Exhibit 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
fro
