Document:

Exhibit 10.48

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

This Amendment to
Employment Agreement (the “Amendment”) is made and entered into as of June 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

 

WHEREAS, Company and Employee have entered into that certain
Employment Agreement dated as of February 1,
2009 (the “Agreement”), providing for the employment of Employee by Company
pursuant to the terms of such Agreement; and

 

WHEREAS, Company and
Employee have agreed that the terms of the Employment Agreement should be
modified to change the Job Title.

 

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 2 of the
Agreement is modified such that the title of “President of Kennedy Wilson
Investment Sales Group” is deleted in its entirety and the following is added
in lieu thereof “Executive Vice Chairman, Kennedy Wilson International and
Co-CEO, KW Commercial Investment Group”.

 

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 Amendment as of
the date first above written.

 

	
  COMPANY:

  	
   

  
	
  KENNEDY
  W SON, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/William McMorrow

  	
   

  
	
  Title:
  Chairman Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE

  	
   

  
	
  /s/
  Mary L. RicksExhibit 10.49

 

FIRST AMENDMENT TO  EMPLOYMENT AGREEMENT

 

This
First Amendment to Employment Agreement (the “First Amendment”) is made and
entered into by and between KENNEDY-WILSON, INC., a Delaware corporation (the “Company”),
and Donald J. Herrema, an individual (“Employee”).  This amendment will become effective at the
times set forth below, including the time at which KW Merger Sub Corp., 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 is amended as of the
Effective Time to read as follows:

 

(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 January 31,
2014 (unless earlier terminated pursuant to Section 11).

 

2.                                     Section 5(c) is deleted
effective as of the Effective Time.

 

3.                                     Section 11(a) is deleted
effective as of the Effective Time by deleting the words “eighteen (18) month.”

 

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

 

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 

 

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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 his 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 his employment, provided that (i) such
resignation occurs within one year of such action(s); (ii) Employee
provides written notice to the Company of such action(s) within 90 days
thereof; and (iii) the Company fails to cure the action(s) constituting
such constructive termination within 30 days of receipt of the notice.  In the event of such
a resignation, Company shall continue to pay or provide the compensation and
benefits described in this Section 11(c) for the remainder of the
Term and Employee’s employment shall be terminated.

 

5.                                       The old Section 12
captioned “Miscellaneous” shall be renumbered as Section 15.

 

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

 

15.                               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.  The “Performance Target” is that the Company’s
assets under management by the Company be at least $3 billion.  For this purpose, “assets under management”
shall equal the value of assets under management, 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).  The restricted shares shall be subject to all
terms and conditions of the Plan.

 

(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 

 

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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 Employee for Good Reason, in any
such event, the requirement of continued employment shall no longer apply, so
that, assuming the Performance Target is met as of the relevant date(s), the
restricted shares that have not been forfeited as of such termination date
shall thereupon become fully vested, no longer subject to restrictions, and
transferable.  As used in this
subsection, “Good Reason” shall mean the voluntary termination by Employee of
his employment with the Company within six months of the Company’s (A) instructing
the Employee to work (or provide services) full-time or substantially full-time
at any location not acceptable to the Employee (other than the employer’s main
headquarters) that is more than 50 miles from Employee’s principal place of
work and more than 50 miles from Employee’s principal residence, (B) eliminating
or materially reducing the Employee’s duties for the Company, or (C) materially
reducing the Employee’s base pay (or compensation).  In addition, all unvested restricted shares
that have not been forfeited in connection with a termination of employment
shall become immediately vested in the event of a Change in Control, as defined
in the Plan.

 

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

 

13.                               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 12, 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 

 

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

 

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

 

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

 

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

 

(e)                                Subject to the
last sentence of this subsection (e), all determinations made by the
Accountants under this Section 13 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 13, 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 13.  
In the event that Employee or Company disagrees with the determination
of the Accountants under this Section 13, 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 14 is added, effective
as of January 1, 2009:

 

14.           Section 409A.

 

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

 

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

 

(c)           If
Employee is a “specified employee” (determined by Company in accordance with Section 409A
and Treasury Regulation Section 1.409A-3(i)(2)) as of the date that the
Employee experiences a separation from service, as defined in Treasury
Regulations Section 1.409A-1(h)(1), from the Company (a “Separation from
Service”) and if any reimbursement, payment or benefit to be paid or provided
under this Employment Agreement or otherwise both (i) constitutes a “deferral
of compensation” within the meaning of and 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) the Employee’s death and (y) the first business
day of the seventh (7th) month immediately following the 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 

 

5

 

Company’s
health plans), (ii) the reimbursements for expenses for which Employee is
entitled shall be made on or before the last day of the calendar year following
the calendar year in which the applicable expense is incurred and (iii) the
right to payment or reimbursement or in-kind benefits may not be liquidated or
exchanged for any other benefit.

 

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

 

(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 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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Donald J. Herrema

  	
   

  	
  Date

  
				

 

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