Document:

Exhibit 10.46

 

SECOND AMENDMENT TO  EMPLOYMENT AGREEMENT

 

This
Second Amendment to Employment Agreement (the “Second Amendment”) is made and
entered into by and between KENNEDY-WILSON, INC., a Delaware corporation (the “Company”),
and Mary L. Ricks, an individual (“Employee”). 
This amendment will become effective at the times set forth below,
including 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 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, as follows:

 

1.                                       Section 3 (b) is deleted
immediately before the Effective Time.

 

2.                                       Section 11(c) is amended as of
the Effective Time to read as follows:

 

(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 5(a) 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 to
Employee 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 to the Company above what
was previously paid by the Company). Notwithstanding Section 2, 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 her duties as a senior executive level manager and supervisor of
projects, personnel and budgets, then Employee may elect to deem such action(s) a
constructive termination by Company and resign her employment, provided that (i) such

 

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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 the compensation and benefits
described in this Section 11(c) for the remainder of the Term and
Employee’s employment shall be terminated.

 

3.                                       The old Section 12
captioned “Miscellaneous” shall be renumbered as Section 17.

 

4.                                       A new Section 12 is added, effective
as of September 4, 2009:

 

12.                               October 15, 2009 Bonus Payments.

 

The Company shall pay
Employee a cash bonus of $2 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.

 

5.                                       A new Section 13 is added, effective
as of the Effective Time:

 

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

 

(a)           Subject
to the conditions set forth in this Section 13, Company shall pay Employee
a cash bonus of $1 million on April 1, 2010, and a cash bonus of $1
million on January 1, 2011.

 

(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, (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, 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, 

 

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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 her under Section 11(c) to
payment of her salary through the remainder of the Term.

 

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

 

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 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 3-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 

 

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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 her 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
benefits provided pursuant to Section 11(c) 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 

 

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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 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 or Company
disagrees with the determination of the Accountants under this Section 15,
either can have such determination reviewed through the Alternative Dispute
Resolution mechanism set forth in Section 12.  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 409A”).  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 

 

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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 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 the
Employee’s date of termination shall be paid or provided to the 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 the 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 

 

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

 

	
  COMPANY:

  	
   

  	
   

  
	
  KENNEDY WILSON, Inc.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:
  William J. McMorrow

  	
   

  	
  Date

  
	
  Title: Chairman / Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mary L. Ricks

  	
   

  	
  Date

  
				

 

7Exhibit 10.47

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and entered into as
of February 1, 2009 by and between KENNEDY WILSON, INC., a Delaware
corporation (the “Company”), and Mary L. Ricks (“Employee”), with reference to the
following facts and circumstances:

 

RECITALS:

 

A:                                  Company is
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 and the compensation to be paid to her 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 her by Company from time to
time during the term of this Agreement, Employee shall serve as President of
and be responsible for the operation of Kennedy Wilson Investment Sales Group,
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 Company 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’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 her full energies, interests,
abilities, and productive time to the performance of her 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 her full energies
and productive interests to the performance of her 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 February 1, 2009, and continuing through to, and terminating
at the close of business on January 31, 2014 (unless earlier terminated
pursuant to Section 11).

 

(b)                                   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
two (2) times the Employee’s “annual compensation”. The annual
compensation would be the arithmetic average of all compensation paid to
Employee in each of the most recent three (3) year periods and would
include salary and bonus as reported in the Proxy Statement or the Company’s
books, as applicable.

 

“Change in Control” shall mean the first to occur of any of the
following events:

 

(i)                  Any “person”
(as that tem is used Section 13 and 14 (d) (2) of the Securities
Exchange Act of 1934 (“Exchange Act”) becomes the beneficial owner (as that
term is used in Section 13 (d) of the Exchange Act), directly or
indirectly, of 5Q% or more of the Company’s capital stock entitled to vote in
the election of Directors;

 

 

(ii)               If at anytime
after the date of this Agreement, individuals who constitute the incumbent
Board of Directors cease for any reason to constitute at least a majority of
the Board. For this purpose, any person who becomes a member of the Board after
the date of this Agreement and who is approved by the vote of at least a
majority of the persons who constitute the incumbent Board shall be considered a
member of the incumbent Board, but any person whose election as a director
occurs as the result of an actual or threatened election contest, or actual or
threatened solicitation of proxies or consents by or on behalf of any person or
entity shall not be considered a member of the incumbent Board;

 

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

 

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

 

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

 

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 Board of Directors. The limitation
contained in this Section 4 shall not apply, however, to the ownership of
not more than one percent (1%) 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’s 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 her ability and experience she 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.

 

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 her 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.

 

Employee will be eligible to invest in the principal investments at an
investment percentage consistent with others who have a similar level of responsibility
at the Company.

 

7.                                      Business
Expenses. Employee will be required to incur ordinary and
necessary travel and other business expenses in connection with the performance
of her 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 California 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 her 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 she 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 she 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 she
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 she 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 her from time to time in
the course of the performance of her 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)                 She 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 she may use and disclose to other Company
personnel such confidential and proprietary information in the course of the
performance of her duties hereunder or when legally required to do so in
connection with any pending litigation or administrative inquiry; and

 

(b)                She 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 her breach of this Section 10
will cause irreparable harm to the Company. Employee agrees that the remedy at
law for any breach by her 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 sixty (60) 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 her 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 her 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 her 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) and Section 6
to the date of termination, and such compensation will be payable to the Mary
Ricks revocable Trust dated February 7, 2000.

 

(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). If after a Change in Control 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) or eliminates
or materially reduces her duties as a senior executive level manager and
supervisor of projects, personnel and budgets, then Employee may elect to deem
such action(s) a constructive termination at will by Company in which case
Company shall continue to pay the compensation and benefits described in this Section 11(c) and
Employee’s employment shall be deemed terminated.

 

(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 Sections 5(a)-(b) 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 her 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
her 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 California 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, she 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 she 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.

 

 

	
  COMPANY:

  	
   

  
	
  KENNEDY
  WIL ON, Inc.

  	
   

  
	
  A
  Delaware corporation

  	
   

  
	
   

  	
   

  
	
  /s/
  William J. McMorrow

  	
   

  
	
  Title:

  	
  Chairman/Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE

  	
   

  
	
  /s/ Mary L. Ricks

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