the court.

 

(h)                                 Appeal. The judgment entered
upon the decision of the Referee shall be 

 

 

subject to all post-trial procedures
and to appeal in the same manner as an appeal from any order or judgment in a civil
action.

 

12.                                 Miscellaneous.

 

(a)                                  Assignment. This Agreement
is for the unique personal services of Employee and may not be assigned by Employee
without the express written consent of Company and its affiliates. Except as so
provided, this Agreement shall be binding upon and inure to the benefit of the respective
heirs, personal representatives, successors and assigns of the parties hereto,

 

(b)                                 License. Employee hereby
agrees to obtain / maintain any professional
license in the State of New York and in any other jurisdiction that may be required
to do business. During any period that Employee does not have such a license in
good standing, he will not be required to perform acts within a given jurisdiction
for which a license is required in such jurisdiction, and Employee hereby agrees
not to take any such actions for which a license is required until he has obtained
the requisite license for such jurisdiction.

 

(c)                                  Severability. Each provision,
sub-provision or term of this Agreement is intended to be severable and shall continue
in full force and effect although other provisions herein may be determined invalid
or void for any reason.

 

(d)                                 Attorneys’ Fees. Subject to Section
8 hereof, in the event suit is brought to enforce the terms of this Agreement, the
prevailing party shall be entitled to costs and reasonable attorneys’ fees, including
without limitation those costs and fees incurred upon any appeal, as awarded by
the court.

 

(e)                                  Entire Agreement;
Amendments. This Agreement contains the entire agreement of the
parties with respect to the subject matter covered hereby and may be amended, waived
or terminated only by an instrument in writing signed by the parties hereto. This
Agreement shall be interpreted according to its fair meaning and not for or against
the party which drafted same.

 

(f)                                    Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one instrument.

 

(g)                                 Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of California.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

 

 

THE COMPANY:

 

	
  KENNEDY-WILSON INTERNATIONAL

  	
   

  	
   

  
	
  a California corporation

  	
   

  	
   

  
	
  By:

  	
  /s/ William McMorrow

  	
   

  	
   

  
	
  Name:

  	
  William J. McMorrow

  	
   

  	
   

  
	
  Title:

  	
  Chairman, CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE: EMPLOYEE:

  	
   

  	
   

  
	
  /s/ Donald J. Herrema
  Executive OfficerExhibit
10.51

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and
entered into as of the 1st day of April, 1996, by and between Kennedy-Wilson, Inc.,
a Delaware corporation with its principal office located in Santa Monica, California
(the “Company”), and Freeman A. Lyle, Jr., an individual (“Employee”).

 

A.                                     KWI is a licensed
California real estate broker in the business of marketing real property by auction
and other means and desires to retain the services of Employee in conducting this
business, subject to the terms and conditions of this Agreement.

 

B.                                       Employee desires
to be employed by KWI pursuant to the terms and conditions of this Agreement.

 

AGREEMENT

 

1.                                         Services Provided
to the Company. During the term of this Agreement, Employee shall devote
his full business time and best efforts in the employment 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 or the Chief Executive Officer of the Company, which duties
may, in the Company’s reasonable discretion, be changed in any~ legal manner from
time to time; provided, however, that any reassignment of Employee’s duties shall
not require him to move from the Greater Los Angeles area arid shall not involve
duties which are not appropriate for his level of expertise, ability Ôr compensation
level. Such duties shall in all events be duties of an officer of the Company. The
initial duties of Employee shall include, without limitation, serving as Executive
Vice President and Chief Financial Officer of the Company with responsibility for
overseeing the financial affairs 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 11:59 PM on
March 31, 1997 (unless earlier terminated pursuant to Section 11 hereof).

 

3.                                         Commitment to the
Company. During the term of Employee’s employment under this Agreement, Employee
shall not be involved, individually or as an employee, principal, officer, general
partner, director or shareholder, in any real estate development activities without
first obtaining the consent and approval of a majority of the Company’s Board of
Directors, the consideration of such consent shall not be unreasonably delayed and
such consent shall be given or withheld on a consistent basis with the grant or
refusal of the Board to grant consent to real estate development activities by other
officers of the Company who are party to employment agreements with the Company.
The limitation contained in this Section shall not apply, however, to the ownership
of no more 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 td
Employee. During the term of this Agreement, the Company shall
pay to Employee compensation (“the Compensation”) consisting of:

 

(i)                  a salary equal to
$125,600 per annum, payable on such basis as is the normal payment pattern of the
Company, not to be less frequently than monthly;

 

(ii)               a discretionary
bonus to be determined by the Company in its sole and absolute discretion which
if awarded may be up to 40% of base salary ($50,000) based on Company’s determination
in its sole and absolute discretion of its achievement of profit goals. In determining
whether any bonus shall be paid and the amount thereof, Company may examine a number
of factors including, without limitation, employee achievement of the following:

 

a)                                         To what extent did
Employee provide Company Management with proactive and timely advise to enhance
and further Company’s business transactions and successes.

 

b.                                         To what extent did
Employee provide accurate, timely and appropriate financial reports to Management,
Board of Directors and Public.

 

c.                                          To what extent did
Employee provide financial statements with analysis and action plan to CEO by the
15th of the following month.

 

d.                                         To what extent did
Employee manage accounting for capital expenditures and K-W owned properties.

 

e.                                          To what extent did
Employee manage bank relationships.

 

f.                                            To what extent did
Employee provide financial analysis, direction and control to guide the Company
in meeting profit goals.

 

Employee
acknowledges that Company has not provided Employee with any projections or estimates
of Net Profit or Net Revenue that might be received by Employee under the terms
of this Agreement as an inducement to Employee to accept employment with Company.

 

5.                                         Expenses. Employee shall
be entitled to reimbursement from the Company for any out-of-pocket expenses, including
travel expenses(which shall not include the expense incurred for Employee’s daily
commute to and from work), incurred by Employee in the ordinary course of providing
his services hereunder and shall not exceed $300.00 per month. Such reimbursement
shall be made by the Company 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. In those instances,
where out of town travel and per diem or where rare and unusual circumstances arise
and may be required, expenses may exceed the $300 limit provided they are pre-approved
by William J. McMorrow.

 

 

6.                                       Deductions. It is understood
that at compensation paid to Employee under this Agreement is subject to the customary
tax, social security and other similar withholding requirements.

 

7.                                       Benefits. For such time
as Employee is employed by KWI, he shall be entitled to the same medical, dental
and insurance, 401k plan, and other benefits as are generally available to other
employees of KWI from time to time during the course of this Agreement.

 

8.                                       Noncompetition Covenant. For so long as
Employee is employed under 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)                 Employee further
acknowledges that all 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 8 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 8 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 reasons 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.

 

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 or other activities which
constitute a primarily line of business of the Company at the time of such termination.

 

9.                                          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 from time to time in the course of the performance of his
duties under this Agreement. Employee agrees that 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. For purposes
of this Agreement, the term “confidential or proprietary information” of the Company
shall include all information 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 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 similar information of a confidential
and proprietary nature.

 

10.                                    Stock Options. Upon execution
of this Agreement the Company shall grant to Employee under the Company’s 1992 Incentive
and Nonstatutory Stock Option Plan a non-transferable non-incentive option to purchase
an aggregate of 5,000 shares of the Common Stock at an exercise price equal to the
price of the Common stock on the effective date of the Agreement. The grant of such
options is to be approved by the Stock Option Committee of the Board of Directors
of the Company on such terms and subject to such conditions as are set forth in
the stock option agreement between the Company and Employee and an additional 5,000
shares of Common Stock on 12/31/96 providing Company and individual goals for 1996
are met.

 

11.                                    Termination.

 

(a)                  This Agreement will
terminate upon the death or physical or mental incapacity of Employee. Incapacity
shall mean the inability to perform the services due hereunder for a consecutive
60 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 shall be limited only to
a material breach by Employee of the terms of Sections 3,8 or 9 hereof or the first
sentence of Section 1 hereof).

(ii)               for cause.

 

(c)                  This Agreement may
be terminated by Employee at any time provided that such termination shall have
the effect set forth in paragraph Cd) below.

 

(d)                 Termination of this
Agreement pursuant to Section 11 (b) shalt not relieve Employee of his obligations
to comply with Sections 8 and 9 hereof. If Employee resigns due to the 

 

 

Company’s
material breach which is not corrected within ten days after the Employee’s written
notice of the breach to the Company, then Employee shall be relieved of his obligations
under Section 8 hereof. If. Employee resigns for any other reason then his obligations
under Sections 8 and 9 hereof will continue to apply. Upon the termination of this
Agreement by the Company pursuant to Section 11(b) or upon the resignation of Employee
during the term of this Agreement other than following a material breach by the
Company hereunder, or prior to termination under Section 8 and 9 if applicable,
any further compensation to Employee shall terminate on the date this Agreement
is so terminated by the Company or Employee resigns. In alt other cases, Employee,
or his estate, will receive all salary, bonuses and fringe benefits (or if such
fringe benefits cannot be provided pursuant to the terms of the applicable plans,
comparable benefits) due hereunder and remaining to be paid during the term hereof
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 being paid by the
Company.

 

12.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.

  
	
   

  	
   

  	
  530 Wilshire Boulevard

  
	
   

  	
   

  	
  Suite 101

  
	
   

  	
   

  	
  Santa Monica, CA 90401

  
	
   

  	
   

  	
  Attention:
  Chief Executive Officer

  
	
  If
  to Employee, to:

  	
   

  	
  Mr.
  Freeman A. Lyle, Jr.

  
	
   

  	
   

  	
  31
  Silver Saddle Lane

  
	
   

  	
   

  	
  Rolling Hills Estates, CA
  90274

  

 

(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)                  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.

 

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

 

(g)                 Choice of Law. This Agreement
shall be governed by the laws of the State of California.

 

(h)                 Alternative Dispute
Resolution. The parties to this Agreement specifically desire an
early resolution of any dispute between them which arises out of this Agreement.
It is therefore, agreed that any controversy arising out of this Agreement, whether
dealing with breach, interpretation or otherwise, shall be heard by a reference
(“Referee”) pursuant to the provisions of Section 638 of the Code of Civil Procedure
and in accordance with the provisions described below. Provided, however, that if
injunctive relief is sought, the complaining party may seek such relief from the
Los Angeles Superior Court without the use of a Referee.

 

1.                                          Enforcement
of Agreement. This reference provision may be enforced by the filing
of a complaint or petition or motion seeking specific enforcement. Service of such
motion on the opposing party shall constitute the “Claim Date” for purposes of this
provision.

 

2.                                          Selection
of Referee. The Referee shall be a retired Judge of the Court selected
by mutual agreement of the parties. If the parties cannot agree then a Referee shall
be appointed by the Los Angeles Superior Court in accordance with Section 640 of
the Code of Civil Procedure. Each party shall be entitled to only one disqualification
pursuant to Section 170.6 of the Code of Civil Procedure. The parties hereby waive
their right to a trial by jury and agree that their dispute shall be tried by the
Referee so selected.

 

3.                                          Decisional
Rules. The trial shall be conducted and the issues determined in compliance with
all judicial rules and all statutory and decisional law of the Sate of California
as if the matter were formally litigated in Superior Court. The Referee shall conduct
and decide all pre-trial and post-trial procedures as if the matter were formally
litigated in the Superior Court. All rules of evidence as set forth in the California
Evidence Code, other statutory and decisional law of California and all relevant
Los Angeles County Superior Court Rules and California Rules of Court shall be applicable
to any proceeding before the Referee.

 

4.                                          Discovery.
The parties to this Agreement expressly waive their right to engage in 

 

 

any discovery with the exception of depositions and requests
for the inspection, production and copying of documents. Interrogatories, requests
for admissions and depositions upon written interrogatories shall not be permitted.
The Referee shall be authorized to issue subpoenas requiring attendance at hearings
and/or trial. All discovery permitted by this Agreement shall be completed no later
than fifteen (15) days before the first hearing date established by the Referee.
The Referee may extend such period in the event of a party’s refusal to provide
requested discovery for any reason whatsoever, including legal objections raised
to such discovery or unavailability of a witness due to absence or illness. No party
shall be entitled to “priority” in conducting discovery. Depositions may be taken
by either party upon seven (7) days written notice. Request for production or inspection
of documents shall be responded to within ten (10) days after service. All disputes
relating to discovery shall be submitted to the Referee whose decision shall be
final and binding upon the parties.

 

5.                                          Hearings
and Trial. Except as set forth in this Agreement, the Referee shall
determine the manner in which the proceeding is conducted including the time and
place of all hearings, the order or presentation of evidence, and all other questions
that arise with respect to the course of the proceeding. All proceedings and hearings
conducted before the Referee, except for trial, shall be conducted without a court
reporter unless one is requested by a party. The party making the request shall
have the obligation to arrange and pay for the court reporter. The costs of the
court reporter at the trial shall be borne equally by the parties. The trial shall
be conducted without a jury on consecutive dates, as opposed to being conducted
piecemeal on various dates separated by postponements or adjournments. The trial
shall be conducted in a courtroom or in surroundings with formality as close to
a courtroom as possible. The Referee shall set the matter for hearing within sixty
(60) days after the Claim Date and try all issues of law or fact and report a statement
of decision upon them, if possible, within ninety (90) days of the Claim Date.

 

6.                                          Decision
of Referee. The Referee shall be empowered to enter equitable as
well as legal relief, to provide all temporary and/or provisional remedies and to
enter equitable orders that will be binding upon the parties. The Referee shall
issue a single judgment at the close of the proceeding which shall dispose of all
of the claims of the parties that are the subject of the reference. Any decision
rendered by the Referee shall be final, binding and conclusive and judgment shall
be entered pursuant to Section 644 of the Code of Civil Procedure in any court in
the State of California having jurisdiction.

 

7.                                         Attorneys’
Fees. The cost of the Referee shall be shared equally between the parties. However,
the prevailing party shall be entitled to receive as part of the judgment in its
favor an award of all actual attorneys’ fees and costs (including the Referee and
court reporter fees) incurred with respect to the reference, and interest at the
highest rate permitted by law as of the date of the breach.

 

8.                                          Appeal.  The judgment entered upon the
decision of the Referee shall be subject to all post-trial procedures and to appeal
in the same manner as an appeal from any order or judgment in a civil action.

 

(i)                                        Assignment. This Agreement
is for the unique personal services of Employee and may not be assigned by Employee
without the express written consent of KWI. Except as so 

 

 

provided, this Agreement shall be binding upon and inure
to the benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.

 

 

	
   

  	
  “COMPANY”

  
	
   

  	
  KENNEDY-WIL
  ON INTERNATIONAL

  
	
   

  	
  A
  California Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William J. McMorrow

  
	
   

  	
   

  	
  Chief
  Executive Officer   4/22/96

  
	
   

  	
   

  	
   

  
	
   

  	
  “EMPLOYEE”

  
	
   

  	
  /s/
  Freeman Lyle   4/17/96

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